I was recently reading Ludwig von Mises’ book Interventionism: An Economic Analysis, and came across a particularly well-worded passage on why governments shouldn’t resort to economic central planning in times of war. Specifically, Mises was arguing that it was economically unwise for governments to try to prevent private companies from making profits by supplying the war effort, even though war profiteering is regarded with distaste by almost everybody and banning it would be a very popular policy.
The fact that Mises argued so ably against this policy, and did so in 1940 of all years, is a testament not only to his characteristically brilliant economic insight but also to his extraordinary moral courage and perseverance in pursuing the truth above all other considerations.
Due to the length of the quote, I have decided to share it here rather than on Twitter, which is my usual repository for particularly pithy Mises lines I come across.
“In England, too, the government was concerned primarily with preventing war profiteering, rather than with the procurement of the best possible equipment for the armed forces. For example, the 100 percent war profits tax might be cited. …
The anti-capitalist says, ‘This is precisely the point. Business is unpatriotic. The rest of us are told to leave our families and to give up our jobs; we are placed in the army and have to risk our lives. The capitalists, however, demand their profits even in time of war. They ought to be forced to work unselfishly for the country, if we are forced to fight for it.’ Such arguments shift the problem into the sphere of ethics. This, however, is not a matter of ethics but of expediency.
Those who detest war on moral grounds because they consider the killing and maiming of people as inhumane, should attempt to replace the ideology which leads to war by an ideology which would secure permanent peace. However, if a peaceful nation is attacked and has to defend itself, only one thing counts: the defense must be organized as quickly and as efficiently as possible; the soldiers must be given the best weapons and equipment. This can only be accomplished if the working of the market economy is not interfered with. …
When the capitalist nations in time of war give up the industrial superiority which their economic system provides them, their powers to resist and their chances to win are considerably reduced.
That some incidental consequences of warfare are regarded as unjust can readily be understood. The fact that entrepreneurs get rich on armament production is but one of many unsatisfactory and unjust conditions which war creates. But the soldiers risk their lives and health. That they die unknown and without reward in the front line, while the army leaders and staff remain safe and secure to win glory and to further their careers is ‘unjust’ too. The demand to eliminate war profits is not any more reasonable than the demand that the army leaders, their staff, the surgeons, and the men on the home front should do their work under the privations and dangers to which the fighting soldier is exposed.
It is not the war profits of the entrepreneurs that are objectionable. War itself is objectionable!” (pp.73-74)
For more information on Mises’ book Interventionism, which stands alongside his better-known books Socialism and Liberalism in his writings comparing different economic systems, follow this link to Mises.org for information about the book’s significance and where to find a copy: https://mises.org/library/interventionism-economic-analysis