Anti-Capitalistic Mentality

The majority of people are unaware of the economic condition before the appearance of the free market. To believe intellectuals that life before the Industrial Revolution was happy and prosperous, and that capitalism brought nothing but misery is proof that most people these days do not know the past.

"The Anti-Capitalistic Mentality" is to analyze the roots and results of ideas that hate the free enterprise.

The way to achieve prosperity is open in a capitalist society. It is acquired by those who satisfy the masses by providing products that are either cheaper or better. It is in this context that we must understand the concept of "consumer sovereignty."

In other words, those who serve the majority will receive greater income or greater profit than those who satisfy the wants of the minority.

 

Mises himself gave us a hint about what's wrong in our time. He said that the desire for the advancement of economic well-being is normal and appropriate.

The closeness of similarity between most nations' societies to aristocrat society is an outcome of anti-capitalistic mentality. Most states and political parties, which include both conservative and "progressive" foes of capitalism are determined to destroy this economic system.

 

Psychological Roots for the Denigration of Capitalism

1. Search for Scapegoat

Reading this economic insight shows that if anyone wants bigger income or profit, he must place himself in the industry that has big demand and he must equip himself with the necessary skills required by the market. If he is not willing to do this, he cannot blame anyone for his meager income.

The free market is such a society. Those who fail resent the achievements of those who succeed. A fool releases his indignation by verbally maligning the achievers. . In such a system, it is not enough to be brilliant, efficient, and industrious to be successful. Honesty and decency are punished.

2. Cover-up for Hatred

The vilification of capitalism is coming from intellectuals' hatred and envy of the success of their colleagues. Mises explained the nature of this hatred. Unlike ordinary men who do not have the opportunity to associate with those who succeed in life, the intellectuals know personally and encounter daily their colleagues who went ahead of them. "To understand the intellectual's abhorrence of capitalism one must realize that in his mind this system is incarnated in a definite number of compeers whose success he resents and whom he makes responsible for the frustration of his own far-flung ambitions.

 

3.      Socialites' Isolation

). Mises identified the members of this gathering as the "statesmen and parliamentary leaders, the heads of the various departments of the civil service, publishers and editors of the main newspapers and magazines, prominent writers, scientists, artists, actors, musicians, engineers, lawyers and physicians" and "together with outstanding businessmen," "scions of aristocratic and patrician families".

4.      Conceit and Resentment of White-Collar Workers

it refers to the experience of white-collar workers. Mises described it as resentment, but I see it as more of conceit. Mises explained that a white-collar worker has "two special afflictions peculiar to his own category" (p. 21). The white-collar worker due to apparent similarity, tends to equate his task with his boss', and considers his "intellectual" assignment is higher than the manual workers of the firm. He cannot understand and it makes him angry to see that the manual workers receive more respect and a higher salary.

 

5.      Disgruntled Relatives of Capitalist Families

Another interesting psychological root for the vilification of capitalism can be traced from disgruntled relatives of capitalist families. Mises described them as "cousins" referring to the "brothers, cousins, nephews of the bosses, more often their sisters, widowed sisters-in-law, female cousins, nieces and so on" (p. 27). These relatives financially support various types of projects that promote anti-capitalistic mentality.

 

6.      Entertainers' Expectation of Deliverance from Public Capriciousness

The final psychological root comes from the entertainment industry. As we all know, many entertainers live an affluent lifestyle, and so it is difficult to accept that "Hollywood and Broadway, the world-famous centers of the entertainment industry, are hotbeds of communism".

To understand this phenomenon, one must first start with a comparison between the products offered by manufacturers and the entertainers. In the case of manufacturers, they sell tangible goods, which provide a measure of stability that the entertainment industry does not have. In the case of entertainers, they are primarily dependent on the wishes and capriciousness of the public. People are bored, and that is why they "buy" the entertainers' "products." But people are very difficult to please for they crave for something "new," "unexpected," and "surprising".

 

Mises accepts the very nature of the public and no relief can be found to cure the uneasiness of stage performers. However, in their search for a remedy, some of them think that communism will give them deliverance.

 

A Social Philosophy - Two Kinds of Progressives

1.      The Unfortunate State of Economic Ignorance

The reason for this unfortunate state is not only due to the inherent difficulty of the subject that requires unusual and demanding intellectual exertion, but also due to general impressions that the study of the subject is considered "strange," "repulsive," "nonsensical," and often "viewed with suspicion".

2.      Material Productive Forces' Continuous Evolution

Corollary to the failure to account for the real cause of economic progress, our common man improperly ascribed all economic development to "natural sciences and technology" (p. 36) and he saw them as "self-acting" toward continuous development regardless of "political and economic organization of society".

3.      Three Progressive Classes

Let us see the role of these progressives in economic well-being. For Mises', the increase in productivity is not due to labor per se but the use of better tools and machines, which is made possible through "the accumulation and investment of more capital" through saving. In fact, "Every step forward on the way toward prosperity is the effect of saving". Entrepreneurs "employ the capital goods made available by the savers for the most economical satisfaction of the most urgent among the not yet satisfied wants of the consumers". Saving and the accumulation of capital when they surpass population growth have two advantageous results, an increase of marginal productivity of labor and a reduction in the price of goods. It is exactly the availability of the supply of capital that distinguishes "progressive" (which the mainstream describes as developed countries) from backward countries.

4.      Misrepresentation of Capitalism

Our common man thinks that the wealth of the wealthy is the primary cause of poverty. He failed to see that the mark of big business is mass production aimed towards mass consumption, in which the workers are the main consumers. He could not understand that "the entrepreneurs, the capitalists, and the technologists prosper as far as they succeed in best supplying the consumers".

 

The Progressives. "Unorthodox dogmatism" is Mises' summary description of the taboos of progressivism. He described it as "self-contradictory and confused mixture of various doctrines incompatible with one another". Concerning sources of dogmas, it is eclectic "at its worst, a garbled collection of surmises borrowed from fallacies and misconceptions long since exploded. It includes scraps from many socialist authors, both 'utopian' and 'scientific Marxian,' from the German Historical School, the Fabians, the American Institutionalists, the French Syndicalists, the Technocrats. It repeats errors of Godwin, Carlyle, Ruskin, Bismarck, Sorel, Veblen and a host of less well-known men"

The progressives' basic accusation "against capitalism is that the recurrence of crisis and depressions and mass unemployment is its inherent features". Exposing these economic problems as products of government intervention silence the progressives, and since they cannot give a credible response to "economists, they try to conceal them from the people and especially also from the intellectuals and the university students. Any mentioning of these heresies is strictly forbidden. Their authors are called names, and the students are dissuaded from reading their 'crazy stuff' ".

 

Three Fundamental Errors

Instead of giving a detailed analysis of the mentioned "moderate" stance, Mises just focused on giving an overview of the three fundamental errors inherent in it.

 

1. The first mistake is related to the erroneous diagnosis of the nature of the ideological problem. "The great ideological conflict of our age," says Mises is neither about the distribution of business profit nor class warfare. Instead, it is about the struggle "concerning the choice of the most adequate system of society's economic organization". Mises explains the nature of this struggle:

2. The second error is the failure to see the similarity of the economic system of both socialism and communism. Yes, it is true that under socialism, the "anti-communist bourgeois" are not assassinated and that the secret documents of a nation are not submitted to a "superior" socialist nation. In this instance, socialism is more moderate than communism. But besides this, there is no difference between the two especially when it comes "to the ultimate goal of political action;" both socialism and communism are aiming for "public control of all the means of production".

 

3. The third error is the naive belief about the possibility of a third economic system resulting from a combination of both socialism and capitalism. Affirming this possibility springs from ignorance to understand the real nature of both socialism and capitalism. They "are two distinct patterns of social organization” for socialism is based on public control of the means of production, whereas capitalism can only exist if "private control of the means of production" is protected. There cannot be a reconciliation between these two. Economists call this form of the economic system "interventionism" and for Marx and Engels, when they "advocated definite interventionist measures, they did not mean to recommend a compromise between socialism and capitalism". Mises perceives them as stepping stones on the way to "the establishment of full communism". Therefore, "the social and economic philosophy of the progressives is a plea for socialism and communism". "Mixed economy" or "a middle-of-the-road solution" does not exist. Expecting it to be so is to believe in the illusion.

 

Capitalism, with its promise of material well-being, cannot make people happy. Mises' first objection deals with this subject of happiness, and he puts it in a way similar to this: Possession of the latest gadgets does not make people happy, and besides, there are lots of people who do not have those gadgets.

Capitalism promotes social injustice, and therefore must be discarded and replaced.

The primary trouble with the above idea of justice is that it ignores scarcity, which is a fundamental economic reality. And not only that, apart from man's use of reason, there is no way for him to protect himself from the threat to human life displays by the operation inherent in nature. The truth is, the expansion of wealth is not natural. It is an outcome of the division of labor, which is a product of human reason.

Concerning the Nature of Capital. In dealing with this topic, Mises explained the basic ideas surrounding the subject of capital and the relationship between capital and population growth.

"Capital is not a free gift of God or of nature. It is the outcome of a provident restriction of consumption on the part of man. It is created and increased by saving and maintained by the abstention from dissaving".

          "What is required to raise, in the absence of an increase in the number of workers employed, the total amount of. . . industrial output is the investment of additional capital that can only be accumulated by new savings. It is those saving and investing to whom credit is to be given for the multiplication of the productivity of the total labor force".