Socialism. Людвиг фон Мизес
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goods, contrary to that of consumption goods, can be divided in the natural sense. Under conditions of isolated production the conditions of sharing the having of production goods are the same as the conditions of sharing consumption goods. Where there is no division of labour the having of goods can only be shared if it is possible to share the services rendered by them. The having of non-durable production goods cannot be shared. The having of durable production goods can be shared according to the divisibility of the services they provide. Only one person can have a given quantity of grain, but several may have a hammer successively; a river may drive more than one water wheel. So far, there is no peculiarity about the having of production goods. But in the case of production with division of labour there is a two-fold having of such goods. Here in fact the having is always two-fold: there is a physical having (direct), and a social having (indirect). The physical having is his who holds the commodity physically and uses it productively; the social having belongs to him who, unable to dispose physically or legally of the commodity, may yet dispose indirectly of the effects of its use, i.e. he who can barter or buy its products or the services which it provides. In this sense natural ownership in a society which divides labour is shared between the producer and those for whose wants he produces. The farmer who lives self-sufficiently outside exchange society can call his fields, his plough, his draught animals his own, in the sense that they serve only him. But the farmer whose enterprise is concerned with trade, who produces for and buys in the market, is owner of the means of production in quite a different sense. He does not control production as the self-supporting peasant does. He does not decide the purpose of his production; those for whom he works decide it—the consumers. They, not the producer, determine the goal of economic activity. The producer only directs production towards the goal set by the consumers.
But further owners of the means of production are unable in these conditions to place their physical having directly into the service of production. Since all production consists in combining the various means of production, some of the owners of such means must convey their natural ownership to others, so that the latter may put into operation the combinations of which production consists. Owners of capital, land, and labour place these factors at the disposal of the entrepreneur, who takes over the immediate direction
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of production. The entrepreneurs, again, conduct production according to the direction set by the consumers, who are no other than the owners of the means of production: owners of capital, land, and labour. Of the product, however, each factor receives the share to which he is economically entitled, according to the value of his productive contribution in the yield.
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In essence, therefore, natural ownership of production goods is quite different from natural ownership of consumption goods. To have production goods in the economic sense, i.e. to make them serve one’s own economic purposes, it is not necessary to have them physically in the way that one must have consumption goods if one is to use them up or to use them lastingly. To drink coffee I do not need to own a coffee plantation in Brazil, an ocean steamer, and a coffee roasting plant, though all these means of production must be used to bring a cup of coffee to my table. Sufficient that others own these means of production and employ them for me. In the society which divides labour no one is exclusive owner of the means of production, either of the material things or of the personal element, capacity to work. All means of production render services to everyone who buys or sells on the market. Hence if we are disinclined here to speak of ownership as shared between consumers and owners of the means of production, we should have to regard consumers as the true owners in the natural sense and describe those who are considered as the owners in the legal sense as administrators of other people’s property.3 This, however, would take us too far from the accepted meaning of the words. To avoid misinterpretation it is desirable to manage as far as possible without new words and never to employ, in an entirely different sense, words habitually accepted as conveying a particular idea. Therefore, renouncing any particular terminology, let us only stress once more that the essence of the ownership of the means of
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production in a society which divides labour differs from that found where the division of labour does not take place; and that it differs essentially from the ownership of consumption goods in any economic order. To avoid any misunderstanding we will henceforth use the words, ‘ownership of the means of production’ in the generally accepted sense, i.e. to signify the immediate power of disposal.
The physical having of economic goods, which economically considered constitutes the essence of natural ownership, can only be conceived as having originated through Occupation. Since ownership is not a fact independent of the will and action of man, it is impossible to see how it could have begun except with the appropriation of ownerless goods. Once begun ownership continues, as long as its object does not vanish, until either it is given up voluntarily or the object passes from the physical having of the owner against his will. The first happens when the owner voluntarily gives up his property; the latter when he does it involuntarily—e.g. when cattle stray into the wilds—or when some other person forcibly takes the property from him.
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All ownership derives from occupation and violence. When we consider the natural components of goods, apart from the labour components they contain, and when we follow the legal title back, we must necessarily arrive at a point where this title originated in the appropriation of goods accessible to all. Before that we may encounter a forcible expropriation from a predecessor whose ownership we can in its turn trace to earlier appropriation or robbery. That all rights derive from violence, all ownership from appropriation or robbery, we may freely admit to those who oppose ownership on considerations of natural law. But this offers not the slightest proof that the abolition of ownership is necessary, advisable, or morally justified.
Natural ownership need not count upon recognition by the owners’ fellow men. It is tolerated, in fact, only as long as there is no power to upset it and it does not survive the moment when a stronger man seizes it for himself. Created by arbitrary force it must always fear a more powerful force. This the doctrine of natural law has called the war of all against all. The war ends when the actual relation is recognized as one worthy to be maintained. Out of violence emerges law.
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The doctrine of natural law has erred in regarding this great change, which
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lifts man from the state of brutes into human society, as a conscious process; as an action, that is, in which man is completely aware of his motives, of his aims and how to pursue them. Thus was supposed to have been concluded the social contract by which the State and the community, the legal order, came into existence. Rationalism could find no other possible explanation after it had disposed of the old belief which traced social institutions back to divine sources or at least to the enlightenment which came to man through divine inspiration.4 Because it led to present conditions, people regarded the development of social life as absolutely purposeful and rational; how then could this development have come about, except through conscious choice in recognition of the fact that it was purposeful and rational? Today we have other theories with which to explain the matter. We talk of natural selection in the struggle for existence and of the inheritance of acquired characteristics, though all this, indeed, brings us no nearer to an understanding of ultimate riddles than can the theologian or the rationalist. We can ‘explain’ the birth and development of social institutions by saying that they were helpful in the struggle for existence, by saying that those who accepted and best developed them were better equipped against the dangers of life than those who were backward in this respect. To point out how unsatisfactory is such an explanation nowadays would be to bring owls* to Athens. The time when it satisfied us and when we proposed it as a final solution of all problems of being