Economics At The University Level

John A. Quayle blueoval57 at VERIZON.NET
Mon Feb 2 01:16:30 MST 2009

Economic Teaching at the Universities

Daily Article by <>Ludwig von 
Mises | Posted on 1/30/2009

 From <>Planning 
for Freedom. Originally published in The Freeman, April 7, 1952.

A few years ago, a House of Representatives Subcommittee on Publicity and 
Propaganda in the Executive Departments, under the chairmanship of 
Representative Forest A. Harness, investigated federal propaganda 
operations. On one occasion the committee had as a witness a 
government-employed doctor. When asked if his public speeches throughout 
the country presented both sides of the discussion touching compulsory 
national health insurance, this witness answered, "I don't know what you 
mean by both sides."

This naive answer throws light on the state of mind of people who proudly 
call themselves progressive intellectuals. They simply do not imagine that 
any argument could be advanced against the various schemes they are 
suggesting. As they see it, everybody, without asking questions, must 
support every project aiming at more and more government control of all 
aspects of the citizen's life and conduct. They never try to refute the 
objections raised against their doctrines. They prefer, as Mrs. Eleanor 
Roosevelt recently did in her column, to call dishonest those with whom 
they do not agree.

Many eminent citizens hold educational institutions responsible for the 
spread of this bigotry. They sharply criticize the way in which economics, 
philosophy, sociology, history, and political science are taught at most 
American universities and colleges. They blame many teachers for 
indoctrinating their students with the ideas of all-around planning, 
socialism, and communism. Some of those attacked try to deny any 
responsibility. Others, realizing the futility of this mode of defense, cry 
out about "persecution" and infringement of "academic freedom."

Yet what is unsatisfactory with present-day academic conditions ­ not only 
in this country but in most foreign nations ­ is not the fact that many 
teachers are blindly committed to Veblenian, Marxian, and Keynesian 
fallacies, and try to convince their students that no tenable objections 
can be raised against what they call progressive policies; the mischief is 
rather to be seen in the fact that the statements of these teachers are not 
challenged by any criticism in the academic sphere. The pseudoliberals 
monopolize the teaching jobs at many universities. Only men who agree with 
them are appointed as teachers and instructors of the social sciences, and 
only textbooks supporting their ideas are used. The essential question is 
not how to get rid of inept teachers and poor textbooks. It is how to give 
the students an opportunity to hear something about the ideas of economists 
rejecting the tenets of the interventionists, inflationists, socialists, 
and communists.

1. Methods of the "Progressive" Teachers

Let us illustrate the matter by reviewing a recently published book. A 
professor of Harvard University edits, with the support of an advisory 
committee whose members are all, like himself, professors of economics at 
Harvard University, a series of textbooks, the "Economics Handbook Series." 
In this series there was published a volume on socialism. Its author, Paul 
M. Sweezy, opens his preface with the declaration that the book "is written 
from the standpoint of a Socialist." The editor of the series, Professor 
Seymour E. Harris, in his introduction, goes a step further in stating that 
the author's "viewpoint is nearer that of the group which determines Soviet 
policy than the one which now [1949] holds the reins of government in 
Britain." This is a mild description of the fact that the volume is from 
the first to the last page an uncritical eulogy of the Soviet system.

Now it is perfectly legitimate for Dr. Sweezy to write such a book and for 
professors to edit and to publish it. The United States is a free country ­ 
one of the few free countries left in the world ­ and the Constitution and 
its amendments grant to everybody the right to think as he likes and to 
have published in print what he thinks. Sweezy has, in fact, unwittingly 
rendered a great service to the discerning public. For his volume clearly 
shows to every judicious reader conversant with economics that the most 
eminent advocates of socialism are at their wits' end, do not know how to 
advance any plausible argument in favor of their creed, and are utterly at 
a loss to refute any of the serious objections raised against it.

But the book is not designed for perspicacious scholars well acquainted 
with the social sciences. It is, as the editors' introduction emphasizes, 
written for the general reader in order to popularize ideas and especially 
also for use in the classroom. Laymen and students who know nothing or very 
little about the problems involved will draw all their knowledge about 
socialism from it. They lack the familiarity with theories and facts which 
would enable them to form an independent opinion about the various 
doctrines expounded by the author. They will accept all his theses and 
descriptions as incontestable science and wisdom. How could they be so 
presumptuous as to doubt the reliability of a book, written, as the 
introduction says, by an "authority" in the field and sponsored by a 
committee of professors of venerable Harvard!

The shortcoming of the committee is not to be seen in the fact that they 
have published such a book, but in the fact that their series contains only 
this book about socialism. If they had, together with Dr. Sweezy's book, 
published another volume critically analyzing communist ideas and the 
achievements of socialist governments, nobody could blame them for 
disseminating communism. Decency should have impelled them to give the 
critics of socialism and communism the same chance to represent their views 
to the students of universities and colleges as they gave to Dr. Sweezy.

On every page of Dr. Sweezy's book, one finds really amazing statements. 
Thus, in dealing with the problem of civil rights under a socialist regime, 
he simply equates the Soviet constitution with the American constitution. 
Both, he declares, are

generally accepted as the statement of the ideals which ought to guide the 
actions of both the state and the individual citizen. That these ideals are 
not always lived up to ­ either in the Soviet Union or in the United States 
­ is certainly both true and important; but it does not mean that they do 
not exist or that they can be ignored, still less that they can be 
transformed into their opposite.

Leaving aside most of what could be advanced to explode this reasoning, 
there is need to realize that the American constitution is not merely an 
ideal but the valid law of the country. To prevent it from becoming a dead 
letter there is an independent judiciary culminating in the Supreme Court. 
Without such a guardian of law and legality, any law can be and is ignored 
and transformed into its opposite. Did Dr. Sweezy never become aware of 
this nuance? Does he really believe that the millions languishing in Soviet 
prisons and labor camps can invoke habeas corpus?

To say it again, Dr. Sweezy has the right ­ precisely because the American 
Bill of Rights is not merely an ideal, but an enforced law ­ to transform 
every fact into its opposite. But professors who hand out such praise of 
the Soviets to their students without informing them about the opinions of 
the opponents of socialism must not raise the cry of witch-hunt if they are 

Professor Harris, in his introduction, contends that "those who fear undue 
influence of the present volume may be cheered by a forthcoming companion 
volume on capitalism in this series written by one as devoted to private 
enterprise as Dr. Sweezy is to socialism." This volume, written by 
Professor David McCord Wright of the University of Virginia, has been 
published in the meantime. It deals incidentally also with socialism and 
tries to explode some minor socialist fallacies, such as the doctrine of 
the withering away of the state, a doctrine which even the most fanatical 
Soviet authors relegate today to an insignificant position. But it 
certainly cannot be considered a satisfactory substitute, or a substitute 
at all, for a thoroughly critical examination of the whole body of 
socialist and communist ideas, and the lamentable failure of all socialist 

Some of the teachers try to refute the accusations of ideological 
intolerance leveled against their universities and to demonstrate their own 
impartiality by occasionally inviting a dissenting outsider to address 
their students. This is mere eyewash. One hour of sound economics against 
several years of indoctrination of errors! The present writer may quote 
from a letter in which he declined such an invitation:

What makes it impossible for me to present the operation of the market 
economy in a short lecture ­ whether fifty minutes or twice fifty minutes ­ 
is the fact that people, influenced by the prevailing ideas on economic 
problems, are full of erroneous opinions concerning this system. They are 
convinced that economic depressions, mass unemployment, monopoly, 
aggressive imperialism and wars, and the poverty of the greater part of 
mankind, are caused by the unhampered operation of the capitalist mode of 
If a lecturer does not dispel each of these dogmas, the impression left 
with the audience is unsatisfactory. Now, exploding any one of them 
requires much more time than that assigned to me in your program. The 
hearers will think: "He did not refer at all to this" or "He made only a 
few casual remarks about that." My lecture would rather confirm them in 
their misunderstanding of the system
. If it were possible to expound the 
operation of capitalism in one or two short addresses, it would be a waste 
of time to keep the students of economics for several years at the 
universities. It would be difficult to explain why voluminous textbooks 
have to be written about this subject
. It is these reasons that impel me 
reluctantly to decline your kind invitation.

2. The Alleged Impartiality of the Universities

The pseudoprogressive teachers excuse their policy of barring all those 
whom they smear as old-fashioned reactionaries from access to teaching 
positions by calling these men biased.

The reference to bias is quite out of place if the accuser is not in a 
position to demonstrate clearly in what the deficiency of the smeared 
author's doctrine consists. The only thing that matters is whether a 
doctrine is sound or unsound. This is to be established by facts and 
deductive reasoning. If no tenable arguments can be advanced to invalidate 
a theory, it does not in the least detract from its correctness if the 
author is called names. If, on the other hand, the falsity of a doctrine 
has already been clearly demonstrated by an irrefutable chain of reasoning, 
there is no need to call its author biased.

A biographer may try to explain the manifestly exploded errors of the 
person whose life he is writing about by tracing them back to bias. But 
such psychological interpretation is immaterial in discussions concerning 
the correctness or falsity of a theory. Professors who call those with whom 
they disagree biased merely confess their inability to discover any fault 
in their adversaries' theories.

Many "progressive" professors have for some time served in one of the 
various alphabetical government agencies. The tasks entrusted to them in 
the bureaus were, as a rule, ancillary only. They compiled statistics and 
wrote memoranda which their superiors, either politicians or former 
managers of corporations, filed without reading. The professors did not 
instill a scientific spirit into the bureaus. But the bureaus gave them the 
mentality of authoritarianism. They distrust the populace and consider the 
State (with a capital S) as the God-sent guardian of the wretched 
underlings. Only the government is impartial and unbiased. Whoever opposes 
any expansion of governmental powers is, by this token, unmasked as an 
enemy of the commonweal. It is manifest that he "hates" the state.

Now if an economist is opposed to the socialization of industries, he does 
not "hate" the state. He simply declares that the commonwealth is better 
served by private ownership of the means of production than by public 
ownership. Nobody could pretend that experience with nationalized 
enterprises contradicts this opinion.

Another typically bureaucratic prejudice which the professors acquired in 
Washington is to call the attitudes of those opposing government controls 
and the establishment of new offices "negativism." In the light of this 
terminology all that has been achieved by the American individual 
enterprise system is only "negative"; the bureaus alone are "positive."

There is, furthermore, the spurious antithesis "plan or no plan." Only 
totalitarian government planning that reduces the citizens to mere pawns in 
the designs of the bureaucracy is called planning. The plans of the 
individual citizens are simply "no plans." What semantics!

3. How Modern History Is Taught

The progressive intellectual looks upon capitalism as the most ghastly of 
all evils. Mankind, he contends, lived rather happily in the good old days. 
But then, as a British historian said, the Industrial Revolution "fell like 
a war or a plague" on the peoples. The "bourgeoisie" converted plenty into 
scarcity. A few tycoons enjoy all luxuries. But, as Marx himself observed, 
the worker "sinks deeper and deeper" because the bourgeoisie "is 
incompetent to assure an existence to its slave within his slavery."

Still worse are the intellectual and moral effects of the capitalist mode 
of production. There is but one means, the progressive believes, to free 
mankind from the misery and degradation produced by laissez-faire and 
rugged individualism, viz., to adopt central planning, the system with 
which the Russians are successfully experimenting. It is true that the 
results obtained by the Soviets are not yet fully satisfactory. But these 
shortcomings were caused only by the peculiar conditions of Russia. The 
West will avoid the pitfalls of the Russians and will realize the welfare 
state without the merely accidental features that disfigured it in Russia 
and in Hitler's Germany.

Such is the philosophy taught at most present-day schools and propagated by 
novels and plays. It is this doctrine that guides the actions of almost all 
contemporary governments. The American "progressive" feels ashamed of what 
he calls the social backwardness of his country. He considers it a duty of 
the United States to subsidize foreign socialist governments lavishly in 
order to enable them to go on with their ruinous socialist ventures. In his 
eyes, the real enemy of the American people is big business, that is, the 
enterprises which provide the American common man with the highest standard 
of living ever reached in history. He hails every step forward on the road 
toward all-around control of business as progress. He smears all those who 
hint at the pernicious effects of waste, deficit spending, and capital 
decumulation as reactionaries, economic royalists, and Fascists. He never 
mentions the new or improved products which business almost every year 
makes accessible to the masses. But he goes into raptures about the rather 
questionable achievements of the Tennessee Valley Authority, the deficit of 
which is made good out of taxes collected from big business.

The most infatuated expositors of this ideology are to be found in the 
university departments of history, political science, sociology, and 
literature. The professors of these departments enjoy the advantage, in 
referring to economic issues, that they are talking about a subject with 
which they are not familiar at all. This is especially flagrant in the case 
of historians. The way in which the history of the last 200 years has been 
treated is really a scandal. Only recently, eminent scholars have begun to 
unmask the crude fallacies of Lujo Brentano, the Webbs, the Hammonds, 
Tawney, Arnold Toynbee, Elie Halevy, the Beards, and other authors. At the 
last meeting of the Mont Pelerin Society, the occupant of the chair of 
economic history at the London School of Economics, Professor T.S. Ashton, 
presented a paper in which he pointed out that the commonly accepted views 
of the economic developments of the 19th century "are not informed by any 
glimmering of economic sense." The historians tortured the facts when they 
concocted the legend that "the dominant form of organization under 
industrial capitalism, the factory, arose out of the demands, not of 
ordinary people, but of the rich and the rulers."

The truth is that the characteristic feature of capitalism was and is mass 
production for the needs of the masses. Whenever the factory, with its 
methods of mass production by means of power-driven machines, invaded a new 
branch of production, it started with cheap goods for the broad masses. The 
factories turned to the production of more refined and therefore more 
expensive merchandise only at a later stage, when the unprecedented 
improvement which they had caused in the masses' standard of living made it 
reasonable to apply the methods of mass production to better articles as 
well. Big business caters to the needs of the many; it depends exclusively 
upon mass consumption. In his capacity as consumer, the common man is the 
sovereign whose buying or abstention from buying decides the fate of 
entrepreneurial activities. The "proletarian" is the much-talked-about 
customer who is always right.

The most popular method of deprecating capitalism is to make it responsible 
for every condition which is considered unsatisfactory. Tuberculosis and, 
until a few years ago, syphilis, were called diseases of capitalism. The 
destitution of scores of millions in countries like India, which did not 
adopt capitalism, is blamed on capitalism. It is a sad fact that people 
become debilitated in old age and finally die. But this happens not only to 
salesmen but also to employers, and it was no less tragic in the 
precapitalistic ages than it is under capitalism. Prostitution, dipsomania, 
and drug addiction are all called capitalist vices.

Whenever people discuss the alleged misdeeds of the capitalists, a learned 
professor or a sophisticated artist refers to the high income of movie 
stars, boxers, and wrestlers. But who contribute more to these incomes, the 
millionaires or the "proletarians"?

It must be admitted that the worst excesses in this propaganda are not 
committed by professors of economics but by the teachers of the other 
social sciences, by journalists, writers, and sometimes even by ministers. 
But the source from which all the slogans of this hectic fanaticism spring 
is the teachings handed down by the "institutionalist" school of economic 
policies. All these dogmas and fallacies can be ultimately traced back to 
allegedly economic doctrines.

4. The Proscription of Sound Economics

The Marxians, Keynesians, Veblenians, and other "progressives" know very 
well that their doctrines cannot stand any critical analysis. They are 
fully aware of the fact that one representative of sound economics in their 
department would nullify all their teachings. This is why they are so 
anxious to bar every "orthodox" from access to the strongholds of their 
The worst consequence of this proscription of sound economics is the fact 
that gifted young graduates shun the career of an academic economist. They 
do not want to be boycotted by universities, book reviewers, and publishing 
firms. They prefer to go into business or the practice of law, where their 
talents will be fairly appreciated. It is mainly compromisers, who are not 
eager to find out the shortcomings of the official doctrine, who aspire to 
the teaching positions. There are few competent men left to take the place 
of the eminent scholars who die or reach the retirement age. Among the 
rising generation of instructors are hardly any worthy successors of such 
economists as Frank A. Fetter and Edwin W. Kemmerer of Princeton, Irving 
Fisher of Yale, and Benjamin M. Anderson of California.

There is but one way to remedy this situation. True economists must be 
given the same opportunity in our faculties which only the advocates of 
socialism and interventionism enjoy today. This is surely not too much to 
ask as long as this country has not yet gone totalitarian.



Ludwig von Mises was the acknowledged leader of the Austrian School of 
economic thought, a prodigious originator in economic theory, and a 
prolific author. Mises's writings and lectures encompassed economic theory, 
history, epistemology, government, and political philosophy. His 
contributions to economic theory include important clarifications on the 
quantity theory of money, the theory of the trade cycle, the integration of 
monetary theory with economic theory in general, and a demonstration that 
socialism must fail because it cannot solve the problem of economic 
calculation. Mises was the first scholar to recognize that economics is 
part of a larger science in human action, a science that Mises called 
"praxeology." See Ludwig von Mises's 
<>article archives. Comment on 
the <>blog.

This article is excerpted from 
<>Planning for 
Freedom. It was originally published in The Freeman, April 7, 1952.
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