Theory and History. by Ludwig von MisesReview by: Asa BriggsThe Economic Journal, Vol. 69, No. 276 (Dec., 1959), pp. 770-772Published by: Wiley on behalf of the Royal Economic SocietyStable URL: http://www.jstor.org/stable/2227673 .

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770 THE ECONOMIC JOURNAL [DEC.

importance. The note on which one must end is that from now on anyone interested in the theory of public finance can simply be told, " It's all in Musgrave."

A. R. PREST Christ's College,

Cambridge.

Theory and History. By LUDWIG VON MISES. (London: Jonathan Cape, 1958. Pp. ix + 384. 30s.)

THis new volume by Professor von Mises has the same texture and tone as his earlier books on Human Action and Socialism. There are frequent cross- references, and both the methods of argument and the conclusions are per- fectly consistent. The defence of the liberal market economy and of economics and " praxeology " as wertfrei intellectual studies with " unique epistemological character " will be familiar to all his readers. The defence, of course, is most frequently a scathing attack. Never can the market economy have been handled so stridently or the history of ideas so brusquely. The book is littered with adjectives such as " absurd," " preposterous," and

pernicious," and nouns such as " pseudo-economics," " fantasy " and " slavery." Professor von Mises attacks Marx for refusing to argue with his opponents and assuming that it was sufficient to unmask their bourgeois background and thereby the necessarily " idealogical " character of their doctrines. Nonetheless, he often follows this procedure himself. He assumes that all who disagree with his version of liberal economics are " driven by an idiosyncratic abhorrence of the market economy and its political corollary " (p. 242), that all recent socialists base their hopes not " upon the power of their arguments but upon the resentment, envy and hatred of the masses " (p. 65), that Marxists " cling to historical materialism and stubbornly refuse to listen to its critics because they want socialism for emotional reasons " (p. 158), and that people who " support policies that aim at the substitution of planning by an authority for autonomous planning by each individual " are " longing for slavery " (p. 376). In a more restricted context he claims that " it is only the passionate pro-socialist zeal of mathe- matical pseudo-economists that transforms a purely analytical tool of logical economics into a utopian image of the good and most desirable state of affairs " (p. 367).

It is impossible to dismiss comments of this kind as disagreeable tricks of style. There are other comments which betray a tendency to sweeping generalisation as well as passionate feeling. " Marx misrepresented the operation of the capitalist system in every respect" (p. 117). "What prompted those who suggested the substitution of the social sciences for the sciences of human action was, of course, a definite political program "

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1959] VON MISES: THEORY AND HISTORY 771

(p. 259). "The religiousness of these sincere believers had nothing in com- mon with the established system of devotion " (p. 339). Remarks of this kind suggest not liberal openness of mind but a refusal to leave familiar grooves of thought or, to use Professor von Mises' more technical language, too uncritical reliance on " thymological" explanations for shifts and diversities in idealogies. Whatever might be said about the differences between his approach to economics and the approach of economists who do not agree with him, it is clear that there would be an even bigger gulf be- tween what he considers to be " thymological experience " and what other people would consider to be such.

Four points of more particular criticism raise important general issues. First, Professor von Mises, who disposes of many arguments, does not dispose of the doubts, insights and suggestions about value theory which made Gunnar Myrdal's recent collection of essays so illuminating. He writes too confidently about " ends " and " means " in his first few pages, and repeats the word " wertfrei" frequently in the remaining pages. It is neither malice nor evil intention which has made people doubt his version of value theory but genuine intellectual uneasiness. Second, as a historian Professor von Mises is less convincing than he is as a writer about history. He makes many extremely suggestive general remarks about history and the methods historians should use, but he grossly over-simplifies both the actual history of ideas and the history of institutions. It is not true to say, for instance, that " no proletarian or son of a proletarian contributed any substantial idea to the socialist idealogy " (p. 121) or that "workers were never enthusiastic about socialism." Interesting historical questions are side-tracked in this kind of dogmatic account of what happened in the past. Third, in his account of the operation of the economic system at the present time he does not examine carefully either legitimate discussions of " weaknesses " in capitalism or such interesting phenomena as rates of growth in socialist countries. Of the capitalists and entrepreneurs of a market economy, whose role has changed in different periods of economic history, he writes generally " they acquire and enlarge their property through the services they have rendered to the consumers, and they can retain it only by serving daily again in the best possible way" (p. 116). No attempt is made to distinguish between the theory of a market economy and the actual working of " free economies in practice both in the past and at the present time. Fourth, he uses terms which provide props for his argument but never receive careful enough attention. The most important of these terms is " masses." He rightly accuses Marx of not having clearly defined what he meant by " class," but he tends to use the word " masses " himself as a very general term which some of his readers will query. There is a considerable truth in a comment by Mr. Raymond Williams in his Culture and Society that " there are in fact no masses; there are only ways of seeing people as masses." Indeed, Mr. Williams' book, which deals with the history of the use of

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772 THE ECONOMIC JOURNAI [DEC.

words in changing social contexts, brings out clearly why the kind of argu- ments advanced by Professor von Mises-many of them echo (often elo- quently) Qld controversies-have not received the assent of a considerable number of intelligent people over the last hundred and fifty years.

It is a tribute, of course, to Professor von Mises that his trenchant exposi- tion provokes vigorous dissent. How useful argument at this level really is must, however, be open to question. One reason why Professor von Mises' eloquence will not convince all his readers is not that they are stubbornly cocksure but, to use a phrase of Gunnar Myrdal, that they are " more modest " than he. They will doubt whether what the blurb of Theory and History calls the author's " frequent tilts at other experts " will generate more light than heat.

ASA BRIGGS University of Leeds.

The British Budgetary System. By SIR HERBERT BRITTAIN. (London: Allen & Unwin, 1959. Pp. 320. 25s.)

IT is hardly accidental that it is quarter of a century since the last edition of a comprehensive account of the British budgetary system appeared, bearing in mind the preoccupation of writers in public finance with the more fashionable and possibly more exciting study of the use of the budget as a stabiliser and redistributor of income. However, this very change in the policy uses of the budget has brought into being major alterations in the structure of the system of public finance, notably in the financial relations between central government, local government and nationalised industries. Sir Herbert Brittain's study is very welcome, all the more so because it is written with the inside knowledge of a former senior administrator of the Treasury.

There are two noteworthy features of this book. We would expect from Sir Herbert an authoritative account of the whole budget " cycle " from the preparation of estimates to the deliberations of the Public Accounts Com- mittee. What is particularly useful in his survey is the documentation. This means that the book is more than a handbook for students and civil servants, but also a starting-point for detailed research into budgetary matters. The second feature is that the budget is explicitly regarded as an instrument of economic policy. It is obviously impossible to expect a book of this kind to preface description of our financial administration with a complete treatise on social accounting and the theory of fiscal policy. Sir Herbert has managed to summarise the rationale of fiscal policy in a few pages in Chapters II and III very well indeed, and as a result, the more sophisticated reader, at least, will discern more clearly the links between theory and policy.

One regrets that Sir Herbert has chosen to avoid controversy. Hilton

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