Luwig von Mises - Human Action - Third Revised edition - 1949 - pages 879-880
Economics and Freedom
The paramount role that economic ideas play in the determination of civic affairs explains why governments, political parties and pressure groups are intent upon restricting the freedom of economic thought. They are anxious to propaganise the "good" doctrine and to silence the voice of the "bad" doctrines. As they see it, truth has no inherent power which could make it ultimately prevail solely by virtue of its being true. In order to carry on, truth needs to be backed by violent action on the part of the police or other armed troops. In this view, the criterion of a doctrine's truth is the fact that its supporters succeeded in defeating by force of arms the champions of dissenting views. It is implied that God or some mythical agency directing the course of human affairs always bestows victory upon those fighting for a good cause. Government is from God and has the sacred duty of exterminating the heretic.
It is useless to dwell upon the contradictions and inconsistencies of this doctrine of intolerance and presecution of dissenters. Never before has the world known such a cleverly contrived system of propaganda and oppression as that instituted by contemporary governments, parties and pressure groups. However, all these edifices will crumble like houses of cards as soon as a great ideology attacks them.
Not only in the countries ruled by barbarian and neobarbarian despots, but no less in the so-called Western democracies, the study of economics is practically outlawed today. The public discussion of economic problems ignores almost entirely all that has been said by economists in the last two hundred years. Prices, wage rates, interest rates and profits are dealt with as if their determination were not subject to any law. Governments try to decree and to enforce maximum commodity prices and minimum wage rates. Statesmen exhort businessmen to cut down profits, to lower prices, and to raise wage rates as if these matters were dependent on the laudible intentions if individuals. In the treatment of international economic relations people blithely resort to the most naive fallacies of Mercantilism. Few are aware of the shortcomings of all these popular doctrines, or realise why the policies based upon them invariably spread disaster.
These are the sad facts. However, there is only one way in which a man can respond to them: by never relaxing in the search for truth.
We do not know exactly when Mises wrote these words, but the book in which they appeared was first published in 1949. The factors he describes in the short exerpt quoted above have not changed in any way in the intervening 56 years. They remain the "sad facts". Indeed, they have become vastly worse.
The fundamentals of economics - and politics - are easily grasped. We have had our own version of them up on this website for the past decade. To build on such a foundation a science which fully explains the means by which individual human cooperation can best advance the prosperity and well being of EVERYONE is not easy at all. It calls for an exceedingly high level of reasoning ability and an equally high level of intellectual honesty.
Thankfully for us all, individuals who posess both of these attributes are always among us. Some of them, von Mises himself being perhaps the outstanding example, concerned themselves with the problems of economics. They solved these problems, all these problems. The job was all but completed by the outbreak of WWI and the final touches, notably Mises' irrefutable demonstration of the impossibility of economic calculation under Socialism, were added by the early 1920s.
Today, we live in a world replete with "economists" but in which, to again quote von Mises: "the public discussion of economic problems ignores almost entirely all that has been said by economists in the last two hundred years." To fully grasp the danger of this situation, consider what entering a hospital would be like today if all that has been said by the medical profession for the past 255 years was ignored. And don't even think about what it would be like to go to a dentist!
The reason why we have always emphasised Gold both here on our website and in The Privateer itself is that the relationship between Gold and what passes for both "politics" and "economics" is the most eloquent illustration of the collapse of the latter. It was the systematic separation of Gold and what is used as the medium of exchange which made the deterioration of both economics and politics possible. Lenin boasted that when he was victorious on a world scale: "We shall use gold for the purpose of building public lavatories in the streets of some of the largest cities of the world." Look at the results. Keynes called Gold "the barbarous relic". Look at the results.
Now here is another quote:
Robert A Heinlein - Stranger In A Strange Land - 1961
Then suddenly, with a grokking so blinding that he trembled, he understood money. These pretty pictures and bright medallions were not 'money'; they were symbols for an idea which spread through these people, all through their world. But things were not money, any more than water shared was a growing closer. Money was an idea, as abstract as an Old One's thoughts - money was a great structural symbol for balancing and healing and growing closer.
Mike was dazzled with the magnificent beauty of money.
The flow and change and countermarching of symbols was beautiful in small, reminding him of games taught nestlings to encourage them to reason and grow, but it was the totality that dazzled him, an entire world reflected in one dynamic symbol structure. Mike then grokked that the Old Ones of this race were very old indeed to have composed such beauty; he wished humbly to be allowed to meet one.
Money (a medium of exchange) is indeed a concept of "magnificent beauty". It is also the bridge from barbarism to civilisation. Without such a concept, the progress of the past 3000 years would not have taken place. To pervert, dabauch and do one's utmost to destroy such a concept is an act of savagery hardly to be matched even by the Mongol hordes or the followers of Lenin and Stalin.
A medium of EXCHANGE produced out of thin air is a contradiction in terms. No rational science of economics or politics can be built on such a "foundation", and none ever has. And while it is true that money is at the root an idea, that idea must be embodied in something of value to be useful. That something of value, evolved over almost three millenia, is Gold.
Re-establish exchange on a rational basis, and everything else follows - prosperity, progress, achievement, benevolence, peace, and goodwill. There is a political term which subsumes all these highly desirable states, and many more besides. That term is FREEDOM. At the root of freedom is the understanding of economics. At the root of the understanding of economics is the understanding of money - both as an idea and as a physically existing entity. And at the root of money is Gold. Like we said here last week - it's really very simple.