A Review of Ludwig von Mises' "Socialism"

[DanielMuffinburg]

A 3-star review (not by me) posted on Amazon.com for Ludwig von Mises’ Socialism:

What about Capitalism?,

By	Stergios D. Marangos “Tanthallas”

Von Mises’s whole premise of “why socialism can never work” has been successfully and easily rebuked throughout the years. Explaining markets and exchange is wonderful, but properly explaining them within the confines of Capitalism is the task. Liberty, what Mises and the like hold dear, is much harder to hold as an ideal when this foundation is shattered. As far as his premise, that Communism would fail because of the lack of a price system - this is completely absurd and elementary. An oversimplified idea of what I am referring to is that fully planned economics would function as a refined form of redistribution, which would be built off of the form of redistribution that lasted far longer than any form of Capitalism has - Feudal societies allowed for social reproduction, else we would not be here. What is in question here is relative performance and desirability, and unfortunately it is far too complex of an issue that goes much beyond the scope of this book. Social values and political realities must be included in any initial assumptions. This, however, is still a far shot from what Socialism was initially about…essentially Mises is trying to fight Socialism on his own ground, pulling in all the bad and ignoring the good.

What I find ironic from this forum, however, is that Mises has built a following of zealots that rivals the radical Marxists. If you are a follower and this offends you, I assume you recognize that your dashing and simplistic categorizations of socialists offends them just the same. Perhaps you should actually read Capital or many of its offspring’s before you come to dangerous conclusions. I recommend John Weeks’s "Capital and Exploitation for inquirers. Note however, relative to this book both the level of writing and the command of economic theory in these two books is on a completely different level.

Ultimately, I recommend this book for people who already have a set belief in accordance with Mises’s belief’s and wish to reinforce it. Otherwise, if you can pass the blockade of believing only what you want to believe, I would recommend Schumpeters Capitalism, Socialism, and Democracy for those not quite willing to read Marx or simply under the constraints of time. Schumpeter was a professed Capitalist. His work is gets to the heart of the virtues of Capitalism and Socialism, both their strengths and weaknesses, and why he as a Capitalist believes that Socialism is fully functional in many different forms and with a continuity of institutions. He also believes that Socialist economies need not conform to the conventional wisdom of “what Socialism is”, for example a Socialist economy need not be based on equality. If you are serious about learning both sides, I recommend it over this.

So, in conclusion I do recommend that everyone who plans to read this also challenge their mind and conventional wisdom with reading its counterparts, some of which I recommended above, to get a clear idea of what the real issues with both are. As for many of the other reviewers on this book, I do not believe that they have an idea of anything other than what they want to have. Having read Marx, Mises, Hayek, Friedman, Keynes, Stiglitz, ect. thoroughly, I find all these five star reviews very one sided. Marx’s arguments go well beyond what Mises ever attempted to touch. The Socialist critique has no quarrels with markets or freedom, but these elements confined to the Capitalist mode of production.

Goodluck.

[liberty_student]

It’s your normal internet rubbish.

Some guy makes a critique, without actually criticizing the book, leading me to believe that he never in fact read the book, but is instead trying to defend his ideology. 581 words, and this is the most substantive thing he had to say,

As far as his premise, that Communism would fail because of the lack of a price system - this is completely absurd and elementary.

Are you planning to refute him Daniel?

[DanielMuffinburg]

I sure his review could have been very convincing if he had actually attacked the book instead of some mystical creature. He says, “[a]s far as his premise, that Communism would fail because of the lack of a price system - this is completely absurd and elementary”, but he doesn’t say why it is absurd and elementary. Go figure. Anyway, I’m not planning to refute him. His review is full of logical fallacies and one must be an idiot to think that he actually reviewed the book. Also, I don’t understand the premise behind the argument that “if you don’t include X and Y in your book, even though it has nothing to with the premise of the book, then your book deserves a 1-star rating.” Using that logic, anything most mainstram economist write nowadays deserves 1-star rating for not including anything Austrian.

[Jon_Irenicus]

I don’t believe he’s read anyone he avers to have read. There is not a single argument in that review.

[MatthewWilliam]

I can’t wait for Mr. Stergios D. Marangos’ next critical review. Hopefully he’ll tackle Bohm-Bawerk’s Karl Marx and the Close of His System.

[hayekianxyz]

@Daniel

As far as his premise, that Communism would fail because of the lack of a price system - this is completely absurd and elementary.

This alone is telling, the fact that he believes it’s “elementary” betrays a misunderstanding of the entire argument. My guess is either he’s only heard the Hayekian critique of central planning and has conflated them, or has heard some exposition of the argument by a layman Austrian who doesn’t understand the argument themself. The fact of the matter is that the argument is not elementary, without understanding the nature of Austrian capital theory (heterogenous goods aimed at some production at some point in the future), Austrian subjectivism and even Austrian monetary theory it may appear to be so, but it simply isn’t.

@Daniel

An oversimplified idea of what I am referring to is that fully planned economics would function as a refined form of redistribution, which would be built off of the form of redistribution that lasted far longer than any form of Capitalism has -

Once again, this casts some doubt as to whether or not he’s read Mises. If he had, he would know (or at least be aware of the argument) is that it is only through capitalism that socialism has been able to last for so long. Since it has been allowed to use the capital that has been produced through free enteprise, use the capitalist price system in other countries and in countries such as Russia there were black markets (free markets) that enable socialism to continue for longer than it otherwise would have.

@Daniel

Social values and political realities must be included in any initial assumptions.

I can’t really understand what he means. Mises took political realities into account, in fact, the who problem with socialism arises when one tries to circumvent the price system through politics. As for “social values” I don’t understand what he means, is he trying to say that if people wish socialism to work it will do? That simply isn’t so (and to say it is misconceives Mises’ argument), moreover, if he’d done his homework he’d understand that in fact, in a free market “social values” will be maximized. The only other intepretation I can offer is that he is talking about moral arguments, which isn’t an issue to Mises who was a utilitarian, and isn’t the subject of a book primarily concerning economic arguments, moreover, other Austrians have attempted to deal with this issue, as well as other libertarian philosophers.

@Daniel

Perhaps you should actually read Capital or many of its offspring’s before you come to dangerous conclusions.

Or perhaps he should educate himself of the Austrian school, and give a charitable reading (or simply, a reading) to Mises’ Socialism, as well as the numerous other books concerning the subject (Hoff’s book, the number of articles elaborating upon Mises), before reveiwing it.

As for Capital, what makes him thing that Austrians are not aware of the book?

@Daniel

Otherwise, if you can pass the blockade of believing only what you want to believe, I would recommend Schumpeters Capitalism, Socialism, and Democracy for those not quite willing to read Marx or simply under the constraints of time. Schumpeter was a professed Capitalist. His work is gets to the heart of the virtues of Capitalism and Socialism, both their strengths and weaknesses, and why he as a Capitalist believes that Socialism is fully functional in many different forms and with a continuity of institutions. He also believes that Socialist economies need not conform to the conventional wisdom of “what Socialism is”, for example a Socialist economy need not be based on equality. If you are serious about learning both sides, I recommend it over this.

Could it be that, perhaps, the two books have a different perspective on the issue? Mises took is not meant to be a discussion of the relative virtues of the two systems, it is meant to be an economic and sociological assessment of socialism, which is ultimately found wanting. Also, Schumpeter’s views on the calculation debate have been addressed by numerous Austrians. If the writer of the review was as well read in economic literature as he says he is, I daresay he would know this.

@Daniel

Having read Marx, Mises, Hayek, Friedman, Keynes, Stiglitz, ect. thoroughly, I find all these five star reviews very one sided.

Now, there’s three nobel prize winners in there, two other very famous “economists” besides and the author of the book he is reviewing. I’m guessing he’s not read any of those, or at least, not studied them in any depth. He’s picking economists that he knows or else googling Nobel prize winners. At least drop some relevant names such as Bohm Bawerk, Menger, Rothbard, Kirzner, Hoff (Austrians who have contibuted to the debate).

Besides that the rest of the review is full of meaningless, unelaborated and irrelevant remarks such as:

@Daniel

Marx’s arguments go well beyond what Mises ever attempted to touch. The Socialist critique has no quarrels with markets or freedom, but these elements confined to the Capitalist mode of production.

@Daniel

What I find ironic from this forum, however, is that Mises has built a following of zealots that rivals the radical Marxists

@Daniel

Feudal societies allowed for social reproduction, else we would not be here. What is in question here is relative performance and desirability, and unfortunately it is far too complex of an issue that goes much beyond the scope of this book

@Daniel

This, however, is still a far shot from what Socialism was initially about…essentially Mises is trying to fight Socialism on his own ground, pulling in all the bad and ignoring the good.

(What the fuck does this even mean? That he tried writing an economic critique of socialism, it says as much on the front cover).

[1billion]

I just want to see one well thought out artculiate critique of Mises, is that too much to ask?

[Matt_R]

This guy is so utterly arrogant and obnoxious. He needs a good challenge on Amazon.com.

[jerry33]

Matt R

Funny you should say that…

https://forum.freecapitalists.org/t/free-market-vs-keynes-debate/9029/16

[The_Late_Andrew_Ryan]

What a stupid “critique” there wasn’t actually a single counter argument made… WTF?

[Thedesolateone]

I wrote two Amazon reviews today (America’s Great Depression and Economics in One Lesson).

Amazon is part of the frontline. As LS often says, the internet is absolutely brimming with near-infinite possibilities, and given that I and many people I know seriously take Amazon reviews into account when making purchasing decisions, I think it could be really important for us to write honest and good reviews of libertarian and Austrian books. This genuinely could get more people reading them, which can only be a good thing.

[Esuric]

We need to take it to them more instead of playing defense all the time. They’re the ones who have to answer questions, not us.

Here’s my review of Capital volume one:

This book is one of the most ambiguous books ever written, mired in confusion, contradiction, and ultimately mysticism. There’s about as much economics in this book as there is in the Dao Di Jing. Its ultimate virtue, however, is that Marx unwittingly puts to sleep the labor theory of value, first put forth by Adam Smith. He logically depicts what a world should look like if classical doctrines were correct; unfortunately, his conclusions are entirely at odds with the real world–it is the ultimate reductio ad absurdum. Furthermore, this book is responsible for the murder and starvation of millions, as capital accumulation and the division of labor must necessarily disintegrate without private ownership over the means of production. Capital is heterogeneous, and complementary, and as such, requires disseminated ownership and a dynamic process of trial and error on the part of the capitalists, along with a functional price mechanism coordinating production. Essentially, this book shouldn’t be read by anyone serious, which is why it’s basically only read by philosophy and English professors at community colleges.

It was known, long before Smith fused his own personal Calvinist beliefs with economics, that value does not exist in the material world, but rather is confined to the subjective preferences of individuals. The mixture of religion and economics inevitably breeds inescapable confusion and contradiction, as demonstrated by Ricardo who proclaimed, “I cannot get over the difficulty of the wine which is kept in the cellar for three or four years [i.e., while constantly increasing in exchange value], or that of the oak tree, which perhaps originally had not 2 s. expended on it in the way of labour, and yet comes to be worth £100.” The idea that labor magically creates value, on its own, is something even the most socialistically inclined economic student is unable to take seriously. Furthermore, the labor theory of value does not allow for mutually beneficial exchange, and therefore cannot explain why voluntary exchange takes place, and ultimately why prices emerge. Marx was fully aware of the transformation problem, and promised to fully explain it in this book, but fails to do so.

Without the labor theory of value, you don’t have exploitation, and therefore can’t accept his dialectic. As Bohm-Bawerk explained, factors of production are co-dependent, that is, no factor produces anything on its own. Without capital, the laborer has nothing, and without nature, the capital cannot come into existence. The capitalists earn interest because he contributes to the production process, and the goods are valued more than the remuneration to the original means of production (labor and land) because of time preference. Marxists and Neoclassical choose to ignore the fact that an apple today does not have the same value as an apple ten days from now, ten months from now, or ten years from now. To ignore the element of time is to ignore the primary cause of economic activity and social interaction. This is why anti-liberal economists are forced to reject the Marxian framework in favor of Keynesian analysis.

Furthermore, the so-called tension between the forces and relations of production are, of course, entirely illusory. There is no contradiction, as the laborers demand capital in order to increase their productivity, and therefore their remunerations. The empirical evidence supporting this claim is torrential, as nations with plentiful and dynamic capitalists (and relatively minimal government interference) have the highest income per capita, and standard of living. And nations, who have taken this horrific book seriously, are forever trapped in poverty and face unspeakable human right violations. The dramatic and inescapable contradiction which plagues this book is that, on the on hand, Marx focuses on social relation, and yet, at the same time, this book ultimately seeks to end all voluntary social interaction.

Don’t waste your money on this incomprehensible and intellectually barren book.

[Laughing_Man]

That is the guy in the recent Amazon discussion with Suo

[Esuric]

@Laughing Man

That is the guy in the recent Amazon discussion with Suo

Yeah, but we keep responding to them. I want them to respond to us.

[AdrianHealey]

@Esuric

We need to take it to them more instead of playing defense all the time. They’re the ones who have to answer questions, not us.

Here’s my review of Capital volume one:

This book is one of the most ambiguous books ever written, mired in confusion, contradiction, and ultimately mysticism. There’s about as much economics in this book as there is in the Dao Di Jing. Its ultimate virtue, however, is that Marx unwittingly puts to sleep the labor theory of value, first put forth by Adam Smith. He logically depicts what a world should look like if classical doctrines were correct; unfortunately, his conclusions are entirely at odds with the real world–it is the ultimate reductio ad absurdum. Furthermore, this book is responsible for the murder and starvation of millions, as capital accumulation and the division of labor must necessarily disintegrate without private ownership over the means of production. Capital is heterogeneous, and complementary, and as such, requires disseminated ownership and a dynamic process of trial and error on the part of the capitalists, along with a functional price mechanism coordinating production. Essentially, this book shouldn’t be read by anyone serious, which is why it’s basically only read by philosophy and English professors at community colleges.

It was known, long before Smith fused his own personal Calvinist beliefs with economics, that value does not exist in the material world, but rather is confined to the subjective preferences of individuals. The mixture of religion and economics inevitably breeds inescapable confusion and contradiction, as demonstrated by Ricardo who proclaimed, “I cannot get over the difficulty of the wine which is kept in the cellar for three or four years [i.e., while constantly increasing in exchange value], or that of the oak tree, which perhaps originally had not 2 s. expended on it in the way of labour, and yet comes to be worth £100.” The idea that labor magically creates value, on its own, is something even the most socialistically inclined economic student is unable to take seriously. Furthermore, the labor theory of value does not allow for mutually beneficial exchange, and therefore cannot explain why voluntary exchange takes place, and ultimately why prices emerge. Marx was fully aware of the transformation problem, and promised to fully explain it in this book, but fails to do so.

Without the labor theory of value, you don’t have exploitation, and therefore can’t accept his dialectic. As Bohm-Bawerk explained, factors of production are co-dependent, that is, no factor produces anything on its own. Without capital, the laborer has nothing, and without nature, the capital cannot come into existence. The capitalists earn interest because he contributes to the production process, and the goods are valued more than the remuneration to the original means of production (labor and land) because of time preference. Marxists and Neoclassical choose to ignore the fact that an apple today does not have the same value as an apple ten days from now, ten months from now, or ten years from now. To ignore the element of time is to ignore the primary cause of economic activity and social interaction. This is why anti-liberal economists are forced to reject the Marxian framework in favor of Keynesian analysis.

Furthermore, the so-called tension between the forces and relations of production are, of course, entirely illusory. There is no contradiction, as the laborers demand capital in order to increase their productivity, and therefore their remunerations. The empirical evidence supporting this claim is torrential, as nations with plentiful and dynamic capitalists (and relatively minimal government interference) have the highest income per capita, and standard of living. And nations, who have taken this horrific book seriously, are forever trapped in poverty and face unspeakable human right violations. The dramatic and inescapable contradiction which plagues this book is that, on the on hand, Marx focuses on social relation, and yet, at the same time, this book ultimately seeks to end all voluntary social interaction.

Don’t waste your money on this incomprehensible and intellectually barren book.

I don’t think this is a good review. You are making a bunch of irrelevant points and you are mainly advocating Austrian Economics, not really reviewing the book on his own sake. Not how I would review a book.

[AdrianHealey]

@Esuric

We need to take it to them more instead of playing defense all the time. They’re the ones who have to answer questions, not us.

Here’s my review of Capital volume one:

This book is one of the most ambiguous books ever written, mired in confusion, contradiction, and ultimately mysticism. There’s about as much economics in this book as there is in the Dao Di Jing. Its ultimate virtue, however, is that Marx unwittingly puts to sleep the labor theory of value, first put forth by Adam Smith. He logically depicts what a world should look like if classical doctrines were correct; unfortunately, his conclusions are entirely at odds with the real world–it is the ultimate reductio ad absurdum. Furthermore, this book is responsible for the murder and starvation of millions, as capital accumulation and the division of labor must necessarily disintegrate without private ownership over the means of production. Capital is heterogeneous, and complementary, and as such, requires disseminated ownership and a dynamic process of trial and error on the part of the capitalists, along with a functional price mechanism coordinating production. Essentially, this book shouldn’t be read by anyone serious, which is why it’s basically only read by philosophy and English professors at community colleges.

It was known, long before Smith fused his own personal Calvinist beliefs with economics, that value does not exist in the material world, but rather is confined to the subjective preferences of individuals. The mixture of religion and economics inevitably breeds inescapable confusion and contradiction, as demonstrated by Ricardo who proclaimed, “I cannot get over the difficulty of the wine which is kept in the cellar for three or four years [i.e., while constantly increasing in exchange value], or that of the oak tree, which perhaps originally had not 2 s. expended on it in the way of labour, and yet comes to be worth £100.” The idea that labor magically creates value, on its own, is something even the most socialistically inclined economic student is unable to take seriously. Furthermore, the labor theory of value does not allow for mutually beneficial exchange, and therefore cannot explain why voluntary exchange takes place, and ultimately why prices emerge. Marx was fully aware of the transformation problem, and promised to fully explain it in this book, but fails to do so.

Without the labor theory of value, you don’t have exploitation, and therefore can’t accept his dialectic. As Bohm-Bawerk explained, factors of production are co-dependent, that is, no factor produces anything on its own. Without capital, the laborer has nothing, and without nature, the capital cannot come into existence. The capitalists earn interest because he contributes to the production process, and the goods are valued more than the remuneration to the original means of production (labor and land) because of time preference. Marxists and Neoclassical choose to ignore the fact that an apple today does not have the same value as an apple ten days from now, ten months from now, or ten years from now. To ignore the element of time is to ignore the primary cause of economic activity and social interaction. This is why anti-liberal economists are forced to reject the Marxian framework in favor of Keynesian analysis.

Furthermore, the so-called tension between the forces and relations of production are, of course, entirely illusory. There is no contradiction, as the laborers demand capital in order to increase their productivity, and therefore their remunerations. The empirical evidence supporting this claim is torrential, as nations with plentiful and dynamic capitalists (and relatively minimal government interference) have the highest income per capita, and standard of living. And nations, who have taken this horrific book seriously, are forever trapped in poverty and face unspeakable human right violations. The dramatic and inescapable contradiction which plagues this book is that, on the on hand, Marx focuses on social relation, and yet, at the same time, this book ultimately seeks to end all voluntary social interaction.

Don’t waste your money on this incomprehensible and intellectually barren book.

I don’t think this is a good review. You are making a bunch of irrelevant points and you are mainly advocating Austrian Economics, not really reviewing the book on his own sake. Not how I would review a book.

[Esuric]

@AdrianHealey

I don’t think this is a good review. You are making a bunch of irrelevant points and you are mainly advocating Austrian Economics, not really reviewing the book on his own sake. Not how I would review a book.

Again, I’m not interested in reviewing entirely refuted mystical doctrines. I went there looking for a fight.

[Smiling_Dave]

I think it’s a great review, and I think the points brought up are very relevant.

I also think pointing out the many flaws in the book, and how its real world application has led to disaster, is reviewing the book on his own sake [accepting Adrian’s version of English syntax].

[AdrianHealey]

Of course the points (labor theory of value, inconsistency pointed out by Bohm-Bawerk, heterogeneity of capital) are relevant, and of course pointing out flaws is relevant, but that’s not the only thing, nor the main thing that’s part of the review. Imagine reading a review of Human Action in which the reviewer basicly says ‘Yeah, this is irrelevant. Positive Economics is better for so and so and so and so.’ I won’t qualify that as relevant in a review. I wouldn’t call that a good review.

A socialist could, and justly so, that this review was picking on a strawman. The labor theory of value has a more complicated (but wrong nonetheless) role in the Marxian analysis, then just saying ‘hey, when you have a labour theory of value, you can’t have exchange!’ I’m not advocating Marxism; just trying to explain why I don’t like this review qua review.

Like the author said: he wasn’t there to produce a good review, he was there to pick a fight. For the purpose of picking a fight, I think this is an excellent piece of work. As a review, it is not.

But then again, It might be because I just have a different style of reviewing. (Which I do a lot of.) Feel free to disagree.

By the way: could you please point out the relevant passage in which Marx advocated a centrally planned economy USSR style in Das Kapital? Imagine, again, a review in witch the author says that the crazy Misesian ideas (or, more relevant to history, Friedmanian ideas) were responsible for Chili? Books are responsible for nothing, people are responsible for their actions and the ideas they believe. If a reviewer dismissed Mein Kampf (Hitler’s books) just because Hitler was responsible for WOII, this would still be a bad review. There is no ‘real world application’ of Das Kapital. It’s a crony analysis, not a normatieve book.

[Esuric]

@AdrianHealey

he labor theory of value has a more complicated (but wrong nonetheless) role in the Marxian analysis, then just saying ‘hey, when you have a labour theory of value, you can’t have exchange!’ I’m not advocating Marxism; just trying to explain why I don’t like this review qua review.

There can be no mutually beneficial voluntary exchange with the labor theory of value. When value is categorically determined, either one good is more valuable than another, or they’re equal in value (making exchange impossible).