The considerations and objectives that have guided the colonial policy of the European powers since the age of the great discoveries stand in the sharpest contrast to all the principles of liberalism. The basic idea of colonial policy was to take advantage of the military superiority of the white race over the members of other races. The Europeans set out, equipped with all the weapons and contrivances that their civilization placed at their disposal, to subjugate weaker peoples, to rob them of their property, and to enslave them. Attempts have been made to extenuate and gloss over the true motive of colonial policy with the excuse that its sole object was to make it possible for primitive peoples to share in the blessings of European
civilization. Even assuming that this was the real objective of the governments that sent out conquerors to distant parts of the world, the liberal could still not see any adequate basis for regarding this kind of colonization as useful or beneficial. If, as we believe, European civilization really is superior to that of the primitive tribes of Africa or to the civilizations of Asia—estimable though the latter may be in their own way—it should be able to prove its superiority by inspiring these peoples to adopt it of their own accord. Could there be a more doleful proof of the sterility of European civilization than that it can be spread by no other means than fire and sword?
It is probably old news, but in many respects Mises is the clear target of Karl Polanyi's (1944) The Great Transformation. In particular, Polanyi thinks Mises misunderstands the nature of the illiberal reaction (post 1870s) against the earlier nineteenth century success of liberalism. Polanyi grants Mises that there was such a reaction. To simplify, according to Polanyi, Mises fails to understand that (i) markets are inherently fragile and (ii) proper functioning markets are very disruptive of traditional forms of life and destroy previously existing organic culture. Both (i) and (ii) generate reactions that have the (possibly conflicting) aims to (a) shore up and protect the market and (b) protect society to slow down the rate of social change. In some cases (a)-(b) work in the same direction by [A] strengthening liberal society (by a cunning of history) and in some cases they work in the same direction by [B] strengthening forces that threaten to overwhelm liberal society. As an aside, one can understand the developing program of Ordoliberalism (which Polanyi doesn't seem to know) as recognizing the significance of [A] and to turn it into a feature of deliberate, progressive liberal program.
Now, Mises recognizes (i) and (ii). He thinks (ii) is fine because Mises thinks liberal society is genuinely superior form of civilization. But it's only fine if markets are embraced voluntarily--Mises is, not unlike Smith, a fierce critic of the violent extension of liberal society. (Few critics of Mises fail to acknowledge this forthrightly.) Mises has no fondness at all for the idea -- which unfortunately tempted Mill -- for the civilizational mission of European colonialism and imperial projects. Mises recognizes (i), but thinks the source(s) of fragility are to be located in the illiberal reaction against markets, and so embraces a cosmopolitan liberal global order (which would de facto eliminate opposition). The obvious problem (immanent to Mises's project) is that there is no clear path from here to there. (I return to this below.) Polanyi would add that Mises' one-sided focus on economics means Mises fails to grasp the particular conditions of the balance of power politics that enabled the growth and then demise of liberal internationalism. If true it would be a bit comic if the liberal cannot understand her triumphs from within a liberal paradigm.
Because Melinda Cooper (recall) has brilliantly dissected the shortcomings of Polanyi (and those inspired by him) in her recent Family Values, so I will not rehearse them. But it is worth noting that one of the most arresting bits of Polanyi's thought (indebted to Marx, and eerily foreshadowed in More's Utopia) is to treat the harmful effects of capitalist development* on English peasants (between 1500-1850) and on (19th and 20th century) colonial subjects as de facto identical. In addition to violent appropriation, there is a destruction of culture and form of life such that the victims risk becoming subhuman (and Polanyi recognizes that Adam Smith had anticipated his thought).
Now, Polanyi and Mises are in firm agreement that the violent version of capitalist development is incredibly harmful to the victims, but does eventually deliver economic fruits. They are also in firm agreement -- this also makes for some uncomfortable reading in both -- that whatever moral vices one finds in non-white colonial subjects are entirely due to the effects of colonialism and subjugation.+ (Fanon picks up the idea, but treats the behavior psychoanalytically rather than morally.) Amazingly, on this point Polanyi is much more optimistic than Mises:
Much of the massive suffering inseparable from a period of transition is already behind us. In the social and economic dislocation of
our age, in the tragic vicissitudes of the depression, fluctuations of currency, mass unemployment, shiftings of social status, spectacular destruction of historical states, we have experienced the worst. Unwittingly we have been paying the price of the change. Far as mankind still is from having adapted itself to the use of machines, and great as the pending changes are, the restoration of the past is as impossible as the transferring of our troubles to another planet. --Karl Polanyi The Great Transformation (258-259)
For Polanyi there is no going back, and the right attitude is to let progress run its course. To be sure the rate of change of this course should be slowed down where the social forces can muster appropriate power. Polanyi is surprisingly uninterested in reflecting on what this entails about the future colonial and imperial policy.
Mises, by contrast, recognizes explicitly that Europeans cannot be trusted to get this policy right and destroys self-serving myths against European withdrawal. For him it is self-evident that "The most simple and radical solution would be for the European governments to withdraw their officials, soldiers, and police from these areas and to leave the inhabitants to themselves."
However, Mises while tempted by the radical solution, fails to endorse it. And he does so because -- say (recall) unlike Henry Simons -- he believes liberalism is the right policy for everyone everywhere. In particular, he thinks that given the (unjustified extension) of liberal institutions (property rights, trade, and accompanying legal and physical infrastructure) it would economically harm both Europeans and their victims to allow the gains from trade to Europeans and colonial subjects alike to be dissipated in the unwinding of colonial empires. And so he advocates the mandate system under the leadership of the "League of Nations" which would allow for a "transition" period (129).
I think there is no doubt that Mises was truly naive in thinking that the League could be impartial arbiter or that any self-respecting subject could accept the tutelage it implied (as Mises kind of recognizes). But unlike cynical and uncharitable readers of Mises it seems clear to me his heart is in the right place. For him the short-term goal must be global emancipation. Unlike other advocates of the League, Mises does not want to promote it in order to secure dominance for Europeans and their interests by other means. Rather, the problem is, as I noted earlier in the week, that Mises' (anti-pluralistic) understanding of liberalism prevents him recognizing (the plausibly liberal idea) that everyone should be free to experiment with the forms of life they wish, including the rejection of liberal institutions, even at the expense of economic fruits.
*Quick point on terminology: I distinguish (recall) 'capitalism' in two kinds: one illiberal and violent that is characteristic of mercantilism; and another more pacific and liberal one. I think Mises and Polanyi also both accept some such distinction.
+Compare Polanyi ("The vices developed by the mass of the people were on the whole the same as characterized colored populations debased by disintegrating culture contact: dissipation, prostitution, thievishness, lack of thrift and providence, slovenliness, low productivity of labor, lack of self-respect and stamina," (303)) with Mises: "It may be safely taken for granted that up to now the natives have learned only evil ways from the Europeans, and not good ones. This is not the fault of the natives, but rather of their European conquerors, who have taught them nothing but evil.
They have brought arms and engines of destruction of all kinds to the colonies; they have sent out their worst and most brutal individuals as officials and officers; at the point of the sword they have set up a colonial rule that in its sanguinary cruelty rivals the despotic system of the Bolsheviks. Europeans must not be surprised if the bad example that they themselves have set in their colonies now bears evil fruit. In any case, they have no right to complain pharisaically about the low state of public morals among the natives. Nor would they be justified in maintaining that the natives are not yet mature enough for freedom and that they still need at least several years of further education under the lash of foreign rulers before they are
capable of being, left on their own. For this "education" itself is at least partly responsible for the terrible conditions that exist today in the colonies, even though its consequences will not make themselves fully apparent until after the eventual withdrawal of European troops and officials." (126)
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