If you’re new to the world of economics, particularly Austrian economics, then there is one book that you must start off with (I wish I had): Human Action, written by Ludwig von Mises. This book promotes laissez-faire economics, capitalism and praxeology, while combating the state, socialism and intervention. Anything you read in Austrian economics books today come from this groundbreaking achievement.
Here are 25 quotes from Human Action:
1. Envy
“Envy is a widespread frailty. It is certain that many intellectuals envy the higher income of prosperous businessmen and that these feelings drive them toward socialism. They believe that the authorities of a socialist commonwealth would pay them higher salaries than those that they earn under capitalism.”
2. Monetary Calculation
“There are people to whom monetary calculation is repulsive. They do not want to be roused from their daydreams by the voice of critical reason. Reality sickens them, they long for a realm of unlimited opportunity. They are disgusted by the meanness of a social order in which everything is nicely reckoned in dollars and pennies. They call their grumbling the noble deportment worthy of the friends and the spirit, of beauty, and virtue as opposed to the ignoble baseness and villainy of Babbittry. However, the cult of beauty and virtue, wisdom and the search for truth are not hindered by the rationality of the calculating and computing mind. It is only romantic reverie that cannot thrive in a milieu of sober criticism. The cool-headed reckoner is the stern chastiser of the ecstatic visionary.”
3. Capitalism vs. Socialism
“All civilizations have up to now been based on private ownership of the means of production. In the past civilization and private property have been linked together … There is no experience to the effect that socialism could provide a standard of living as high as that provided by capitalism.”
4. Threat of Socialism
“A world-embracing socialist state would exercise such an absolute and total monopoly; it would have the power to crush its opponents by starving them to death.”
5. Inequalities and Government Education
“There prevails today the tendency to reduce all differences among various peoples to their education and to deny the existence of inborn inequalities in intellect, will power, and character. It is not generally realized that education can never be more than indoctrination with theories and ideas already developed … It produces imitation and routine, not improvement and progress.”
6. Union’s Hatred of Competition
“…as a rule labor unions do not aim at monopoly wage rates. A union is intent upon restricting competition on its own sector of the labor market in order to raise its wage rates.”
7. Rate of Interest
“Therefore there cannot be any question of abolishing interest by any institutions, laws and devices of bank manipulation. He who wants to ‘abolish’ interest will have to induce people to value an apple available in a hundred years no less than a present apple. What can be abolished by laws and decrees is merely the right of the capitalists to receive interest. But such laws would bring about capital consumption and would very soon throw mankind back into the original state of natural poverty.”
8. Inflation
“A general rise in prices can only occur if there is either a drop in the supply of all commodities or an increase in the supply of money.”
9. The Boom
“The boom can last only as long as the credit expansion progress at an ever-accelerated pace. The boom comes to an end as soon as additional quantities of fiduciary media are no longer thrown upon the loan market. But it could not last forever even if inflation and credit expansion were to go on endlessly. It would then encounter barriers which prevent the boundless expansion of circulation credit. It would lead to the crack-up boom and the breakdown of the whole monetary system.”
10. The Collapse of the Boom
“However conditions may be, it is certain that no manipulation of the banks can provide the economic system with capital goods. What is needed for a sound expansion of production is additional capital, not money or fiduciary media. The boom is built on the sands of banknotes and deposits. It must collapse.”
11. The Outcome of the Boom
“The final outcome of the credit expansion is general impoverishment. Some people may have increased their wealth; they did not let their reasoning be obfuscated by the mass hysteria, and took advantage in time of the opportunities offered by the mobility of the individual investor. Other individuals and groups of individuals may have been favored, without any initiative of their own, by the mere time lag between the rise in prices of the goods they sell and those they buy. But the immense majority must foot the bill for the malinvestments and the overconsumption of the boom episode.”
12. Modern Capitalism
“Modern capitalism is essentially mass production for the needs of the masses.”
13. The Socialist System
“The socialist system is a system without a market and market prices unrestricted centralization and unification of the conduct of all affairs in the hands of one authority.”
14. What Socialists Want
“They want to abolish private control of the means of production, market exchange, market prices and competition. But at the same time they want to organize the socialist utopia in such a way that people act as if these things were still present. They want people to play market as children play war, railroad or school. They do not comprehend how such childish play differs from the real thing it tries to imitate.”
15. Entrepreneurship
“Those who confusion entrepreneurship and management close their eyes to the economic problem. … The capitalist system is not a managerial system; it is an entrepreneurial system.”
16. Government Force
“It is important to remember that government interference always means either violent action or the threat of such action. … Those who are asking for more government interference are asking ultimately for more compulsion and less freedom.”
17. Laissez Faire
“Laissez faire means: Let the common man choose and act; do not force him to yield to a dictator.”
18. Tax
“The power to tax is the power to destroy.”
19. Inequality in the Economy
“The inequality of incomes and wealth is an inherent feature of the market economy. Its elimination would entirely destroy the market economy.”
20. The Fallacy of Inequality
“What those people who ask for equality have in mind is always an increase in their own power to consume. In endorsing the principle of equality as a political postulate nobody wants to share his own income with those who have less. When the American wage earner refers to equality, he means that the dividends of the stockholders should be given to him. He does not suggest a curtailment of his own income for the benefit of those 95 percent of the Earth’s population whose income is lower than his.”
21. What Did Kant Say?
“But what counts in life and reality is – whatever Kant may have said – not good intentions, but accomplishments.”
22. Economics in Universities
“Tax-supported universities are under the sway of the party in power. The authorities try to appoint only professors who are ready to advance ideas of which they themselves approve. As all non-socialist governments are today firmly committed to interventionism, they appoint only interventionists.”
23. Shaping Your Own Destiny
“He who only wishes and hopes does not interfere actively with the course of events and with the shaping of his own destiny.”
24. It’s Not Entrepreneurs’ Fault
“It is not the fault of the entrepreneurs that the consumers, the people, the common man, prefer liquor to Bibles and detective stories to serious books, and that governments prefer guns to butter. The entrepreneur does not make greater profits in selling bad things than in selling good things. His profits are the greater the better he succeeds in providing the consumers with those things they ask for most intensely.”
25. Sacrificing for the Party
“Without exception all political parties promise their supporters a higher real income. There is no difference in this respect between nationalists and internationalists and between the supporters of a market economy and the advocates of either socialism or interventionism. If a party asks its supporters to make sacrifices for its cause, it always explains these sacrifices as the necessary temporary means for the attainment of the ultimate goal, the improvement of the material well-being of its members. Each party considers it as an insidious plot against its prestige and its survival if somebody ventures to question the capacity of its projects to make the group members more prosperous. Each party regards with a deadly hatred the economists embarking upon such a critique.”
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