Von Mises Rises from the Scrap Heap of History

Corporate coffers are spilling out tens of millions of dollars to block the Employee Free Choice Act and keep unions from having a fair chance at organizing workers. Their propagandists claim this confrontation is a "firestorm bordering on Armageddon," in the words of the U.S. Chamber of Commerce.

Pro-labor Congressperson Phil Hare (D-IL) scoffed when his colleague Steve Scalise (R-LA) claimed the battle against unions was like standing up to Saddam Hussein and his thugs, comparing corporate greed to the Iraqi people’s struggle for democracy. Hare explains the reason for supporting the passage of the Employee Free Choice Act: "The problem is that the current system for forming unions is badly broken. Employers routinely intimidate, harass, coerce, reassign, or even fire workers who support a union. In 25 percent of all organizing drives, the employer unlawfully fires at least one worker for union activity. Is this the standard of democracy Scalise is striving for?"

The anti-union rhetoric on conservative websites and direct mail is absurdly shrill, but the main themes track back to right-wing libertarian theories popularized in the 1930s:

  • Big government promotes collectivism and socialism
  • Socialism and Nazism are simply different forms of totalitarian collectivism
  • FDR was a fascist who catered to collectivist union bosses
  • Obama, FDR, and labor unions are paving the road to fascism

These theories lead us to a right-wing economist named Ludwig von Mises. The campaign to exhume the rotting ideological corpse of von Mises can be tracked on Wikipedia, where pages on Mises, the Laissez Faire Austrian School of economics, and the legacy of FDR and the New Deal are an ideological battleground.

The Wiki pages on von Mises and the Ludwig von Mises Institute are reverential—just try to add some criticism. But the real travesty against the historic record is on the page for "Criticism of Franklin D. Roosevelt" where we learn that Roosevelt was "attacked for his economic policies, especially the shift from ‘Individualism’ to ‘Collectivism’…prolonging what [libertarians] believe would otherwise have been a much shorter depression."

According to Wikipedia: "Austrian school economist Thomas DiLorenzo says ‘FDR’s New Deal made the Great Depression longer and deeper. It is a myth that Franklin D. Roosevelt got us out of the Depression and saved capitalism from itself, as generations of Americans have been taught by the state’s education establishment’." (Unfortunately, the Wikipedia community oversight board lacks the backbone to effectively confront these distortions.)

Von Mises joined the staff of the libertarian Foundation for Economic Education (FEE) in the mid-1940s. Articles by von Mises appeared in the FEE publication the Freeman. He was also appointed to a National Association of Manufacturers commission on economics, where he pushed a campaign to roll back the New Deal. World War II had interrupted this campaign, but it was resumed in the late 1940s and early 1950s when a coalition of right-wing libertarians and right-wing Christians laid the groundwork for the new right coalition of the 1970s.

One example of this post-WWII network in which von Mises worked was the Christian Freedom Foundation (CFF), established with funds from the Pew family of Sun Oil wealth. Right-wing icon J. Howard Pew launched the group in 1950 with a $50,000 grant. CFF was an influential precursor to the contemporary Christian Right, with a publication, Christian Economics, sent free to some 175,000 ministers.

In CFF propaganda, social security was described as "the older generation stealing from the younger," the income tax was branded as "communist doctrine," labor unions were described as "stemming from socialism," and foreign aid was pilloried as subsidization of "socialistic schemes and experiments."

Like the anti-union National Right to Work Committee (NRTWC), CFF was later converted into a component of the New Right as hundreds of thousands of dollars were poured into CFF from the Pew family, topping $2 million by the end of the 1960s. Several ministers active with the CFF served on various boards of the NRTWC. Roberta Pew, wife of Sun Oil executive Jack Pew, also served on the board of directors of the NRTWC.

The work of von Mises first appeared in CFF’s Christian Economics in 1950. In 1960 von Mises published "The Economic Foundations of Freedom" in Christian Economics, attacking Roosevelt’s New Deal: "What made the United States become the most affluent country of the world was the fact that the ‘rugged individualism’ of the years before the New Deal did not place too serious obstacles in the way of enterprising men. Businessmen [sic] became rich because they consumed only a small part of their profits and plowed the much greater part back into their businesses. Thus they enriched themselves and all of the people. For it was this accumulation of capital that raised the marginal productivity of labor and thereby wage rates."

The Foundation for Economic Education then reprinted the von Mises article in the Freeman and included it in their book Essays On Liberty. The next year, von Mises addressed the Spring meeting of the Christian Freedom Foundation and continued to write articles for both Christian Economics and the Freeman for several years. He also wrote for William Buckley’s National Review, American Opinion (published by the John Birch Society), and the Intercollegiate Review (from the ultraconservative Intercollegiate Studies Institute).

Along with the theories of von Mises, the John Birch Society (JBS) published copious amounts of conspiracist material, including books, magazines, films, and filmstrips. American Opinion was the JBS magazine in the 1960s and its 1964 masthead reads like a Who’s Who of ultra-conservatism, with Associate Editors Revilo P. Oliver and E. Merrill Root and Contributing Editors Medford Evans and Hans Sennholz. Von Mises was on the Editorial Advisory Committee with Clarence Manion, J. Howard Pew, and Robert W. Stoddard. Oliver went on to a frenetic career as a conspiracy theorist blaming Jewish bankers for the nation’s economic woes. The JBS finally purged him.

As the campaign against the Employee Free Choice Act heats up, we will see and hear a major propaganda effort to rewrite the history of FDR and the New Deal. There are already major symposiums on the calendar. This coalition of major corporations, right-wing economic libertarians, and Christian Right ideologues are a potent force. Our stake as progressives in this struggle is to take that stake and drive it into the heart of laissez faire economic theory as an act of true love for building an equitable and democratic society.


Chip Berlet is senior analyst at Political Research Associates. Versions of the articles in this series are available at www.publiceye.org/jump/zmag.html.