Ludwig von Mises on Human Action and the Free Society

By Richard Ebeling

Originally published on September 23, 2024 for The Future of Freedom Foundation

Seventy-five years ago, on September 14, 1949, Yale University Press published Ludwig von Mises’s Human Action: A Treatise on Economics. Almost 900 pages in length, it soon became recognized as one of the major works in economics in the twentieth century.

Not that this recognition was felt in the economics profession of the time. Few reviews appeared in the professional economics journals, and the ones that did were far from complimentary. This was not surprising given the dominance of Keynesian and socialist ideas in the years following the Second World War. Few were the voices in the economics profession who were consistent advocates of a liberal, free-market perspective or had the courage to challenge the theoretical and economic policy orthodoxy of that time.

It was presumed that the Great Depression had “proven” the failure of unbridled capitalism and that every society needed a transformation into either some form of government centralized planning or at least strong fiscal and monetary intervention by the federal government to ensure economy-wide stability and full employment. At the same time, any “reformed” capitalist system needed government regulatory restrictions on market competition to prevent monopoly and unfair business practices, along with a larger and larger redistributive welfare state.

But then in 1949 there appeared this major work that not only offered a systematic and detailed analysis of the logic and workings of the free market and its dynamic competitive process but also defended its philosophical foundations, its historical importance, and its institutional prerequisites if there was to be a free and prosperous society.

Shortly after the German-language predecessor of Human Action had been published in Switzerland in 1940 under the title Nationalökonomie, Mises’s friend and colleague Friedrich A. Hayek wrote in a review:

There appears to be a width of view and an intellectual spaciousness about the whole book that are much more like that of an eighteenth-century philosopher than that of a modern specialist. And yet, and perhaps because of this, one feels throughout much nearer reality, and is constantly recalled from the discussion of the technicalities to the consideration of the great problems of our time…. It ranges from the most general philosophical problems raised by all scientific study of human action to the major problems of economic policy of our time…. The result is a really imposing unified system of a liberal social philosophy. It is here also, more than elsewhere, that the author’s astonishing knowledge of history as well as the contemporary world helps most to illustrate his argument.

Similarly, when Human Action appeared in 1949, the free-market journalist and Newsweekcolumnist Henry Hazlitt wrote in his weekly article:

[The] book is destined to become a landmark in the progress of economics…. Human Action is, in short, the most uncompromising and the most rigorously reasoned statement of the case for capitalism that has yet appeared…. It should become the leading text of everyone who believes in freedom, in individualism, and the ability of a free-market economy not only to outdistance any government-planned system in the production of goods and services for the masses, but to promote and safeguard, as no collectivist tyranny can ever do, those intellectual, cultural, and moral values upon which all civilization ultimately rests.

The foundations of the study of human action

The very structure of Mises’s book made it seem alien to the mainstream of the economics profession when it appeared. Economics was increasingly becoming a narrowly technical and highly mathematical discipline, with a growing use of and dependency on aggregate statistical data in designing theories and “models” of the economy.

Instead, the first 200 pages of Human Action were devoted to the philosophical and epistemological problems of the human sciences, especially economics and history. Most economists had come to believe that if economics was to be a “real” science, it needed to ape the methods and techniques of the natural sciences. This was the reason behind the presumption that all economic theorizing required the reduction of human activity and interactions to mathematical functions and simultaneous equations to achieve states of economic equilibrium. Statistical data was assumed to capture and incorporate the objectively measurable aspects of human conduct that would ensure economics becoming an “empirical” science for hypothesis testing and predictions of future economic trends.

Mises challenged this entire direction of the economics profession. He argued that there was a distinctly unique quality and characteristic to the study of human beings. Unlike the inanimate objects of the world that fields like physics or chemistry primarily studied, man acts. That is, human beings have consciousness. They think and reason. They reflect on their past and imagine their future. They conceive of desired ends to pursue and imagine means and methods to try to successfully realize those ends.

The study of economics, Mises said, began with reflections on the logical workings of man’s own mind because all human action is nothing more than human reason applied to the pursuit of human purposes. Economics, therefore, begins not with observations of the external manifestations of the outcomes of human action but with an introspective reflection on the logical structure of human reasoning.

What, then, does it mean to “act” and to be able to act? Mises stated that there were three prerequisites in the context of which human beings undertook purposeful action: First, causality. The individual must believe that there are discoverable causal relationships the use of which could enable a desired end to be achievable. Second, uncertainty. The actor must believe that his actions can influence the course of events in such a way that future circumstances may be made different than they would have been if not for his active intervention. Third, temporality. Causality implies the existence of time, since any action undertaken implies a before, a during, and an after. Therefore, all human action occurs in and through time and is something about which man is not indifferent.

While these three elements —causality, uncertainty, and time —are inseparable from the very notion of the “doing” of an action, there remain three other conditions that must be present: First, a feeling of uneasiness. The actor must be dissatisfied in some way with his present or expected circumstances. Second, an imagined and preferred state of affairs. The actor is able to imagine and project into the future a situation or circumstance he would prefer to the one that is likely to prevail if he does not act. Third, a belief or expectations about the availability of useable and useful means to bring his preferred state of affairs into existence at a point in the future.

From these fundamental concepts, Mises argued, all the core principles and relationships of economics were derivable. The reality of the world shows man that many of the available and useful means are insufficient to simultaneously pursue all his desired ends. This implies that the human actor must rank his desired ends in some order of relative importance and apply the means for pursuing these ends in a descending order reflecting the subjective (personal) valuation of these ends. While some choices are categorical (either/or), most choices, due to the discreteness of both the ends and the means, are incremental (“marginal”) in nature. This imposes upon man the necessity of trade-offs, that is, a little bit more of this versus a little bit less of that. Hence, scarcity of means for the attainment of ends imposes upon man the necessity of choice.

Every such trade-off likewise implies something given up in exchange for something gained. That which is potentially gained from a trade-off is the benefit of a choice, while that which is given up or forgone is the cost of any choice. The profit from such trade-offs is the subjective sense of a net improvement in personal wellbeing from having or achieving the “A” over the “B” that is given up. However, since all actions and choices undertaken are done so under degrees of uncertainty, it is always possible that after an action and trade, the actor will find that the outcome was less than he expected and hoped for. He may regret the choice made and consider himself worse rather than better off; that is, he has suffered a loss.

None of this has anything to do with mathematical functions or data collection and statistical correlation. They precede any attempt to represent human decision-making in mathematical functional form, because it would not be known how to formulate the nature and shape of the functions without this prior introspective knowledge of how human beings think, reason, and act. And it is the choices first made in the minds of interacting human beings about valuations of both ends and means before any external manifestation of it occurs in the forms of production and consumption, buying and selling, prices offered, and bids made and agreed upon in the marketplace that the data collector and statistician attempt to arrange and correlate.

This led Mises to conclude:

Economics is not about things and tangible material objects; it is about men, their meanings and actions. Goods, commodities, and wealth and all the other notions of conduct are not elements of nature; they are elements of human meaning and conduct. He who wants to deal with them must not look at the external world; he must search for them in the meaning of acting men.

This is why for Mises social and market interactions not only begin with individuals — after all, only individuals think, reason, and act — but that human actions arise from people’s subjective interpretations of the world. What are desirable ends and useful means, what are the methods by which means may be applied to achieve ends, what is valued more and what less, which trade-offs would make the actor better off or worse off, and what outcomes would be considered a net gain rather than a loss? None of this is independent and separable from the subjective (personal) interpretations and judgements of the individual human actors.

Equally, all human interactions arise from and depend upon how the actors view the intentions and actions of others. Someone is running toward you waving his arms late at night in a dark alley. Is he a threatening attacker or a long lost relative rapidly approaching to embrace you? The man standing over you has a pointed, sharp instrument in his hand. Is he planning to use this knife to kill you, or is he a surgeon about to make an incision with a scalpel to save your life? Are a group of people jumping up and down in a circle performing a war dance or celebrating at a wedding? The meanings seen in one’s own actions and that of others defines and determines the type of social and economic interactions they are and which influence the respective actions each individual plans and undertakes.

It was Mises’s emphasis on methodological individualism and subjectivism that made Hayek observe in The Counter-Revolution of Science (1952):

It is probably no exaggeration to say that every important advance in economic theory during the last one hundred years was a further step in the consistent application of subjectivism…. This is a development which has probably been carried out most consistently by Ludwig von Mises, and I believe that most peculiarities of his views which at first strike many readers as strange and unacceptable trace to the fact that in the consistent development of the subjectivist approach, he has for a long time moved ahead of his contemporaries.”

Division of labor as the bond of human association

Society emerged out of a long evolutionary process of various forms of human association based on intersubjective beliefs and rules of interaction. The fundamental basis of human beings continuously living together, Mises argued, was the tacit discovery of the benefits from division of labor, that specialization of activities and tasks are far superior to attempts at self-sufficient methods of production to satisfy people’s wants.

From the most ancient of primitive, tribal times, some men were found to be better at fishing or tool making, while others had advantages at hunting or as warriors to protect the tribe from the threats of rival human groups. “The division of labor is what first makes social ties,” Mises explained, “it is the social element pure and simple.” Throughout history, there have been two general forms of human association under division of labor: hegemonic and contractual. Hegemonic relationships are based on command and subjugation, with one or a small group of men ruling over and controlling and directing the actions of others under the threat or use of force. Contractual relationships are based on voluntary agreement and mutual consent of the participants in the association.

The history of human civilization has been a slow replacement of the hegemonic relationship with the society of contract. Individual freedom, voluntary association, and market-based cooperation have served as the basis for the material and cultural advancement of mankind. But the improvements in the human condition have required the emergence and maintenance of certain crucial institutions. Mises explained them:

First, private property, that is, the private ownership of the means of production. Individuals have the right of possession and use of not only goods ready for consumption but the factors of production out of which final goods and services can be manufactured and used.

Second, freedom, that is, the individual liberty to be guided by one’s own purposes and plans, on the basis of which people voluntarily integrate themselves into the social system of division of labor through contract and mutual agreement concerning the terms of association and trade.

Third, peace, that is, the removal and abolition of violence from human relationships, because only in a climate of tranquil association can each individual feel secure to apply his mind, talents, and efforts for creative improvements to the human condition.

Fourth, equality, that is, equal personal and political freedom before the law so each individual may have the liberty to participate in the system of division of labor as he thinks most profitable without legal barriers or restrictions.

Fifth, inequality of wealth and income, that is, each individual’s material position in society depends on his success in serving others in the system of division of labor; the relative income and wealth positions of each individual reflects his inevitable unequal accomplishments in satisfying the wants and desires of others as demonstrated in the profits, wages, interest, or rent each earns for services rendered to their fellow man.

Sixth, limited government, that is, the political authority is restricted in its powers and responsibilities to those tasks required for the securing of the peace under which each individual’s freedom and honestly acquired property is protected from violence, fraud, and aggression.

Market, prices, and economic calculation versus socialist planning

In a system of division of labor, the privately owned means of production are set to work to produce products and provide services desired by others as the means by which each owner — including the owners of their own labor — may successfully earn the financial means to obtain, in turn, the goods and services they want that are being offered by others in their respective roles as producers.

But given the complex network of specialization, and the fact that the participants are separated from each other by both space and time, how can each person successfully communicate to all the others what they desire and are willing to pay as a consumer and what might they be able to do, and at what cost, in their role as a producer?

The answer to this became part of Ludwig von Mises’s most important and recognized contribution to economics. In the years immediately following the First World War, especially in revolutionary Russia, postwar Germany, and in some other European countries, the case was made that the time had come to do away with the capitalist system and replace it with socialist central planning. Mises responded to this with an article on “Economic Calculation in the Socialist Commonwealth” (1920), which he soon expanded into a full treatise in 1922 on the dangers and unworkability of a socialist economic order, which was later published in English as Socialism: An Economic and Sociological Analysis (1936). In the face of criticism and often vicious attacks, Mises restated and refined his argument against central planning in the pages of Human Action.

A functioning and complex market system of division of labor is made possible by the existence of a competitively generated price system on the basis of which both consumer goods and the physical means of production (land, labor, and capital) are expressed in commensurable value through a medium of exchange — money. A market-based monetary price system enables a process of economic calculation through which it is possible to compare and determine the value of outputs relative to the value of inputs in terms of sums of money.

Hence, those guiding and directing production in the market economy — the enterprising entrepreneurs — are able to estimate whether particular productive activities would be profit-making or loss-suffering and, among the alternative ways of combining the factors of production to manufacture desired products, which ones would enable the least-costly methods of bringing desired goods to market. For this reason, Mises highlighted that

Monetary calculation is the guiding star of action under the social system of division of labor. It is the compass of the man embarking upon production…. Monetary calculation is the main vehicle of planning and acting in the social setting of a society of free enterprise directed and controlled by the market and its prices…. Our civilization is inseparably linked with our methods of economic calculation. It would perish if we were to abandon this most precious intellectual tools of acting.

The socialist system of centralized government planning did away with private ownership and control of the means of production; market transactions were eliminated in determining what and how things would be produced, with no market-generated money prices informing what consumer goods or factors of production would be worth for different purposes and in different uses.

The gist of Mises argument against socialist planning can be expressed in the following way: With no private property in the means of production, there is nothing (legally) to buy and sell. With no buying and selling of the factors of production, there are no incentives for people to make bids or offers. With no bids and offers, there can be no agreed-upon terms of trade. With no agreed-upon terms of trade, there would be no real prices telling factor owners what their services and resources may be worth in alternative employments, and no way for the central planners to know what lines of production might be profit-making versus loss-creating, or which combinations of the means of production would enable the least-costly ways of producing what consumers actually want. Thus, rather than a material horn-of-plenty exceeding anything ever experienced under capitalism, socialism in practice would result in what Mises once entitled a short work of his, Planned Chaos (1947). (See my article, “The Centenary of Ludwig von Mises’s Critique of Socialism,” Future of Freedom, June 2022.)

Sovereignty of the consumers and the entrepreneur

In the free, open, and competitive market economy, the ultimate decision-makers are the consumers, who are “sovereign” in deciding what they want to buy and the prices they are willing to pay. They are the determiners of how the scarce means of production are allocated and used in producing and supplying which goods and services. But standing as the market intermediary between the consumers of the society and the factors of production employed to make what those consumers want are the entrepreneurs. Their role in the social system of division of labor is to be the undertakers of private enterprises, the decision-makers as to what to produce, where and how to produce what consumers want, and with what combinations of the factors of production.

The entrepreneur’s reward for successfully doing so are profits earned and the additional revenues for expanding his operations. Losses are the punishment for failure in mistaking what consumers desire and the prices they are willing to pay, or in doing so less effectively and less efficiently than his supply-side market rivals; unless he mends his decision-making ways, the loss-making enterpriser eventually goes out of business and control of the means of production at his disposal passes into potentially more competent entrepreneurial hands.

This dynamic and never-ending competitive market process, Mises stated, brings about the cooperative coordination of the actions of everyone in the society by determining each person’s most efficient and productive place in the division of labor. It is the process that brings about a matching of supplies with demands and creates the incentives and opportunities for entrepreneurs and others in trying their hands at producing more, better, different, and less costly goods and services in the quest for profits and avoidance of losses. The outcome has been the ever-improving standard of living that free market capitalism has brought to millions and now billions of people.

Government interventions and monetary distortions

Hampering the ability of free markets to do so to the greatest extent, Mises lamented, has been the interventionist welfare state. Government price and production regulations do not abolish the market economy, but these government interventions play the role of sand in the machine, preventing the price system from successfully coordinating all the supplies and demands in the market and hindering entrepreneurs from use their personal (subjective) knowledge, judgment, and “reading” of consumer demand to bring to market what buyers want and in the forms and types they desire. Carried far enough, government controls on prices and production cumulatively can end up imposing a form of planned economy in its place by suffocating the market with controls and regulations.

Mises’s other major contribution to economics during his lifetime was his “Austrian” theory of money and the business cycle. First presented in The Theory of Money and Credit (1912, 2nd ed., 1924) and Monetary Stabilization and Cyclical Policy (1928), he used the publication of Human Action as the opportunity to restate and refine his theory of the origin of money and of how changes in the money supply impact prices, wages, production, and resource uses in “non-neutral” distorting ways.

One form of this monetary-induced distortion of market relationships came through central bank manipulation of money and interest rates that brought about the booms and busts of the business cycle. The only real protection from this happening over and over again, Mises insisted, was the separation of money from the state through private, competitive free banking. (See my three-part series, “Ludwig von Mises and the Austrian Theory of Money, Banking and the Business Cycle,” Future of Freedom, March, April, and May 2024.)

Free markets bring freedom and prosperity

The conclusions that Mises reached based on his analysis of the market economy versus socialism versus the interventionist state was that there was no viable alternative to an open, competitive capitalist system. This was the case not only in terms of which economic system has the potential to most effectively “deliver the goods” that people want and at the least cost but also in the sense of providing the individual with the greatest degree of personal freedom consistent with a peaceful living with others in society.

Private property provides the individual an autonomous sphere in which to live independently of the control and command of government through his own actions and interactions with other private individuals by the voluntary associations of the marketplace. Such freedom is threatened and does not exist in any political arrangement
in which government has a commanding control of production and employment. Especially under socialism, there are no employment opportunities, no accesses to the necessities or amenities of life, or availability to independent sources of knowledge and information outside of the State. As Mises pointed out:

The concepts of freedom and bondage make sense only when referring to the way in which government operates…. As far as the government — the social apparatus of compulsion and oppression — confines the exercise of its violence and the threat of such violence to the suppression and prevention of antisocial action, there prevails what reasonably and meaningfully can be called liberty….

Liberty and freedom are the conditions of man within a contractual society. Social cooperation under a system of private ownership of the factors of production means that within the range of the market the individual is not bound to obey and to serve an overlord. As far as he gives and serves other people, he does so of his own accord in order to be rewarded and served by the receivers. He exchanges goods and services; he does not do compulsory labor and does not pay tribute. He is certainly not independent. He depends on the other members of society. But this dependence is mutual. The buyer depends on the seller and the seller on the buyer…. There is no kind of freedom and liberty other than the kind which the market economy brings about….

Government is in the last resort the employment of armed men, of policemen, gendarmes, soldiers, prison guards, and hangmen. The essential feature of government is the enforcement of its decrees by beating, killing, and imprisoning. Those who are asking for more government interference are asking ultimately for more compulsion and less freedom.

Seventy-five years may have passed since Ludwig von Mises’s Human Action was published. Yet, the logic of human action and the workings of the market economy are no different now than when Mises enunciated them in his treatise. Nor are the impossibilities and dangers from various forms of government planning and intervention any different today than in 1949.

Indeed, in the midst of the current collectivist counterrevolution against freedom in all its facets —political, cultural and social, as well as economic — the lessons to be learned from within the pages of Human Action have never been more important. It remains one of the timeliest classics of the last 100 years.

The Liberal Ideal for Peace and Against War

By Richard Ebeling

Originally published on September 6, 2024 for The Future of Freedom Foundation

Wars, conquest, mass killings, occupation, and plunder have plagued the world for all of recorded history. Primitive tribes fighting over waterholes and hunting grounds. Kings and princes claiming divine right to rule over all those they conquer and impose their violent will upon. Nation-states asserting rights and claims to lands and peoples based on racial, ethnic, linguistic, or cultural assertions of historical or mythical roots over various geographical areas. This is the history of mankind.

Over most of human history, periods of peace have been brief respites between renewed warfare between those possessing political power and the military capacities to initiate and fight them. Wars, conquests, death, and destruction have affected every part of the globe. Economist and historian Thomas Sowell explained in Conquests and Cultures(1999):

At one period of history or another, conquest has encompassed virtually all peoples, either as conquerors or as victims, and the consequences have been far-ranging as well…. Some conquests have been followed by systematic exterminations of the vanquished, as in Rome’s conquest of Carthage. Nor have such draconian policies been limited to major conquerors of historic dimension. The massacres of the Tutsi by the Hutu, and vice versa, in late twentieth century Africa and “ethnic cleansing” in the Balkan wars of the same era clearly show that it does not take a great power to create great human tragedies….

Spontaneous atrocities and deliberate systematic terror have long marked the path of the conqueror. The Mongol hordes who swept across vast reaches of Central Asia, Eastern Europe, and the Middle East cultivated an image of ruthless barbarities, as calculated strategy to demoralize future victims…. Emperor Basil II of the Byzantine Empire in the eleventh century ordered the blinding of 99 of every 100 Bulgarian captives, leaving each 100th man with only one eye to lead the others back home, so to provide graphic evidence of the emperor’s treatment of his enemies….

Twentieth-century conquests have been equally hideous. The Japanese conquest of the Chinese capital of Nanking in 1937 was followed by an orgy of rapes of thousands of women living there, the use of Chinese soldiers and civilians for bayonet practice, and a general wanton slaughter of civilians…. Their allies, the Nazis in Germany, set new lows for brutality and dehumanization, of which the Holocaust against the Jews was only the worst example.

Successes and failures in trying to restrain war

Mankind’s escape from war and violent conflict has been a difficult, discontinuous, and disheartening process. Over the ages, there have been attempts to reduce the frequency or the effects of war. For example, in the eleventh century, the ruin and destruction in parts of France were so severe due to wars between members of the nobility and their paid armies that a group of Catholic bishops declared the Truce of God in 1041, which attempted to forbid armed conflicts from Thursday to Monday. While it remained in force, it raised the cost of conflict, since the nobility had to pay a week of wages to soldiers who could only fight on their behalf two days out of the week.

In the fifteenth century, it became more common for kings and princes to employ professional soldiers, the advantage of which was that their costs of hire only lasted as long as the particular campaigns for which they were being paid. The incentives of both officers and ordinary soldiers hired was to minimize the likelihood of death or injury. As the British historian Thomas Babington Macaulay (1800–1859) argued, “It became left to the conduct of men who neither loved whom they defended nor hated those whom they opposed. Every man came into the field impressed with the knowledge that, in a few days, he might be taking the pay of the power against which he was them employed.” Thus, wars became games of maneuver: advances and retreats, with almost bloodless victories and capitulations, in which the generals of opposing sides sometimes dined together before the next day’s combat. The residents of towns and villages would watch from surrounding hills the war games in the fields below them.

However, for a variety of reasons, greater savagery returned to war in Europe in the sixteenth and seventeenth centuries, with such “rules of war” set aside. Towns were destroyed to the ground, populations were exterminated, and starvation was frequent in combat and surrounding areas. This was especially the case during the Thirty Years War (1618–1648), which combined monarchical political ambitions with the religious fanaticism of the conflict between Catholics and Protestants.

But with the Age of Reason and the Enlightenment in the eighteenth century, the idea of rules of war once again returned. As F. J. P. Veale explained in Advance to Barbarism (1948), it was increasingly frowned upon to act without reason and forethought based on emotion and thoughtlessness. Irrational destruction or thoughtless taking of life seemed inconsistent with the modern “enlightened” understanding of the time. One of the reasons the British officers often so despised the American revolutionaries was that rather than come out in military formation and face their British counterparts like honorable men by the rules of set battles, the colonists would retreat into the forests and shoot the marching British Redcoats from hidden positions. For the British, the Americans were cowards who fought like savages.

The French Revolution and total war

The return to increased brutality and the new notion of “total war” emerged out of the French Revolution. Under the monarchies of Europe, wars were the personal affairs of kings and princes; anyone fighting out of either loyalty or for pay was doing so in the service of one man — he who wore the crown and claimed ownership and personal possession of all lands, livestock, and subjects under his royal authority. This changed with the French Revolution of July 1789 and then with the beheading of Lous XVI, the king of France, in January 1793. When a messenger arrived at the eastern frontier of France to inform the French military forces facing the armies of European monarchs opposing the Revolution that the king was dead, an officer asked, “Then who are we fighting for?” The reply was, “You are fighting for the nation, for the people.”

When the collective nation replaced the single figure of the king, every citizen was seen as obligated to serve and sacrifice for “the common interest of the people as a whole.” It was reflected in the imposition of universal conscription of all the people of France in defense of the Revolution. Said the French revolutionary, Bertrand Barère (1755–1841), in 1794:

Some owe [France] their industry, others their fortune, some their advice, others their arms, all owe her their blood…. The young men will fight; the married men will forge arms, transport baggage and artillery, and provide subsistence; the women will work at the soldiers’ clothing, making tents, and become nurses in the hospitals for the wounded; the children will make lint out of linen; and the old men, again performing the mission they had among the ancients, will be carried to the public squares, there to enflame the courage of the young warriors and propagate the hatred of kings and the unity of the Republic.

Barère added that such forced coercion of all for the national interest included the nationalization of the children of the country: “The principles that ought to guide parents are that children belong to the general family, to the Republic, before they belong to particular families. The spirit of private families must disappear when the great family calls. You are born for the Republic and not for the pride or despotism of families.”

Europe endured 25 years of war from 1792 to 1815, until the final defeat of Napoleon. It represented what was, in fact, the real First World War, given its reach and destruction. British historian Robert Mackenzie (1823–1881) explained in The 19th Century: A History (1882):

At the opening of the Nineteenth Century all Europe was occupied with war. The European people … were withdrawn from the occupations of peace, and maintained at enormous cost, expressly to harm their fellow men. The interests of people withered in the storm; the energies of all nations, the fruits of all industries were poured forth in the effort to destroy. From the utmost North to the shores of the Mediterranean, from the confines of Asia to the Atlantic, men toiled to burn each other’s cities, to waste each other’s fields, to destroy each other’s lives. In some lands there was heard the shout of victory, in some the wail of defeat. In all the lands the ruinous waste of war had produced bitter poverty; grief and fear were in every home…. [The war was] so prolonged that before the close men were fighting in the quarrel who had been unborn when it broke out.

Classical liberalism and individual rights and freedom

With the end to this First World War of 1792 to 1815, new ideas gained hold of people’s minds, ideas that had been germinating beneath the surface of war and destruction. These ideas were those of what we now call classical liberalism and economic liberty. New ideals and appeals for reform and change emerged. First among them, originating in both the American Declaration of Independence in 1776 and the original spirit of the French Revolution in its Declaration of Rights of 1789, was the idea of the natural rights of each and every individual to their life, liberty, and honestly acquired property. Government was to protect and not violate or oppress the rights of the individual under systems of limiting constitutions and unbiased and impartial rule of law.

Resulting from this founding philosophical and political principle came the call for the end to human slavery. All human beings were equal in their universal rights as individuals, regardless of where or who they were. Slavery was the most blatant instance of a violation of the rights and the dignity of the individual human being. Complementary to this was an end to any other inequalities before the law in the form of legal discrimination or bias against anyone due to his religion or ethnicity. One instance of this was the liberation over several decades of European Jews who had long suffered under legal restrictions and economic interventions that prevented Jews from open and impartial participation in social life. All individuals, in other words, should be recognized and protected in their civil liberties of freedom speech and religion and peaceful association, including giving testimony in courts of law even if they were not Christians giving oath on the Bible.

Fundamental to these campaigns for liberty was the case made by classical liberals and the classical economists for freedom of enterprise, commerce, and trade. It was exemplified in Adam Smith’s call for a “system of natural liberty” under which everyone would have the personal freedom to enter into any trade or occupation and peacefully compete for consumer business by offering new, better, and less expense goods and services in free
exchange with their neighbors across the street or around the world. The primary role of government, through domestic police, courts of law, and national defense, was to secure every citizen in their individual rights from the violence and fraud of others.

Restraining conflict and Francis Lieber’s rules of war

One other nineteenth-century classical-liberal campaign was for the end to wars and, when they did occur, to limit their destruction and harm to noncombatants. For instance, British economist James Mill (1773–1836), the father of John Stuart Mill, vehemently argued in his Commerce Defended (1808):

To what baneful quarter, then, are we to look for the cause of the stagnation and misery which appear so general in human affairs? War! is the answer. There is no other cause. This is the pestilential wind which blasts the prosperity of nations. This is the devouring fiend which eats up the precious treasure of national economy, the foundation of national improvement, and national happiness…. In every country, therefore, where industry is free, and where men are secure in the enjoyment of what they acquire, the greatest improvement which the government can possibly receive is a steady and enlightened aversion to war.

One especially notable contribution to this campaign against the cruelty of war was made by the German-American Francis Lieber (1798–1872). Born in Berlin and barely 17, he fought in the Prussian Army against Napoleon in the Battle of Waterloo and was severely wounded on the field of battle. Immigrating to Boston in 1827, he became the first editor of the Encyclopedia Americana in 1829. He taught at the University of South Carolina in Columbia from 1836 to 1856, during which time he wrote several important works on individual liberty and civil government, in particular Manuel of Political Ethics (1838) and Civil Liberty and Self-Government (1853). He taught at Columbia University in New York City from 1856 to 1865, with the title of the first professor of political science in the United States. (See my article “Francis Lieber’s America and the Politics of Today,” Future of Freedom, November 2020.)

During the American Civil War, Lieber was asked by the Lincoln administration to prepare the first modern guidebook for the rules of war, Instructions for the Government of Armies of the United States in the Field (1863). War was a cruel and harsh business in which death and destruction was inescapable for the combating armies and for civilians in the arenas of conflict. But Lieber insisted that in modern civilization, even wars needed to be tamed by rules toward the enemy and civilians caught in the crossfires. Said Lieber:

Military necessity does not admit of cruelty, that is, the infliction of suffering for the sake of suffering or for revenge, nor of maiming or wounding except in fight, nor of torture to extort confessions. It does not admit of poison in any way, nor the wanton devastation of a district … and in general, military necessity does not include any act of hostility which makes the return to peace unnecessarily difficult….

Commanders, whenever admissible, inform the enemy of their intention to bombard a place, so the non-combatants, especially the women and children, may be removed before the bombardment commences….

Public war is a state of armed hostility between sovereign nations or governments…. Nevertheless, as civilization has advanced during the last centuries, so has likewise steadily advanced, especially in war on land, the distinction between the private individual belonging to a hostile country and the hostile country itself, with its men in arms. The principle has been more and more acknowledged that the unarmed citizen is to be spared in person, property, and honor as much as the exigencies of war will permit. Private citizens are no longer murdered, enslaved, or carried off to distant parts, and the inoffensive individual is as little disturbed in his private relations as the commander of the hostile troops can afford to grant in the overruling demands of a vigorous war….

In modern regular wars of the Europeans and their descendants in other portions of the globe, protection of the inoffensive citizen of the hostile country is the rule; privation and disturbance of private relations is the exception…. The law of war imposes many limitations and restrictions on principles of justice, faith, and honor….

Humane treatment even in the midst of war

In his Instructions for the rules of war, Lieber went on to state the ethics and rightfulness of respect for and nonviolation of schools, hospitals, churches, museums, universities, and other institutions of scientific pursuit. He also argued that if a free state was at war with a slave state, then the capture of any slaves should bring about their immediate entitlement “to the rights and privileges of a freeman.” In addition, “all destruction of property not commanded by an authorized officer, all robbery, all pillage or sacking, even after taking a place by main force, all rape, wounding, maiming, or killing of such inhabitants, are prohibited under the penalty of death, or such other severe punishment as may seem adequate for the gravity of the offence.”

After defining the meaning of a belligerent nation and its armed and uniformed military forces in terms of lawful combat and use of force in battle, Lieber also defined the rights of prisoners of war to be protected from cruelty, physical harm, torture, or theft of personal property of most sorts. They are to be fed and clothed and housed in a manner consistent with the circumstances but are not to be deprived of such as an act of revenge or cruelty.

Lieber also designated the meaning and the treatment for escapees, spies, abuses of flags of truce, and a wide variety of other circumstances and actions related to the conditions of war. This included not viewing as belligerent agents all medical doctors, pharmacists, nurses, and those doing charitable work in the fields of combat as long as they were not clearly serving the war ends of the opposing army in their conduct. What stands out is the attempt, guided by the liberal ideas and ideal of the individual separate from the state, and therefore the distinction between soldier and civilian, to minimize the hardships and tragedies of combat, given the inevitabilities of death and destruction once governments go to war with each other.

Underlying Lieber’s rules of war was, again, the liberal idea that the normal and desired condition of man is peace and mutually beneficial intercourse among those who for a time were at war with each other. As he expressed it, “Peace is [the] normal condition; war is the exception. The ultimate object of all modern war is the renewed state of peace.” Hence, the rules of war are seen as having two objectives: to diminish as much as possible the destructiveness and inhumanity of violent conflict and to limit the bitterness and anger in the wake of wars so men may return to the normal state of peaceful association and the mutual benefits of production and trade.

It is not surprising that Lieber was also the author of Essays on Property and Labor (1847) and Notes on the Fallacies of American Protectionism (1870), or that he wrote an introduction for an American translation of Frederic Bastiat’s Sophisms of the Protective Policy (1848). A liberal campaign for humanity even in war was a complement to a case for private enterprise, free competition, freedom of trade, and respect for honestly acquired and applied property and the liberty of human labor.

Francis Lieber’s Instructions for the Government of Armies of the United States in the Field became the inspiration for and the outlines of what later in the nineteenth century became the Hague Conventions on the rules of war, the treatment of prisoners, and the respect for the rights and property of non-combatants, along with restrictions on the means and methods of war on the battlefield. This included his argument for international arbitration of governmental disputes in place of war: “International arbitration, freely resorted to by powerful governments, conscious of their complete independence and self-sustaining sovereignty, is one of the foremost characteristics of advancing civilization — of the substitution of reason, fairness, and submission to justice, for defying power or revengeful irritation,” said Lieber.

The failure of the liberal campaign to end war

The classical-liberal campaign for peace through the ending and mitigating of the effects of war were, unfortunately, not fulfilled in the second half of the nineteenth century. Wars in Europe still occurred, though, admittedly, they were usually short in duration and minimally destructive. What was a dangerous harbinger of things to come were the growing armaments races among the “great powers” of Europe, with every new technological innovation requiring new military expenditures on more and improved instruments of death and destruction. Classical liberals in the latter part of the nineteenth century lamented the costs and warlike spirit behind the expansion of the tools of war. They also criticized their use in the rush for imperialist conquests, especially in Africa.

Tragically, the twentieth century saw the end of the classical-liberal dream and hope of a peaceful world. The First World War (1914–1918) cost the lives of at least 20 million combatants and civilians and the use of poison gases on the Western front by both sides in the conflict. The illiberal ideologies of the interwar period of the 1920s and 1930s resulted in totalitarian systems of planning, the drive for national self-sufficiency through protectionism, and the belief that national prosperity was winnable through war. This culminated, of course, in the Second World War (1939–1945), with an estimated loss of 50 million lives around the globe.

If the horrors of war were not already enough, the American dropping of the atomic bombs on Japan in August 1945 demonstrated the potential of destroying entire national populations in a matter of minutes, with those not immediately killed facing the agonies of radiation poisoning. The world almost crossed this threshold during the Cuban Missile Crisis of 1962, which, fortunately, the United States and the Soviet Union stepped back from.

Now in the twenty-first century, the breakdown of the liberal ideas and partial practices of the rules of war continues. In the new era of drone wars, killing becomes a reality video game, whether practiced by the United States in various corners of the world under the name of “unfortunate collateral damage,” in defense of the American empire, or in the targeting of civilian homes, schools, hospitals and infrastructure to undermine and weaken whole populations, as used by Russia in its war against Ukraine. The humane treatment of prisoners of war and noncombatants disappeared in the blackhole of America’s Guantanamo detention camps during the Afghan war and in the humiliation and torture of captured soldiers inside the prison walls of Abu Ghraib in Iraq. (See my article, “The Dangerous Pursuit of Empire: Russia, China, and the United States,” Future of Freedom, July 2023.)

The liberal ideal of a free and peaceful world without war

Peace, prosperity, and freedom can only be maintained and restored with a return to those ideas and ideals of nineteenth-century classical liberalism — ideas and ideals of individual rights and liberty, respect for private property, and unhampered voluntary and peaceful association of people within countries and across borders around the world. As Austrian economist Ludwig von Mises (1881–1973) explained 70 years ago in Omnipotent Government: The Rise of the Total State and Total War (1944):

Within a world of free trade and [limited] democracy there are no incentives for war and conquest. In such a world it is of no concern whether a nation’s sovereignty stretches over a larger or a smaller territory. Its citizens cannot derive any advantage from the annexation of a province….

In this liberal world, or liberal part of the world, there is private property in the means of production. The working of the market is not hampered by government interference. There are no trade barriers; men can live and work where they want. Frontiers are drawn on the maps, but they do not hinder the migration of men and the shipping of commodities. Natives do not have rights that are denied to aliens. Governments and their servants restrict their activities to the protection of life, health, and property against fraudulent or violent aggression. They do not discriminate against foreigners. The courts are independent and effectively protect everybody against the encroachments of officialdom. Everyone is permitted to say, to write, and to print what he likes. Education is not subject to government interference. Governments are like night-watchmen who the citizens have entrusted with the task of handling the police power….

In such a world it makes no difference where the frontiers of a country are drawn. Nobody has a material interest in enlarging the territory of the state in which he lives; nobody suffers loss if a part of this area is separated from the state. It is also immaterial whether all parts of the state’s territory are in direct geographical connection, or whether they are separated by a piece of land belonging to another state. It is of no economic consequence whether the country has a frontage on the ocean or not. It such a world the people of every village or district could decide by plebiscite to which they wanted to belong. There would be no more wars because there would be no incentive for aggression. War would not pay. Armies and navies would be superfluous. Policemen would suffice for the fight against crime. In such a world the state is not a metaphysical entity but simply the producer of security and peace…. The citizen’s sleep is not disturbed, bombs do not destroy his home, and if somebody knocks at his door late at night it is certainly neither the Gestapo nor the [KGB].

This is the world that all friends of freedom, peace, and prosperity should view as their ideal and their goal, toward which all their efforts should be ultimately directed.