Executive Summary

Mises comprehensive and influential evaluation of socialism focuses on socialism’s economic inconsistencies but also highlights underlying premises often accepted by both socialists and anti-socialists. In Part I, Mises compares the principles of Socialism and Liberalism/Capitalism.

1. Socialism is a political philosophy that advocates “the socialization of the means of production with its corollary, the centralized control of the whole of production by one social or, more accurately, state organ.” It expands government into the economic sphere, which Liberalism would leave free.
2. The main difference between Liberalism and Socialism is not in the aim, but in the meaning of justice and the means to it. Socialism advocates social justice, which it holds requires transferring the means of production to the collective, represented by the State.
3. While Liberalism protects individuals’ freedom to engage in economic action, Socialism asserts economic rights: “right to the full produce of labor, right to existence, and right to work.”
4. Socialism’s claim to abolish the ownership of the goods is, according to Mises, impossible. To own something is to have it in possession and to be able to use or employ it. With consumption goods, this is necessarily an individual activity.
5. A division of production goods between producer and consumer is possible, but each receives the share “to which he is economically entitled, according to the value of his productive contribution in the yield.” Thus, no common ownership of goods is possible.
6. Mises disagrees with Socialism due to its economic incoherence but more fundamentally ethically. No rights are granted by nature: there is no natural law or social contract. Instead, life necessitates economic action which, in turn, requires peace.
7. Proper law and rights can evolve from unjust origin to institute justice and peace. So even if one could show that “common property was once the basis of land law for all nations and that all private property had arisen through illegal acquisition, one would still be far from ... conclud[ing] from such premises that private property could or should be abolished."

Read Ludwig von Mises’s Socialism here. Summary by Andrei Volkov and Stephen Hicks, 2020.