Saturday, March 29, 2014

Wall Street Journal Quotes Ludwig von Mises

Earlier this week, WSJ in their Notable & Quotable feature quoted the great economist Ludwig von Mises on  the supremacy of consumer interests over producer interests in a free market economy and the absurdity of trying to maintain a certain past structure that supports producer interests.

From Nation, State, and Economy:

One of the great ideas of [classical] liberalism is that it lets the consumer interest alone count and disregards the producer interest. No production is worth maintaining if it is not suited to bring about the cheapest and best supply. No producer is recognized as having a right to oppose any change in the conditions of production because it runs counter to his interest as a producer. The highest goal of all economic activity is the achievement of the best and most abundant satisfaction of wants at the smallest cost. . . .

Preferring the producer interest over the consumer interest, which is characteristic of antiliberalism, means nothing other than striving artificially to maintain conditions of production that have been rendered inefficient by continuing progress. Such a system may seem discussible when the special interests of small groups are protected against the great mass of others, since the privileged party then gains more from his privilege as a producer than he loses on the other hand as a consumer; it becomes absurd when it is raised to a general principle, since then every individual loses infinitely more as a consumer than he may be able to gain as a producer. The victory of the producer interest over the consumer interest means turning away from rational economic organization and impeding all economic progress.


  1. I don't see it that way. When we have a world of producers and consumers, all mouths and no hopes, we neglect the worker, those who, because they do not have the capital to produce nor the wages to consume, are the emptied, used, and abysmal drift of humanity.

    1. Anon 5:48, I don't know what you do for a living, but all my workers make a wage which allows them to consume the goods and services others produce. There is not a one who would consider himself emptied or used.

      They own nice cars and nice clothes, they eat and drink well, they reside in good neighborhoods and many own their own home or condo, they can afford to raise their children comfortably, they purchase all the latest gadgets, many of which are continuously decreasing in price while increasing in functionality.

      The one area in which they're getting screwed is health care, since my company's premiums have risen exponentially over the past four years, causing deductibles and copays to rise while services have been sharply curtailed. I wonder why?

      How can I afford to pay workers well? Because we are continuously improving our productivity, our product quality, and our offerings, which allows us to improve our margins while maintaining our pay scale with annual increases and bonuses simultaneously.

      Please remember that workers are by definition both consumers and producers. The only abysmal drift of humanity are those who cannot--or wiil not--work. For the former there is charity, for the latter, their parents' basement (if they're lucky).

      I can think of no better way to improve the lot of workers than to enforce the primacy of the consumer. There is much in Mises' writing that may be difficult to apprehend at first pass, but this selection is not one. This is his axiomatic insight into a fundamental truth which anyone who has ever sold something, be it a glass of lemonade or a Gulfstream, instinctively grasps. I hope that after further reflection, you can as well.

    2. Chris- check Anon's IP.

      She is the same ignorant fool defending Shwarma Socialist on other posts.

      She has never worked but has enough "self esteem" to tell others how to live.

      Ignorant See You Next Tuesday.

    3. Anon 5:48's comment seems to be founded on an illness common to many contemporary "progressives": a fervent but completely unfounded belief that "the worker" is incapable of managing his own life and situation. "The worker" must be paternalistically looked out for and nurtured by a well-intentioned (but woefully uninformed, and uninterested-in-becoming-informed) pseudo-moralistic busybody who is convinced he/she alone has a monopoly on wisdom, and the world would be a better place if he/she alone could override everyone else's free will and coerce the world into adhering to his/her particular vision of how things should be. Never mind that "the worker" is working voluntarily for agreed upon wages instead of self-employing. No, today's "progressive" knows best.

      Somehow, those espousing the political belief of leaving people respectfully alone, are considered to be the selfish, greedy and uncompassionate ones, while those advocating treating the masses as human livestock to be corralled and exploited for the benefit of megalomanical world-reformers are considered noble and caring. Nothing could be further from the truth.

  2. So let's ban patent protection and stop protecting producer interests. Great quote. Too bad the Koch Machine won't get behind it because it means less money going upwards in their direction.

    1. Re: Jerry Wolfgang,

      -- So let's ban patent protection and stop protecting producer interests. Great quote. --

      Completely agree. It's a great quote and the direct implication is indeed the unsustainability of patents from an economic perspective. You are so clueless, JW, that even when trying to be facetious, you speak the truth unwittingly; instead when arguing your points seriously, your arguments come out flawed and wrong. Please, keep being facetious on purpose - it's the only way you seem to have to communicate ideas successfully.