Ludwig von Mises: " The “statification” of life and of the economy leads with necessity to the struggle of nations "

Why Ludwig von Mises Advocated for Liberal Nationalism Following WWI

by Jörg Guido Hülsmann

In his criticism of imperialist policies in the service of socialism, labor-unionism, and the socialist war economy Ludwig von Mises could restate many conventional arguments. He faced an unprecedented task in confronting the claim that imperialism can enhance the welfare of a nation. His pioneering analysis brilliantly confirmed Carl Menger’s insight that methodological individualism is able to analyze even large collective phenomena.

The main thesis in the first chapter of Nation, State, and Economy is that governments are incapable of improving the condition of the nations they rule. The reason is that the origin, emergence, growth, flower, and decline of nations are subject to natural laws. The operation of these laws can be modified by government power but not abrogated, and any alteration will play out to the detriment of the nation. Mises proved his case by first analyzing nations in a free society and then turning to examine the impact of government power on their evolution. His practical conclusions called for the denationalization of the nation, or more precisely, for keeping government intervention as far as possible out of the life of language communities.

Following Scherer, Grimm, and Otto Bauer, Mises defined nations as language communities. He stressed that as far as democratic regimes are concerned, this definition is more than a mere convention. In democracies, communication—and thus language—is the primary political means. Language communities are therefore of critical political importance. What were the natural laws determining the rise and fall of language communities? Mises considered various objective factors determining their evolution.  But his decisive considerations start from the fact that the membership in a language community is not something unalterable. Each human person can decide to leave his former nation and join another. In a free society, Mises stressed, nations would be purely voluntary associations:

No people and no part of a people shall be held against its will in a political association that it does not want. The totality of freedom-minded persons who are intent on forming a state appears as the political nation; patrie, Vaterlandbecomes the designation of the country they inhabit; patriot becomes a synonym of free-minded. 

Liberalism knows no conquests, no annexations; just as it is indifferent towards the state itself, so the problem of the size of the state is unimportant to it. It forces no one against his will into the structure of the state. Whoever wants to emigrate is not held back. When a part of the people of the state wants to drop out of the union, liberalism does not hinder it from doing so. Colonies that want to become independent need only do so. The nation as an organic entity can be neither increased nor reduced by changes in states; the world as a whole can neither win nor lose from them.

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