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Source link: http://archive.mises.org/10843/a-theory-of-socialism-and-capitalism/

A Theory of Socialism and Capitalism

October 15, 2009 by

The great practical advantage of the Austrian School is that it is a form of economic analysis that is founded in realism and helps us understand both progress and problems in the real world. FULL ARTICLE


Mike C. October 15, 2009 at 11:24 am

“…my experience with students suggests that the most fruitful strategy is to spread the knowledge of the Austrian School to as wide an audience as possible, particularly among those with an open mind. The great practical advantage of the Austrian School is that it is a form of economic analysis that is founded in realism and helps us understand both progress and problems in the real world. Therefore, it is a useful tool for people in the real world, but is of little use, and indeed is a threat, to mainstream academic economists.”

This holds true in life in general… it is far easier, in many cases, to train a new or less experienced student or worker as they do not first have to be convinced to relinquish personal investments in old concepts and/or bad habits.

Abhilash Nambiar October 15, 2009 at 12:21 pm

I think I can understand what Mark Thornton is trying to say. The real life implications of the Austrian Economic theories are profound yet simple, intuitive and practical. That makes it extremely potent on the un-indoctrinated and the open minded. But I try to refrain from using the words ‘Austrian Economics’, it is just proper economics. I do not want people to think that these are strange teachings of some fringe cult.

Mrhuh October 15, 2009 at 1:57 pm

I’ve often been skeptical of full-blown anarcho-capitalism. A few points to be made. First, does a city-state count as a state per se, or as a voluntary organization itself. Two, if defense is best handled by private, voluntary organizations, then how does one account for the growth of the state in the ancient world. And the ability of some to subject others into paying tribute (i.e. taxation). Third, wouldn’t a voluntary group be the equivalent of direct democracy. How is this different from the majority rule that Hoppe seems to oppose though. The problem with modern representative democracy is precisely the fact that it isn’t really any direct control over things.

Anonymous October 15, 2009 at 2:10 pm

“A Theory of Socialism and Capitalism” is certainly a treasure. It’s one of the most important books I’ve ever read.


thomas October 15, 2009 at 3:44 pm

Thank you for the tip about “A Theory of Socialism and Capitalism”. I downloaded it from the Literature section immediately after reading this piece, and it is one of the better books I’ve read for quite some time.

Foxwood October 15, 2009 at 5:31 pm

Do you know what the teacher’s unions do for your children?
Do you know why the founding fathers are not taught in school anymore?


Thinker October 15, 2009 at 10:29 pm


1. A city-state is a state in as much as it enforces its authority on those who do not wish to be subject to it; this is the same as with any state

2. The purpose of a state is not defense, but oppression, which it does quite well. A state comes into being and grows because some people wish to oppress others and benefit from that oppression. To help justify and maintain its existence, the state offers defense services and quashes any private organization that becomes so effective and expansive in the provision of defense services that it becomes a threat to the “necessity” of the state.

3. Voluntary associations differ from direct democracy in that entry is voluntary. With democracy, as with all forms of government, the state determines who is subject to its rulings; with a voluntary association, each person makes that determination for his or herself.

Hop(p)e this answers your questions.

Fallon October 15, 2009 at 11:31 pm


I recognize the Franz Oppenheimer, Murray Rothbard et al. take on the origins of the state. But do you think it possible for a state to form in an instance of voluntaryism (and maybe ignorance)?

Gil October 16, 2009 at 12:20 am


1. If there’s an open emigration policy then there’s no problem.

2. People form states because of safety in numbers. As soon as you share a flat with someone else you’ll quickly find out that uber-freedom is the preserve of the rugged individual. People cannot cohabit with others without a certain amout of freedom loss.

3. It’s tricky to tell what a voluntary society would really look like if there’s going to be splitting of hairs. Maybe there are plenty of people who complain they’re not free because they are willing to hurt others in their quest for personal freedom thus one person’s voluntary society isn’t another’s.

raul October 16, 2009 at 7:01 am

Men do not want freedom, they want a just master. (approx) Sallust
Gaius Sallustius Crispus, generally known simply as Sallust, (86-34 BC)

raul October 16, 2009 at 7:07 am

Like Mises on Money, Muray Rothbard should have established a regression theorem for the State.
How did the original “State” emerge?

mpolzkill October 16, 2009 at 7:54 am

“Few men desire liberty; most men wish only for a just master.”

Yep, that’s pretty much the whole ball of wax. Thanks, Raul.

Fallon October 16, 2009 at 1:23 pm

Raul, nicely done. You would expect this kind of analysis from a friend of Caesar. Wouldn’t Sallust be the envy of many a politician today? Having spent his working years brutally plundering under the protection of Caesar, Sallust, apparently, retired to uninterrupted peace and comfort, free to pursue horticultural splendor and scholarly endeavor.

Foxwood October 17, 2009 at 6:38 pm

That it’s so “in” to be a Communist now just amazes me. The Commies have come out of the closet. Problem is, one is in the White House today. :(


Fallon October 17, 2009 at 9:29 pm


Prof. Hoppe is an anarchist. Do you hate him as much as the “communists”?

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