Ludwig von Mises and the “Critical Race Theory” of neoliberalism

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Neoliberalism’s Fathers: Mises, Hayek and Friedman

Few discoveries are more irritating than those which expose the pedigree of ideas. —Lord Acton[xxiv]

Ludwig von Mises and the “Critical Race Theory” of neoliberalism

To say that Ludwig von Mises and F.A. Hayek were both traumatized and influenced by their respective brushes with Nazism would be an understatement.

Mises suffered the indignity of Hitler’s gestapo rummaging through his apartment in March of 1938, seizing 21 boxes of his papers and taking over his apartment. Two years later, Mises fled to the United States, where, ironically, he advocated many of Hitler’s racial ideas and even integrated them into his economic ideology.

“It must be emphasized,” he wrote, “that the destiny of modern civilization as developed by the white peoples in the last two hundred years is inseparably linked with the fate of economic science.”[xxv]

He thought Hitler was a passing fad and wrote that because of the racial composition of Germany, “Fascists carry on their work among nations in which the intellectual and moral heritage of some thousands of years of civilization cannot be destroyed at one blow, and not among the barbarian [Slavic and Asiatic} peoples on both sides of the Urals, whose relationship to civilization has never been any other than that of marauding denizens of forest and desert accustomed to engage, from time to time, in predatory raids on civilized lands in the hunt for booty.”[xxvi]

The excesses of Hitler, Mises believed, were merely an understandable response to the horrors of Soviet Communism committed by the inferior Slavic peoples and would, in Germany, eventually moderate into a free-market system.

“The deeds of the Fascists and of other parties corresponding to them,” he wrote, “were emotional reflex actions evoked by indignation at the deeds of the Bolsheviks and Communists. As soon as the first flush of anger had passed, their policy took a more moderate course and will probably become even more so with the passage of time.”[xxvii]

Mises preached that it was the obligation of the superior races of Europe to, essentially, civilize inferior races all around the world, while retaining their own racial purity. The intelligence and abilities of people weren’t found in how they grew up; it was all in their genes. We’re born how we are, he believed, not made that way by our life’s experiences.

“The influence of environment is estimated to be low:” he wrote, “mixture of races creates bastards, in whom the good hereditary qualities of the nobler races deteriorate or are lost. … [C]ertain influences, operating over a long period, have bred one race or several, with specially favourable qualities, and the members of these races had by means of these advantages obtained so long a lead that members of other races could not overtake them within a limited time.”

This not only justified the white civilized people of the world helping out the inferior people, but also putting them to work!

“We see at once that it [race theory] contains nothing directly inimical to the doctrine of the division of labour,” he wrote. “The two are quite compatible. It may be assumed that races do differ in intelligence and will power, and that, this being so, they are very unequal in their ability to form society, and further that the better races distinguish themselves precisely by their special aptitude for strengthening social co-operation.”

As if he’d just said or discovered something particularly profound, Mises’ next two sentences put a punctuation mark on his justification for white neoliberal imperialism.

“This hypothesis,” he wrote, “throws light on various aspects of social evolution not otherwise easily comprehensible. It enables us to explain the development and regression of the social division of labour and the flowering and decline of civilizations.”

Thus, “free trade” would be a blessing to the world even if it involved exploiting what he considered inferior people.

“When the race theory combats the natural law postulate of the equality and equal rights of all men, it does not affect the free trade argument… In the race theory there are no arguments to refute free trade theory as to the effects of the expanding social division of labour. It may be admitted that the races differ in talent and character and that there is no hope of ever seeing those differences resolved.”

Simply acknowledging this simple reality, Mises wrote, would liberate the world via neoliberalism while raising up the “less capable” races who were now given the privilege of laboring for the “more capable” races and thus learning techniques that would increase their productivity.

“Still,” Mises wrote, “free trade theory shows that even the more capable races derive an advantage from associating with the less capable and that social co-operation brings them the advantage of higher productivity in the total labour process.”[xxviii]

Mises theory that neoliberal “free trade” would conquer the world and the “more capable” races would, like the statue Colossus, ride astride that one world market, applied both to Black and Asian people. And it would be their salvation!

“If the Asiatics and Africans,” he wrote, “really enter into the orbit of Western civilization, they will have to adopt the market economy without reservations.”[xxix] Hitler and the men who ransacked Mises’ apartment would have smiled;