Home > Uncategorized > A note to Tom Woods:Mises & property (and commons & IP): Is libertarianism now "merely a veiled apologia for capital”?

A note to Tom Woods:Mises & property (and commons & IP): Is libertarianism now "merely a veiled apologia for capital”?

I refer to Tom Wood’s post on Mises’s Vision of the Free Society, regarding Ludwig von Mises‘s book, Liberalism.

I left the following comment (emphasis added):

TokyoTom July 21, 2010 at 4:11 am


I’ll need to take a look at this book; what can be covered in a book review is obviously limited.

However, I would note a few thoughts:

1. Even now, “to champion property is to invite the accusation that liberalism is merely a veiled apologia for capital”, as you note, and “The enemies of liberalism have branded it as the party of the special interests of the capitalists,” as Mises observed. This is the case not simply because people then as now do not understand how a market society functions, but for the very good reason that statism is running rampant, allowing the direct owners of capital and executives to cream profits while shifting risks to all of society.

This is undeniably the case with our financial sector, and also with the exploration and development of fossil fuel and mineral resources on land (and offshore) “owned” by government but leased to corporations. Further examples of the use of property by corporations in ways that benefit owners/executives but do identifiable harm to others are easily found; this is often coupled with the statism enabled by the growth of corporations, which growth was itself fuelled by the state grant of limited liability to the shareholders of corporations (limiting recovery not only by debtors but also by persons involuntarily injured by acts of corporations or their agents).

Unless Austrians are content to leave the criticisms of (and policy responses to) corporate excesses to socialists, Marxists and Keynesians – and to be dismissed as defenders of corporate statism – it may behoove us to raise our own voices more forcefully.

In this connection, I would note that Mises himself noted that property is imperfectly defined and leads to problems of external costs:

“Property rights as they are circumscribed by laws and protected by courts and the police, are the outgrowth of an age-long evolution. … The legal concepts of property do not fully take account of the social function of private property. There are certain inadequacies and incongruities which are reflected in the determination of the market phenomena. ….

“It is true that where a considerable part of the costs incurred are external costs from the point of view of the acting individuals or firms, the economic calculation established by them is manifestly defective and their results deceptive. But this is not the outcome of alleged deficiencies inherent in the system of private ownership of the means of production. It is on the contrary a consequence of loopholes left in this system. It could be removed by a reform of the laws concerning liability for damages inflicted and by rescinding the institutional barriers preventing the full operation of private ownership.”

2. Yes, private property greatly advances social cooperation (and may even be “the central pillar of modern civilization”), but private property is never perfect – and is supported by an array of collective institutions which order people’s market interactions – and there are many important resources that are not privately owned but which are open-access resources that must be managed collectively. I am not sure to what degree Mises has addressed such common resources, but they (and the effort to develop effective institutions to manage them) can be quite important, as was recognized by the award last year of the Nobel Prize in Economics to Elinor Ostrom and Oliver Williamson:



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