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Nation, State, and Economy: Contributions to the Politics and History of Our Time
In 1919, Mises explained how the first World War had come about, distinguishing between nations, states, and economies. Prior to the nineteenth century, the boundaries of a state were determined by conquest, coercion, rulers, and princes; the people had nothing to say in the matter. A nation, composed of persons speaking the same language and to a large extent sharing the same culture, was an essentially neutral concept, in no way incompatible with a liberal economy, individual freedom, democracy, and the right of self-determination. Yet this peaceful nationalism gave way to militarism, international conflict, and war. Why?
Nations, like individuals, learn from experience. The largely liberal movement for a “greater Germany,” composed of Germany, German-Austria, and scattered enclaves of German nationals in neighboring countries, was frustrated by the state in the form of the Kingdom of Prussia, which became the German Empire, and the Hapsburg Empire of Austria-Hungary. Essential to Mises’s concept of a classical liberal economy is the absence of interference by the state. Under the chancellorship of Bismarck, the essentially reactionary German state became increasingly intrusive in every aspect of the nation—economic, social, and of course political. As the German state sought to become stronger by forcefully acquiring additional territory, German nationalism became increasingly militaristic and imperialistic, leading to international conflict and war. In World War I, Germany and its allies were overpowered by the Allied Powers in population, economic production, and military might. Because Germany needed imports to survive, much less to wage war, and was cut off from foreign suppliers, its defeat was inevitable.
Mises believed that Germany should not seek revenge for the “fetters . . . forced upon German development by the peace of Versailles.” Rather, his theme throughout this book is that Germany should adopt liberal ideas and a free market economy by expanding the international division of labor, which would help all parties. “For us and for humanity,” Mises wrote, “there is only one salvation: return to rationalistic liberalism.”
Ludwig von Mises (1881–1973) was the leading spokesman of the Austrian School of Economics throughout most of the twentieth century. He earned his doctorate in law and economics from the University of Vienna in 1906. In 1926, Mises founded the Austrian Institute for Business Cycle Research. From 1909 to 1934, he was an economist for the Vienna Chamber of Commerce. Before the Anschluss, in 1934 Mises left for Geneva, where he was a professor at the Graduate Institute of International Studies until 1940, when he emigrated to New York City. From 1948 to 1969, he was a visiting professor at New York University.
Bettina Bien Greaves is a former resident scholar, trustee, and longtime staff member of the Foundation for Economic Education. She has written and lectured extensively on topics of free market economics. Her articles have appeared in such journals as Human Events, Reason, and The Freeman: Ideas on Liberty. A student of Mises, Greaves has become an expert on his work in particular and that of the Austrian School of economics in general. She has translated several Mises monographs, compiled an annotated bibliography of his work, and edited collections of papers by Mises and other members of the Austrian School.
Nations, like individuals, learn from experience. The largely liberal movement for a “greater Germany,” composed of Germany, German-Austria, and scattered enclaves of German nationals in neighboring countries, was frustrated by the state in the form of the Kingdom of Prussia, which became the German Empire, and the Hapsburg Empire of Austria-Hungary. Essential to Mises’s concept of a classical liberal economy is the absence of interference by the state. Under the chancellorship of Bismarck, the essentially reactionary German state became increasingly intrusive in every aspect of the nation—economic, social, and of course political. As the German state sought to become stronger by forcefully acquiring additional territory, German nationalism became increasingly militaristic and imperialistic, leading to international conflict and war. In World War I, Germany and its allies were overpowered by the Allied Powers in population, economic production, and military might. Because Germany needed imports to survive, much less to wage war, and was cut off from foreign suppliers, its defeat was inevitable.
Mises believed that Germany should not seek revenge for the “fetters . . . forced upon German development by the peace of Versailles.” Rather, his theme throughout this book is that Germany should adopt liberal ideas and a free market economy by expanding the international division of labor, which would help all parties. “For us and for humanity,” Mises wrote, “there is only one salvation: return to rationalistic liberalism.”
Ludwig von Mises (1881–1973) was the leading spokesman of the Austrian School of Economics throughout most of the twentieth century. He earned his doctorate in law and economics from the University of Vienna in 1906. In 1926, Mises founded the Austrian Institute for Business Cycle Research. From 1909 to 1934, he was an economist for the Vienna Chamber of Commerce. Before the Anschluss, in 1934 Mises left for Geneva, where he was a professor at the Graduate Institute of International Studies until 1940, when he emigrated to New York City. From 1948 to 1969, he was a visiting professor at New York University.
Bettina Bien Greaves is a former resident scholar, trustee, and longtime staff member of the Foundation for Economic Education. She has written and lectured extensively on topics of free market economics. Her articles have appeared in such journals as Human Events, Reason, and The Freeman: Ideas on Liberty. A student of Mises, Greaves has become an expert on his work in particular and that of the Austrian School of economics in general. She has translated several Mises monographs, compiled an annotated bibliography of his work, and edited collections of papers by Mises and other members of the Austrian School.
194 pages, Hardcover
First published June 1, 1983
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499 people want to read
About the author
Ludwig von Mises
279 books1,254 followersLudwig Heinrich Edler von Mises (German pronunciation: [ˈluːtvɪç fɔn ˈmiːzəs]; September 29, 1881 – October 10, 1973) was an Austrian economist, historian, philosopher, author, and classical liberal who had a significant influence on the Austrian government's economic policies in the first third of the 20th century, the Austrian School of Economics, and the modern free-market libertarian movement.
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Displaying 1 - 9 of 9 reviews
January 28, 2025
2025-01-27 Great new article on the major points and value of this book! “A Crisis in World History” by Peter Mentzel on the LawLibertyorg site. Highly recommended!!!
2024-03-12 Just made a few minor edits and want to note that because of all the interest in the label "nationalism" this book is worth a read. It is not the easiest, but one will be rewarded with the extra work required. Very good at expanding one's horizons and perspectives on what is really important or dangerous about nations and nationalism as well as states and statism.
2022-04-29 I just referred a friend to this book and was surprised that I could not find my original review of it on Goodreads. I thought for sure that I had already reviewed it here from when I read it 6-10 years or possibly longer ago. It may be because I never actually did write the review I wanted to, since the book never quite sat well with me and I was trying to figure out how to approach a review.
With Putin's invasion of Ukraine (Feb. 2022) and that ongoing war, it is good to remember or investigate books like this. The author was actually born in the city now known as Lviv/Lvov, in western Ukraine, which was known by the Germanic name Lemberg and under the rule of the Austro-Hungarian Monarchy when he was born in 1881. That city had a very sad history of going to the Poles and then the Soviet Union, and losing huge numbers of it's population during and around WWII.
Memories of the book:
- Difficult - not an easy read
- Fascinating perspective on what constitutes a "nation" vs. a "state" - The main determiner for Mises, as I remember, is language, which shapes so much of a person's perspective on: family, friends, culture, allegiances, sympathies, ways of thinking, etc.
- The translator, Leland Yeager, has a wonderful intro in this edition, where he compares it to Keynes' far more famous and influential, "The Economic Consequences of the Peace" since both books were written near the same time, just after the Treaty of Versailles, after WWI.
- The book went into much detail about the history of eastern Europe, about which most Americans, like myself, know fairly little. So myriad references Mises uses in the book will be difficult and not easily processed, unless the reader does possess a good knowledge of the history of that area, or is willing to study up on that history.
- Mises' opposition to war and his efforts to help explain the reasons how WWI developed and what needed to be done to head off future similar wars went sadly unheeded.
- One could say that Mises anticipated the rise of Germany/Hitler to some extent in this book, especially in light of further understanding of the sad aspects of the Treaty of Versailles.
I recommend this book to serious readers who:
- want to know more about this part of the world - Eastern Europe (Ukraine, Austria, Czech Republic, Slovakia, Hungary, Russia, Poland, etc.) - and some of the reasons for the many conflicts there, and what policies and ideologies can help or hurt,
- would like a very different take on WWI and the Treaty of Versailles from mainstream or Keynes' views,
- are curious about how important language is, in shaping people's perspectives, sympathies and passions,
- care about the interaction of economics and government policies, and how they can be a huge factor in causing war or peace,
- might consider the importance of self determination/secession/plebiscites as alternatives to war.
- just what is this nation/nationalism idea - good, bad, dependent?
- how do the concepts of the state and economy interact and oppose and sometimes work together
- good thoughts on immigration and the value of the free movement of people to avoid oppression and seek better lives, yet the threat of politically induced mass migrations for some receiving countries
Looking through some old e-mails, I found that I really liked an article by Richard Ebeling, a great Mises scholar, on the 100th anniversary of this book. You will find it at the excellent site of AIER dot org. Highly recommended and far better than this review.
2024-06-19 updated a bit
2024-03-12 Just made a few minor edits and want to note that because of all the interest in the label "nationalism" this book is worth a read. It is not the easiest, but one will be rewarded with the extra work required. Very good at expanding one's horizons and perspectives on what is really important or dangerous about nations and nationalism as well as states and statism.
2022-04-29 I just referred a friend to this book and was surprised that I could not find my original review of it on Goodreads. I thought for sure that I had already reviewed it here from when I read it 6-10 years or possibly longer ago. It may be because I never actually did write the review I wanted to, since the book never quite sat well with me and I was trying to figure out how to approach a review.
With Putin's invasion of Ukraine (Feb. 2022) and that ongoing war, it is good to remember or investigate books like this. The author was actually born in the city now known as Lviv/Lvov, in western Ukraine, which was known by the Germanic name Lemberg and under the rule of the Austro-Hungarian Monarchy when he was born in 1881. That city had a very sad history of going to the Poles and then the Soviet Union, and losing huge numbers of it's population during and around WWII.
Memories of the book:
- Difficult - not an easy read
- Fascinating perspective on what constitutes a "nation" vs. a "state" - The main determiner for Mises, as I remember, is language, which shapes so much of a person's perspective on: family, friends, culture, allegiances, sympathies, ways of thinking, etc.
- The translator, Leland Yeager, has a wonderful intro in this edition, where he compares it to Keynes' far more famous and influential, "The Economic Consequences of the Peace" since both books were written near the same time, just after the Treaty of Versailles, after WWI.
- The book went into much detail about the history of eastern Europe, about which most Americans, like myself, know fairly little. So myriad references Mises uses in the book will be difficult and not easily processed, unless the reader does possess a good knowledge of the history of that area, or is willing to study up on that history.
- Mises' opposition to war and his efforts to help explain the reasons how WWI developed and what needed to be done to head off future similar wars went sadly unheeded.
- One could say that Mises anticipated the rise of Germany/Hitler to some extent in this book, especially in light of further understanding of the sad aspects of the Treaty of Versailles.
I recommend this book to serious readers who:
- want to know more about this part of the world - Eastern Europe (Ukraine, Austria, Czech Republic, Slovakia, Hungary, Russia, Poland, etc.) - and some of the reasons for the many conflicts there, and what policies and ideologies can help or hurt,
- would like a very different take on WWI and the Treaty of Versailles from mainstream or Keynes' views,
- are curious about how important language is, in shaping people's perspectives, sympathies and passions,
- care about the interaction of economics and government policies, and how they can be a huge factor in causing war or peace,
- might consider the importance of self determination/secession/plebiscites as alternatives to war.
- just what is this nation/nationalism idea - good, bad, dependent?
- how do the concepts of the state and economy interact and oppose and sometimes work together
- good thoughts on immigration and the value of the free movement of people to avoid oppression and seek better lives, yet the threat of politically induced mass migrations for some receiving countries
Looking through some old e-mails, I found that I really liked an article by Richard Ebeling, a great Mises scholar, on the 100th anniversary of this book. You will find it at the excellent site of AIER dot org. Highly recommended and far better than this review.
2024-06-19 updated a bit
May 23, 2020
Tough reading but worthy. Mises view on causes causes of the World War cannot be straightforward of course and starts at large - with the origins of the concept of a nation, migration, brief history of Germany and Austria, Hohenzollerns´ militarism and Habsburgs´totalitarism which could not rule over polyglot nations forever and compete with other democratic states and their economies.
Mises takes view that totalitarian and militaristic policy of Germany was doomed from the start. His analysis of war economy shows why Central powers couldn´t win.
Mises takes view that totalitarian and militaristic policy of Germany was doomed from the start. His analysis of war economy shows why Central powers couldn´t win.
October 20, 2021
A difficult read, but an interesting one nonetheless. Mises gives a nuanced take on the circumstances that led to the outbreak of the First World War and the potential future post-WWI Germany was likely to experience under the boot of the Versailles Treaty... which, in all fairness, wasn't all far off the mark; Mises stated that Germany would likely bide their time and continue the war at a later date.
His chapters on the war economy and socialism at the tail end of the book were probably the best parts of the book, in my opinion, due to how relevant they seem in today's world.
His chapters on the war economy and socialism at the tail end of the book were probably the best parts of the book, in my opinion, due to how relevant they seem in today's world.
September 8, 2016
Last part of the book was about Socialism and it is intrinsic union with today's public politics, qualified the book as a speech for taking several explanations of recovering german theories of state and how it was not being part of the holocaust idealism, book covered german theories of work and state enounced topics of the way of german contemporaneous authors were brief detailed in their books.
May 16, 2019
Not as coherent as his other works. Nevertheless, a great companion to Margaret MacMillian's "1919: Six Months That Changed the World" from one who bore witness to the carnage of World War I, and prophesied the outcome of the peace talks.
August 2, 2013
Very tough to read. Mises' language is very vague; his examples are not specific. Though I can understand his theory and agree with him, the book itself is just not enjoyable to read.
Read
March 1, 2024
Resumen:
Mises habla de la nación basándose en la lengua, las comunidades nacionales son comunidades lingüisticas.
Distingue entre el nacionalismo liberal o pacifista y el nacionalismo militarista o imperialista.
Se centra principalmente en el mundo germano, es decir, Alemania y Austria.
Critica lo que llama el socialismo de guerra, es decir, cuando el estado en una situación de guerra se hace con el control de la producción, raciona la comida si la guerra produce escasez, etc, y dice que es peor hacer eso que no hacer nada y dejar actuar al libre mercado.
Al final habla del socialismo y el imperialismo; comenta que el socialismo ha apoyado la democrácia debido a que era el movimiento de la mayoría pero que cuando han podido hacerse con el poder por la fuerza por medios no democráticos como en Rusia los principios de la democracia han sido tirados por la borda.
También comenta que el fin último de la política económica del liberalismo y del socialismo es el mismo, que es garantizar la máxima felicidad al máximo número de personas.
Comentario:
El libro es un repaso sobre la visión de Mises de la nación, el estado y la economía, comparando el socialismo y el liberalismo.
Dado que es una de las personas más influyentes del liberalismo en el siglo XX su opinión es interesante.
Mises habla de la nación basándose en la lengua, las comunidades nacionales son comunidades lingüisticas.
Distingue entre el nacionalismo liberal o pacifista y el nacionalismo militarista o imperialista.
Se centra principalmente en el mundo germano, es decir, Alemania y Austria.
Critica lo que llama el socialismo de guerra, es decir, cuando el estado en una situación de guerra se hace con el control de la producción, raciona la comida si la guerra produce escasez, etc, y dice que es peor hacer eso que no hacer nada y dejar actuar al libre mercado.
Al final habla del socialismo y el imperialismo; comenta que el socialismo ha apoyado la democrácia debido a que era el movimiento de la mayoría pero que cuando han podido hacerse con el poder por la fuerza por medios no democráticos como en Rusia los principios de la democracia han sido tirados por la borda.
También comenta que el fin último de la política económica del liberalismo y del socialismo es el mismo, que es garantizar la máxima felicidad al máximo número de personas.
Comentario:
El libro es un repaso sobre la visión de Mises de la nación, el estado y la economía, comparando el socialismo y el liberalismo.
Dado que es una de las personas más influyentes del liberalismo en el siglo XX su opinión es interesante.
August 25, 2025
This is an amazing text.
Read
September 23, 2010"NATION, STATE, AND ECONOMY (Lib Works Ludwig Von Mises PB) by LUDWIG VON MISES (2006)"
Displaying 1 - 9 of 9 reviews