What Ludwig von Mises Meant by “Democracy”
By Ryan McMaken
August 15, 2024
“Democracy” is one of those terms that is essentially useless unless the one using the word first defines his terms. After all, the term “democratic” can mean anything from small-scale direct democracy to the mega-elections we see in today’s huge constitutional states. Among the modern social-democratic Left, the term often just means “something I like.”
The meaning of the term can also vary significantly from time to time and from place to place. During the Jacksonian period, the Democratic party—which at the time was the decentralist, free-market, Jeffersonian party—was called “the Democracy.” By the mid twentieth century, the term meant something else entirely. In Europe, the term came to take on a variety of different meanings from place to place.
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For our purposes here, I want to focus on how one particular European—Ludwig von Mises—used the term.
Although many modern students of Mises are often highly skeptical of democracy of various types, it is clear that Mises himself used the term with approval. But, Mises used the word in a way that was quite different from how most use it today. The Misesian view contrasts with modern conceptions of a “democracy” in which majority rule is forcibly imposed upon the whole population. Because modern democratic states exercise monopolistic power over their populations, there is then no escape from this “will of the majority.”
Misesian democracy is something else altogether.
Mises’s vision of democracy must be understood in light of his support for unlimited secession as a tool against majoritarian rule. For Mises, “democracy” means the free exercise of a right of exit, by which the alleged “will of the majority” is rendered unenforceable against those who seek to leave.
Moreover, we can only understand Mises’s idea of democracy if we note that Mises’s conception of a liberal “state” is not really a state at all; it contradicts the common definition of a state as an organization with a monopoly on the means of coercion. For Mises, membership within a “free” state is ultimately voluntary since secession remains always an option.
Mises’s View of Self-Determination and Secession
Mises supported the idea of a polity he called a “free national state.” However, Mises’s national state is not a monopolistic state because Mises maintained that “[n]o people and no part of a people shall be held against its will in a political association that it does not want.”
For Mises, the people of any portion of a national state are free to exercise their right of self-determination and by exiting the state via secession. As Mises put it:
The right of self-determination in regard to the question of membership in a state thus means: whenever the inhabitants of a particular territory, whether it be a single village, a whole district, or a series of adjacent districts, make it known, by a freely conducted plebiscite, that they no longer wish to remain united to the state to which they belong at the time, their wishes are to be respected and complied with. …If it were in any way possible to grant this right of self-determination to every individual person, it would have to be done.
Mises contrasts this type of free association with the “princely state” which is essentially the modern state as we have come to know it. The princely state, Mises writes, “strives restlessly for expansion of its territory and for increase in the number of its subjects. …The more land and the more subjects, the more revenues and the more soldiers.” When this type of state is not expanding, it is busy maintaining its borders, and thus, once within the borders of this state, all populations are denied any right of self-determination. After all, to tolerate self-determination—and the right of secession that naturally follows—would be to tolerate the dismemberment of the state.
Mises presents an alternative:
Liberalism knows no conquests, no annexations … the problem of the size of the state is unimportant to it. It forces no one against his will into the structure of the state. Whoever wants to emigrate is not held back. When a part of the people of a state wants to drop out of the union, liberalism does not hinder it from doing so. Colonies that want to become independent need only do so.
Only if we consider the context presented by Mises here can we understand Mises when he presents his definition of democracy: “Democracy is self-determination, self-government, self-rule.” Put another way, “democracy” means groups of people—including even very small groups of people—can freely chose either to remain within a certain state, or to leave. Thus, we see that this idea of democracy is incompatible with the very idea of the modern state.
For Mises, democracy definitely does not mean what it has come to mean in modern usage: that all citizens within a specific state territory are bound to submit themselves to the laws approved by that territory’s ruling majority coalition, no matter what.
The Problem of Majority Rule
Indeed, Mises was thoroughly acquainted with the problem of majoritarian rule and how it is used to strip individuals of their rights. This process is especially dangerous in diverse societies where the overall population contains many cultural groups with incompatible values.
Mises writes that in culturally diverse territories,
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the application of the majority principle leads not to the freedom of all but to the rule of the majority over the minority. … Majority rule signifies something quite different here than in nationally uniform territories; here, for a part of the people, it is not popular rule but foreign rule.
Mises notes that for those on the losing side—that is, those within the out-of-power minority cultural group—majority rule essentially means a permanent loss of any ability to meaningfully affect the policies adopted by the state. Those groups that have little hope of competing with the majority coalition have essentially been conquered and are subject to a type of “foreign rule.”
Mises understood that the only sustainable solution to this problem is to respect the right of self-determination secured by secession.
Without this right of self-determination and unlimited secession every state is, in practice, a monopolistic state that can impose its own values and agenda on the entire population. The presence of elections and “democratic” institutions—democratic in the common, modern sense—does little or nothing to mitigate the state’s power over those who would prefer to leave or govern themselves differently.
Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.Today's selection -- from The Fixers by E.J. Flemming. Howard Strickling, Head of MGM Publicity, "fixed" star's problems during Hollywood's golden age.
“In late 1940, Strickling was called in to keep dozens of stars out of the press or jail. One big problem was Lionel Atwill's parties. He was born in England and came to the U.S. in 1932, building a career portraying suave villains in horror films such as Dr. X (1932), Mystery of the Wax Museum (1933), and Son of Frankenstein (1939). During his loan-outs to MGM, Atwill became friendly with many actors and executives. He lived in a lovely Spanish hacienda in Pacific Palisades at 13515 d'Este Drive and cultivated an image as an erudite country gentleman surrounded by English master paintings and antiques. But his dark side was obsessed with murder trials and his weekly sex parties. The parties were by invitation only, and guests had to bring a doctor's letter certifying a clean bill of health. After a formal dinner, guests retired to the living room and ceremoniously removed everything but jewelry. Atwill assigned partners according to personal preferences and visited different rooms during the weekend-long party.
“Strickling knew dozens of MGM stars visited the parties, including Gable, Crawford, Stanwyck, Dietrich, and allegedly Mannix. Atwill's soirees remained a Hollywood secret until early 1941. His 1940 Christmas party included several underage girls, and one 16-year-old Minnesota runaway named Sylvia claimed she became pregnant there. Atwill was found innocent at trial but subsequent court proceedings led to a conviction for perjury. Strickling prevailed upon the police and the prosecutors not to investigate his parties any further, and Sylvia was sent home from L.A. with a cash settlement.
“In February of 1941, as the Atwill party stories filled front pages, a Hollywood legend was dying in a small bungalow in Beachwood Canyon. For 25 years, Larry Edmunds' cramped Hollywood Boulevard bookstore was a favorite of the movie elite like W.C. Fields, the Barrymores, Basil Rathbone, and every beautiful actress in Hollywood. Edmunds had a voracious sexual appetite and affairs that included Mary Astor, Marlene Dietrich, Paulette Goddard, and dozens of others. He also slept with men. But by February 1941 he had drifted into alcoholism and mental illness and was living in a garage apartment at 2470 Beachwood Drive, consumed with alcoholic delusions. Police found his head wedged into the stove, dead from gas fumes, near a suicide note describing little men he saw crawling through the walls trying to kill him. Of more concern to Strickling, after he received the call from police, was the house full of mementoes from MGM stars, both male and female. His men rushed to the house to remove hundreds of notes and gifts from lovers of both sexes.
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| Hollywood movie studios in 1922 |
“In the early months of 1941, MGM began filming Dr. Jekyll and Mr.Hyde, with Spencer Tracy as the crazed doctor. He threatened to walk out unless Ingrid Bergman was given the sexy role of Ivy, the doctor's love interest, rather than Victor Fleming's choice, Lana Turner. The studio bowed and Bergman got the part. She was married to a Swedish doctor and had an infant daughter, but once filming began she slept with Fleming and Tracy, who stole the 26-year-old from his old friend. The fight over Bergman led to frequent arguments between the normally close friends. The fling lasted for several months until her husband heard about it and approached Mayer. Mannix ordered Tracy to end the affair or be fired, while Strickling told writers that Tracy was just ‘mentoring; the young actress and arranged photos of the two at a Beverly Hills ice cream shop sharing milk shakes.
“Tracy's next fling would last 30 years. When Katharine Hepburn first came to Hollywood, one of her RKO bosses described her as ‘a cross between a monkey and a horse.’ She wasn't the typical Hollywood ingenue: she was covered with freckles. David O. Selznick found her ‘sexually repellent,’ and described her as a ‘boa constrictor on a fast.’ Writer Dorothy Parker described her acting talent as ‘running a gamut of emotions from A to B.’ But fans loved her. Born into a wealthy Connecticut family, she moved to Hollywood in 1932. She left her husband behind, refusing to let him come along. But she did bring best friend Laura Harding, an heiress to the American Express fortune. The two were inseparable. Even Hepburn's marriage, forced upon her by her family, didn't end the strange relationship. She and Harding lived in a Coldwater Canyon house that had once belonged to Boris Karloff. By the time she met Tracy in early 1941, she was an established star with a resume that included A Bill of Divorcement (1932), Bringing Up Baby (1938), and The Philadelphia Story (1940).
“She had relationships with men and women. Her men included Leland Hayward and Charles Boyer (both were married), and she lived with Howard Hughes. She called them her beaus but continued to share the house with Harding. The couple's weird arrangement was often discussed, since they acted as a couple and Harding described herself at RKO as ‘Kate's husband.’ Hepburn described her actual husband as being ‘swell about everything,’ and he stayed in Connecticut until she divorced him in 1936. Harding accompanied her to Mexico for the quickie divorce. In early 1941 Tracy and Hepburn were cast in Woman of the Year. The sexual tension between the two was evident from the first day. It's hard to explain why they got together. Tracy was an absentee married man and Hepburn had an aversion to marriage, whether from her earlier failure, her sexual preferences or, as she told writers, because ‘actors should never marry.; For Tracy's part, perhaps at 41 (to her 34) he wanted to trade affairs for a more permanent—but still illicit—relationship. Hepburn knew that Tracy was an alcoholic; mothering the recalcitrant drunk fulfilled some need for her. Whatever the reason, by the time shooting ceased in October 1941, the two were a couple.
“Strickling had an odd challenge with the Tracy-Hepburn pairing. For the most part, Tracy's indiscretions went unpunished in the press. He was so unfaithful that he appeared faithful. Louise lived in their Encino ranch and Tracy lived in hotels, but they spoke daily, and on most weekends he visited his children. Louise founded the John Tracy Clinic, named for their son (who was born deaf), using a sizeable portion of her own wealth. She raised millions to found research and treatment centers for deaf children. She also served on a variety of charity boards and was a sympathetic figure and a press favorite. Somehow his relationship with Hepburn went uncommented-on.
“At the same time in early October 1941, Strickling received a frantic phone call from Robert Taylor. His arranged marriage to Barbara Stanwyck was bizarre. It wasn't sexual other than experimentally, and he sometimes tested the waters with other women if the mood suited him. Stanwyck bullied Taylor in front of his friends. She once strode into their family room while Taylor had a drink with John Wayne and said, ‘Send your friends home. It's time for bed.’ He meekly complied, shrugging his shoulders.
“During that summer, 1941, Taylor had filmed Johnny Eager with Lana Turner. She made plays for most of her leading men and, Taylor's sexual identity and marital status aside, she went after him. In her memoirs Turner suggested she walked away from the affair because she didn't want to ‘break up a marriage.’ More likely, she walked away when Taylor told Stanwyck of his interest in the younger star. Even though his was a marriage of convenience between friends arranged by their studio, Stanwyck reacted strangely. She tried to kill herself.
“On October 7, 1941, Taylor found her in the bathroom bleeding profusely from gashes in her arms. She had severed arteries in her wrist and forearms and would have bled to death had Taylor not stumbled upon her. Strickling had her quietly taken to Cedars of Lebanon Hospital, the favorite for the MGM doctors. The press was told that Stanwyck was trying to open a jammed window and had accidentally cut herself. In an odd coincidence, Strickling would use the same excuse after a 1952 suicide attempt by Lana Turner.”
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Today's encore selection -- from Citizen Coke: The Making of Coca-Cola Capitalism by Bartow J. Elmore. Sugar and the 5¢ Coke: "It is no small wonder, then, that Coke's first customers loved, even craved, a daily dose of Coca-Cola. After all, Pemberton's original formula called for over 5 pounds of sugar per gallon of syrup. At the turn of the twentieth century, each 6-ounce Coca-Cola serving contained more than four teaspoons of sugar, a concentration that would likely have overloaded consumers' taste buds were it not for the high concentration of acids that helped to balance Coke's flavor profile. (Today, phosphoric acid makes Coca-Cola syrup's pH so low that trucks transporting the concentrated mixture require hazardous material placards to be in compliance with federal transportation laws.) Pemberton had come up with the perfect sugar delivery system, one that made people feel good without overwhelming the tongue. As a result, by the mid-1910s, Coke was the single largest industrial consumer of sugar in the world, funneling roughly 100 million pounds annually into customers' bodies. All that sugar cost Coke money, and since its founding, the company had scoured the world, seeking out suppliers that could offer the lowest prices for its most important ingredient.
"Without cheap sugar, Coke had no business. The company made its millions selling an inexpensive, nonessential beverage in volume, and it could only turn a profit on bulk sales if it kept raw material costs down, especially for sugar, its most expensive ingredient by far. Customers simply were not willing to pay a premium price for soft drinks. Remarkably, from 1886 to 1950, Coca-Cola maintained a 5-cent price for its beverage. This was due in part to Coke chairman Robert Woodruff's constant vigilance. He insisted that company bottlers and soda jerks maintain this price for Coke, even when operating expenses increased, and he spent millions on advertisements featuring Coke's nickel price in an attempt to ensure local bottler and retailer compliance with his policy. In the 1930s, when Coke began a concerted campaign to sell its beverages in coin-operated vending machines that only accepted 5-cent coins, Woodruff had an added incentive to preserve the nickel policy. Technology dictated that any price increase in Coke would require a jump to 10 cents in order to meet single-coin vending machine requirements, a change, executive Ralph Hayes noted, that would have been 'murderous' to the company."
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