“Soviet-style central planning may have died with the fall of the Berlin Wall in 1989 and the collapse of the Soviet Union in 1991. But what has not yet had that demise is that other variation on the collectivist theme: ‘democratic socialism’ (European-style) and the redistributive welfare state.”
“But what is required, what is asked of all of us who care about liberty, is not to allow the everyday ‘trends’ and outcomes of electoral politics to make us so despondent that we ‘give up the good fight.’ Only if we do so will the institutions of the paternalistic welfare state remain intact — even as the money dries up!”
It is worth recalling the state of the world when Ludwig von Mises wrote “Trends Can Change” 61 years ago (see Part I in this series).
Nazi socialism had been defeated six years earlier in 1945. But Soviet-style socialism seemed to be the wave of the future. Stalin had imposed an “iron curtain” over Eastern Europe. Two years earlier, in 1949, communism had triumphed in mainland China under Chairman Mao. And the U.S. was in the midst of fighting a war in Korea against the Chinese Communists who had come to the aid of the North Koreans.
At home, under President Harry Truman, wage and price controls had been imposed in the name of the (Korean) “war effort,” and the steel industry had been threatened with nationalization as part of a wartime “national emergency.” And due to the “Red Scare,” civil liberties seemed threatened on the basis of a person’s political beliefs.
The trends toward collectivism at home and abroad seemed irresistible and “inevitable.”
Freedom Foes: Old and New
Yet a half century later, we learned that it was Soviet communism that ended up (to use Karl Marx’s phrase) on the “ash heap of history.”
Soviet-style central planning may have died with the fall of the Berlin Wall in 1989 and the collapse of the Soviet Union in 1991. But what has not yet had that demise is that other variation on the collectivist theme: “democratic socialism” (European-style) and the redistributive welfare state.
But this brand of Statism, too, may be reaching it’s end. We see this in the reaching of the final stumbling block to building any form of the “socialist paradise” in some parts of Europe: no more money!
Those born and raised to expect to be taken care of by, and feed from the “social safety nets” of, the welfare state are strongly resisting “austerity” measures. (That means being expected for you and the country you live in to live within its means, and to introduce more freer market flexibilities and competitive opportunities for growth to be reset in motion on a more market-based sustainable basis.)
This resistance is because the acceptance of reality often lags behind what reality is telling you.
The Friedmans on Social Change
This is why, when it seems that political and economic change for the better seems so difficult, that we also need to remember the observation from leading free-market thinkers that political change tends to lag behind intellectual currents of opinion.
Milton and Rose Friedman in a 1989 essay, “The Tide in the Affairs of Men,” noted:
[A] major change in social and economic policy is preceded by a shift in the climate of intellectual opinion, itself generated, at least in part, by contemporaneous social, political, and economic circumstances.
This shift may begin in one country but, if it proves lasting, ultimately spreads worldwide. At first it will have little effect on social and economic policy. After a lag, sometimes of decades, an intellectual tide “taken at its flood” will spread at first gradually, then more rapidly, to the public at large and through the public’s pressure on government will affect the course of economic, social, and political policy.
As the tide in events reaches its flood, the intellectual tide starts to ebb, offset by what A. V. Dicey calls counter-currents of opinion. The counter-currents typically represent a reaction to the practical consequences attributed to the earlier intellectual tide. Promise tends to be utopian. Performance never is and therefore disappoints. The initial protagonists of the intellectual tide die out and the intellectual quality of their followers and supporters inevitably declines.
It takes intellectual independence and courage to start a counter-current to dominant opinion. It takes far less of either to climb on a bandwagon. The venturesome, independent, and courageous young seek new fields to conquer and that calls for exploring the new and untried. The counter-currents that gather force set in motion the next tidal wave, and the process is repeated.
The Friedmans quote Shakespeare (in Julius Caesar):
There is a tide in the affairs of men,
Which, taken at the flood, leads on to fortune;
Omitted, all the voyage of their life
Is bound in shallows and in miseries.
The modern welfare state is the political reality of philosophical and ideological trends that became entrenched many decades ago. As F. A. Hayek emphasized in “The Intellectuals and Socialism” (1949), discussed here, that the pattern usually was for a new set of ideas not to be fully implemented for decades after they first come into fashion. Because it takes a long time for those ideas to spread and become embedded in the minds of the general intellectual community, and through them in the wider society as expressed in accepted “public opinion.”
During the decades after the Second World War, a revolutionary “counter-revolution” began to emerge against the socialist trends of the time. This revolutionary counter-revolution has been the slow “rediscovery” and articulation of the principles of and the case for individual liberty, limited government, and free markets.
… And I Remember
What is one manifestation of this freedom-oriented intellectual trend? When I was a teenager in the 1960s, I could pride myself in being able to keep up with and read virtually everything that was published by conservative and libertarian thinkers.
How was that possible? Because at that time, all of this literature amounted to two or three magazines (The Freeman, National Review, and Human Events), and other literature from one existing free market “think tank” — the Foundation for Economic Education — and three publishing houses (Arlington House, Henry Regnery, and Devin-Adair).
Compare that with today. No one—even speed readers—can keep up with the quantity and quality of daily, weekly and monthly literature that comes forth from nationwide and state-level conservative and libertarian free market think tanks and organizations. Or the numerous books that appear from “mainstream” publishing houses. And this does not even come close to the “flood” of freedom material and ideas over the internet and on blog sites by the hour every day.
This really is a revolutionary reawakening of the ideas and ideals of the free society.
Courage and Patience Required
But it takes years, sometimes decades, for these ideas to fully and effectively enter the “bloodstream” of intellectual respectability and general society-wide public opinion.
We are still partly in the stage of this “change in trends” to which Ludwig von Mises referred. The “new wave” of freedom ideas is still beating against the incrusted “sea wall” of the preceding collectivist trends and their embedded political and economic institutions.
But just as the ocean’s waves eventually bring down the sea wall, the ideas of liberty will triumph once again.
But what is required, what is asked of all of us who care about liberty, is not to allow the everyday “trends” and outcomes of electoral politics to make us so despondent that we “give up the good fight.” Only if we do so will the institutions of the paternalistic welfare state remain intact — even as the money dries up!
Our society will reach some truly historical and momentous cross roads as some time. When it does, and America really has to go “this way or that,” it will be necessary that the friends of freedom have done their job. So that when that time comes the idea of liberty will be considered by enough people in our society as the only path to follow, and not further down a road to serfdom.
So, yes, Ludwig von Mises was right. Trends can change, if enough people have the courage, determination, and understanding to help make it happen.