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the managers of socialist plants accountable for the resources entrusted to them and wholly unconnected with the problem of what they should produce and how. Any set of magic figures appeared to them sufficient to control the honesty of those still indispensable survivors of a capitalist age. They never seemed to comprehend that it was not a question of playing with some set of figures, but one of establishing the only indicators those managers could have for deciding the role of their activities in the whole structure of mutually adjusted activities. As a result, Mises became increasingly aware that what separated him from his critics was his wholly different intellectual approach to social and economic problems, rather than mere differences of interpretation of particular facts.

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      To convince them, he would have to impress on them the necessity of an altogether different methodology. This of course became his central concern.

      Publication in 1936 of the English translation was largely the result of the efforts of Professor Lionel C. Robbins (now Lord Robbins). He found a highly qualified translator in a former fellow student at the London School of Economics, Jacques Kahane (1900–1969), who had remained an active member of a circle of academic economists of that generation, although he himself had not remained in the profession. After many years of service with one of the great firms of grain dealers in London, Kahane concluded his career with the United Nations Food and Agricultural Office at Rome and the World Bank at Washington. The typescript of Kahane’s translation was the last form in which I had read the entire text of Socialism, before doing so again in preparation for writing this introduction.

      This experience necessarily makes one reflect on the significance of some of Mises’ arguments after so long a period. Much of the work now inevitably sounds much less original or revolutionary than it did in its early years. It has in many ways become one of those “classics” which one too often takes for granted and from which one expects to learn but little that is new. I must admit, however, that I was surprised at not only how much of it is still highly relevant to current disputes, but how many of its arguments, which I initially had only half accepted or regarded as exaggerated and one-sided, have since proved remarkably true. I still do not agree with all of it, nor do I believe that Mises would. He certainly was not one to expect that his followers receive his conclusions uncritically and not progress beyond them. In all, though, I find that I differ rather less than I expected.

      One of my differences is over a statement of Mises on page 463 of the 1951 edition (page 418 of this edition). I had always felt a little uneasy about that statement of basic philosophy, but only now can I articulate why I was uncomfortable with it. Mises asserts in this passage that liberalism “regards all social cooperation as an emanation of rationally recognized utility, in which all power is based on public opinion, and can undertake no course of action that would hinder the free decision of thinking men.” It is the first part of this statement only which I now think is wrong. The extreme rationalism of this passage, which as a child of his time he could not escape from, and which he perhaps never fully abandoned, now seems to me factually mistaken. It certainly was not rational insight into its general benefits that led to the spreading of the market economy. It seems to me that the thrust of Mises’ teaching is to show that we have not adopted freedom because we understood what benefits it would bring: that we have not designed, and certainly were not intelligent enough to design, the order which we now

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      have learned partly to understand long after we had plenty of opportunity to see how it worked. Man has chosen it only in the sense that he has learned to prefer something that already operated, and through greater understanding has been able to improve the conditions for its operation.

      It is greatly to Mises’ credit that he largely emancipated himself from that rationalist-constructivist starting point, but that task is still to be completed. Mises as much as anybody has helped us to understand something which we have not designed.

      There is another point about which the present-day reader should be cautioned. It is that half a century ago Mises could still speak of liberalism in a sense which is more or less the opposite of what the term means today in the United States, and increasingly elsewhere. He regarded himself as a liberal in the classical, nineteenth-century meaning of the term. But almost forty years have now elapsed since Joseph Schumpeter was constrained to say that in the United States the enemies of liberty, “as a supreme but unintended compliment, have thought it wise to appropriate this label.”

      In the epilogue, which was written in the United States twenty-five years after the original work, Mises reveals his awareness of this and comments on the misleading use of the term “liberalism.” An additional thirty years have only confirmed these comments, as they have confirmed the last part of the original text, “Destructionism.” That shocked me for its inordinate pessimism when first I read it. Yet, on rereading it, I am awed rather by its foresight than by its pessimism. In fact, most readers today will find that Socialism has more immediate application to contemporary events than it had when it first appeared in its English version just over forty years ago.

      August 1978

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PREFACE TO THE SECOND ENGLISH EDITION

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      The world is split today into two hostile camps, fighting each other with the utmost vehemence, Communists and anti-Communists. The magniloquent rhetoric to which these factions resort in their feud obscures the fact that they both perfectly agree in the ultimate end of their programme for mankind’s social and economic organization. They both aim at the abolition of private enterprise and private ownership of the means of production and at the establishment of socialism. They want to substitute totalitarian government control for the market economy. No longer should individuals by their buying or abstention from buying determine what is to be produced and in what quantity and quality. Henceforth the government’s unique plan alone should settle all these matters. ‘Paternal’ care of the ‘Welfare State’ will reduce all people to the status of bonded workers bound to comply, without asking questions, with the orders issued by the planning authority.

      Neither is there any substantial difference between the intentions of the self-styled ‘progressives’ and those of the Italian Fascists and the German Nazis. The Fascists and the Nazis were no less eager to establish all-round regimentation of all economic activities than those governments and parties which flamboyantly advertise their anti-Fascist tenets. And Mr. Peron in Argentina tries to enforce a scheme which is a replica of the New Deal and the Fair Deal and like these will, if not stopped in time, result in full socialism.

      The great ideological conflict of our age must not be confused with the mutual rivalries among the various totalitarian movements. The real issue is not who should run the totalitarian apparatus. The real problem is whether or not socialism should supplant the market economy.

      It is this subject with which my book deals.

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      World conditions have changed considerably since the first edition of my

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      essay was published. But all these disastrous wars and revolutions, heinous mass murders and frightful catastrophes have not affected the main issue: the desperate struggle of lovers of freedom, prosperity and civilization against the rising tide of totalitarian barbarism.

      In the Epilogue I deal with the most important aspects of the events of the last decades. A more detailed study of all the problems involved is to be found in three books of mine published by the Yale University Press:

      Omnipotent Government, the Rise of the Total State and Total War;¹ Bureaucracy;² Human Action, a Treatise on Economics.³

      LUDWIG VON MISES

      New York, July 1950

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