From Laissez-Faire to Zwangswirtschaft

This paper will develop some of the social and political implications of the Austrian theory of interventionism originally presented by Ludwig von Mises and Friedrich A. Hayek.¹ Specifically, it stresses the inherently destabilizing and retrogressive characteristics of the interventionist dynamic within a market system and argues that the dislocations produced by political intervention in the market system ultimately require the replacement of the price mechanism by a completely different system for the allocation of resources based on arbitrary political decision-making (the Zwangswirtschaft type of social organization discussed by von Mises). These points will be developed within the framework of an analytical model of the structure and dynamics of political capitalism as it has evolved historically in the U.S.