The Mises-Hoiles Correspondence: What Might Have Been

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Wendy McElroy
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From 1949 to 1962, two libertarian giants exchanged several letters until a sharp conflict caused the correspondence to cease abruptly. An American entrepreneur and a staunch libertarian-anarchist, Raymond Cyrus (R.C.) Hoiles (1878–1970) established an impressive newspaper syndicate that would eventually become known as Freedom Newspapers, Inc.—the largest libertarian communications network to date. The other, iconic Austrian economist Ludwig von Mises is so well-known as to require no introduction.

(The letters have not been edited except to correct minor points of spelling and grammar. A link to the unedited letters has been provided for full context).

September 7, 1949

On September 7, 1949, Hoiles wrote to Mises via the Foundation for Economic Education (FEE), where Mises was a part-time staff member. Hoiles congratulated him on the recently published English translation of his masterpiece Human Action:

“I think you have furnished complete ammunition to refute any socialist’s or interventionist’s arguments. I have remarked several times that your observation on the causes of the decline of ancient civilizations--a little over two pages--was worth the price of the book to anyone.”

True to his crusty nature, however, Hoiles also told Mises where the book went wrong. The first issue Hoiles raised was one about which he was passionate: the immorality of tax-funded public education. A “rather serious” contradiction occurred on page 872, Hoiles advised:

…where you make this statement: “In countries which are not harassed by struggles between various linguistic groups, public education can work very well if it is limited to reading, writing, and arithmetic.” I have repeatedly contended that even if public education was limited to these branches, the fact that some people were compelled to pay who did not want to have their children taught or who had no children, was teaching by example that the majority had a right to coerce the minority to pay for anything the majority wanted.

This contradicted the rest of the book, Hoiles argued, by promoting the double standard that it was wrong for individuals to initiate force but legitimate for governments to do so.

“Understand,” Hoiles continued, “I am not opposed to the use of force to stop someone from initiating force, but... the only purpose of a government is to stop people from intervening in an unhampered market and to stop people from initiating force.” Hoiles called the error “so serious that I think you should have a little slip printed up correcting this and have it put in the back of the book.” Hoiles considered this to be such a grave matter because “public schools are bound to destroy the country because they create public opinion that sanctions and endorses government intervention in an unhampered market.” 

Hoiles enclosed a check for $90 to buy 9 copies of Human Action for his columnists to read. He also included an article entitled “Public Schools and Unemployment” which he claimed was “in complete refutation of your statement that ‘public schools can work very well if they are limited to reading and writing and arithmetic’.”

September 8, 1949

On September 8, Hoiles sent an afterthought letter to address minor issues, which included a copy of a letter from Leonard Read, founder of FEE:

…to a big industrialist friend on how far public education should go...Any education that does not teach the pupil who is learning to read and write that there are certain immutable laws that govern human relations can do a great deal more harm than good. The world would have been better off if such men as Stalin and Hitler and Roosevelt and even Dewey...never had learned to read. They could not have been such successful demagogues if they could not read.

September 23, 1949

On September 23, Mises responded with the courtliness for which he was renowned. After thanking Hoiles for his “kind appreciation of Human Action,” Mises went straight to the “difference of opinion” between them:

I want to emphasize that I did not express any opinion...of whether or not public education, when limited to the three R’s, is a good or a bad thing. I merely stated the fact that it can work very well in countries not harassed by struggles between various linguistic groups. Why it is a disintegrating factor in countries in which there prevails a struggle between linguistic groups I pointed out in 1919 in my book Nation, Staat und Wirtschaft, and then again in 1927 in my book Liberalism, pages 100-102. (These two books are not available in English-language translations.) I omitted in Human Action any reference to this problem because it has no application to present-day America. I proceeded only to point out why public education, as soon as it begins to deal with matters implying social, economic and political doctrines, leads to an impasse which must transform the schools into instruments of political indoctrination and propaganda.

Thus, Mises foreshadowed the culture wars now raging in public schools.

Next, Mises moved on to Hoiles’s second major objection: the impropriety of majority rule. Mises began, “You question the right of the majority of citizens to make a man pay for what he doesn’t want...” He continued with the observation, “Now it is a fact that the written or unwritten constitutions of all free nations were and are based on the principle of decision by vote of the majority,” with one telling exception: “I know only of one exception, the notorious ‘liberum veto’ of the members of the Polish nobility (before 1791.) It is agreed by all students of history that this ‘liberum veto’ was one of the major causes of old Poland’s downfall.”

Mises next ventured into an area Hoiles knew well and often seemed to treat in a proprietary manner. “The Constitution of the United States as well as the Constitutions of all 48 states have adopted the majority principle,” Mises claimed. “As far as I know nobody ever advocated the substitution of the unanimity principle for the majority principle.” Any objections “raised against those duly promulgated statute laws which you and I both consider as harmful,” he continued, “cannot be justified by recourse to an alleged principle of unanimity. They must be based on the effects to be brought about by such laws. What I tried to demonstrate in my book is that interventionism and socialism are bad because they must inevitably result in the disintegration of social cooperation, in impoverishment, in material and capital decay and in the destruction of our civilization.”

As he did with praxeology—the study of human action—Mises based his analysis of laws on observation and logic, while Hoiles tended to argue the law based on morality, natural rights, and religion. “I do not believe that private control of the means of production and a free market economy are dogmas which must be accepted without proof,” Mises wrote. “I think that it is necessary to demonstrate why they are the only principles which can secure the preservation of a civilized and prosperous community of men. I think that it is necessary to show clearly why the socialists’ and interventionists’ declarations to the contrary are erroneous and why the adoption of their ideas must inevitably spell disaster.”

September 30, 1949

Hoiles’s letter of September 30 is apparently addressed to Mises’s home. In it, the publisher’s bull terrier side emerged:

The English language doesn’t mean a thing if you say you were not expressing an opinion of page 872 where you say: “In countries which are not harassed by struggles between various linguistic groups public education can work very well if it is limited to reading, writing, and arithmetic.” Does not the phrase “works very well” express a good thing, or what does “works very well” mean if it is not an endorsement?

Much of this letter is a restatement of arguments from the two earlier ones, namely, that public education teaches the young that “parents are not responsible for the support or education of their children and that the parents have a right to gang up and make those people who do not want public education pay for it.” Public schools also inculcate by example the beliefs that “we do not need to have a definite limited government, and that if the government has a right to force people to pay for an educational system that they believe will destroy the country, then the government has a right to do anything.”

Hoiles then predictably bristled about the contention that the US Constitution and those of the states “have adopted the majority principle.” Hoiles turned, as he often did in his writing, to “the first official doctrine of the United States government...the Declaration of Independence,” which reads:

All men are created equal, that they are endowed by their Creator with certain unalienable rights, that among these are life, liberty and the pursuit of happiness, --That to secure these rights, government are instituted among men, deriving their just powers from the consent of the governed.

Hoiles drew Mises’s attention to the word “all,” which:

…includes everybody.... Notice also that it [the Declaration] says “deriving their just powers from the consent of the governed.” It does not say from the consent of the majority governed. And the word ‘consent’ certainly meant a voluntary agreement.

A mini lecture from Hoiles on majority rule followed. “If the US Constitution had adopted the majority principle,” he asked, then why did it specify “that each state should have the same number of senators no matter how different the number of people in each state? Then why did the Constitution specify that this condition could not be changed without the consent of every state, let alone the majority of two-thirds?” Hoiles concluded, “I am certainly glad that you didn’t put in your book some of the majority rule ideas” from your letter of September 23rd. “It certainly would have weakened your whole book.”

May 7, 1962

Either Mises did not respond, or his response is not readily available because the next letter leaps forward by 13 years when Hoiles once again wrote both to praise and to chastise Mises. This time Hoiles’s topic was an article by Mises which appeared in the April 3rd issue of Christian Economics under the title “A Dangerous Recommendation for High School Economics.” This piece is now available in Economic Freedom and Interventionism, which is both a primer of Misesean thought and an anthology of 47 of his writings edited by Bettina Bien Greaves.

“You had a splendid representation,” Hoiles opened, “with the exception of one paragraph, which I think greatly weakens your stand.” The Mises paragraph in question commented on a recently issued report:

In order to demonstrate the inferiority of the market economy as against government action, the report takes pleasure in affirming repeatedly that there are things that private enterprise cannot achieve, e.g., police protection and provision of national defense. This observation is entirely irrelevant. No reasonable man ever suggested that the essential function of state and government, protection of the smooth operation of the social system against domestic gangsters and foreign aggressors, should be entrusted to private business. The anarchists who wanted to abolish any governmental institution, as well as Marx and Engels who muttered about the ‘withering away’ of the state, were not champions of free enterprise....

Hoiles countered:

I happen to know several people who so believe. Robert LeFevre, the founder of the Freedom School...believes that the market place is the best way to protect life and property. F.A. Harper, Orval Watts, my son Harry Hoiles, Rose Wilder Lane, all certainly believe the Declaration of Independence is exactly what it says, because nobody can give a man’s consent but that individual himself.

Hoiles asked:

I cannot help but wonder what you use as a standard to determine whether or not a man is rational; that is, reasonable. You certainly do not use the Declaration of Independence or the Coveting Commandment or the Golden Rule, nor a precise definition of freedom. You seem to have your own interpretation of a reasonable man... I think you are completely out of harmony with the Declaration of Independence.

Hoiles also enclosed an editorial written by Robert LeFevre which was entitled “Democracy with a Small ‘d’.”

May 14, 1962

A week later, Mises referred Hoiles to:

…pages 46-51 of my book Omnipotent Government (1944)... Government is the social institution that has the exclusive power of resorting to violent action in order to prevent individuals from resorting to violence....As I see it, the absence of a governmental police power would result in a state of affairs in which everybody would have continually to defend himself against hosts of aggressors.

Mises noted that LeFevre’s editorial included a quotation from Human Action, but Mises went on to express deep disagreement with the arguments that followed. Mises commented to Hoiles;

I think you err in assuming that your principles are those of the Declaration of Independence. They are rather the principles that led a hundred years ago the Confederate States to refuse to recognize the President elected by the majority. Wherever and whenever resorted to, these principles will lead to bloodshed and anarchy.

May 21, 1962

The correspondence was becoming a clash of views, with little subtlety. Hoiles returned to advocating for the privatization of so-called essential government services. Sounding almost Rothbardian, Hoiles explained:

Insurance companies should take care of the fire department, and insurance companies should take care of protecting your life and property. and if you didn’t like the service the one insurance company was giving you, you would employ another insurance company to help protect your life and property. Of course, there is no such thing as absolute protection, but we’d get more protection by a voluntary basis than by the coercion of the majority.

Hoiles repeated two questions he had asked previously:

Would you have the majority determine what the government should do? If that’s the case, then where would you draw the line? Will you please answer those questions? Or admit that you will be the final arbitrator, and that instead of being governed by principles, you’re the one who is talking about anarchy. We’re getting very close to anarchy now.

Again, Hoiles used a postscript to correct Mises about misusing the word “anarchy” as a synonym for “chaos” when it actually meant “without a head or ruler.” The word anarchy “means that each man is owner of himself and all he produces, not more, no less.” Hoiles accused Mises of scaring people with his misuse of the word “anarchy.” “We are close to chaos now because people do not understand the importance of private property,” Hoiles protested, “and the most important private property anyone owns is himself, his freedom, and all he produces.” In short, he accused Mises of contributing to people’s misunderstanding of private property and, perhaps, of not understanding it himself.

Undated Letter

An undated letter from Mises dismissed the idea of private insurance companies protecting the life and property of their clients because each company would need to organize its own armed force. It was a brief dismissal.

As for the assertions in LeFevre’s article, Mises dwelt on one he clearly thought was absurd, perhaps to impress upon Hoiles the reason why he was not willing to engage in a more serious or lengthy discussion on this topic. Mises had rejected the same argument in his May 14th letter in which he stated,

Mr. LeFevre suggests that every voter should choose the President he prefers and should have this man of his choosing as his President, without any obligations as against those candidates whom other voters have chosen. Is this a workable idea? The President of the U.S. is the commander in chief of the U.S. armed forces and the supreme chief of all federal offices and their personnel. Can these functions be performed by a multiplicity of Presidents?

Clearly, Mises believed the answer was “no.” In fairness, however, the two men were discussing different models of government. Hoiles would not have accepted anyone as the commander in chief of the US armed forces and the supreme chief of all federal offices and their personnel.

In the follow-up undated message, Mises accurately observed that Hoiles had shifted ground somewhat in suggesting that “different Presidents would undoubtedly get together and try to promote, or try to defend, men’s right to property.” But Mises also rejected this differing contention, writing,

May I remark: a) what will happen if they disagree with one another? Will then the majority of this presidential gathering determine the outcome? b) Is it realistic to assume that...the candidate for whom the majority voted will ‘try to promote, or try to defend men’s right to property’?

Mises obviously concluded that further debate would render few benefits. He ended:

Concerning the problems of majority rule I have nothing to add to what I have said in my books Omnipotent Government, on page 50, Human Action, on pages 148-150. Of course, as you think that I do not understand the importance of private property, I have nothing more to tell you.

May 23, 1962

The apparently dauntless Hoiles replied with another enclosed editorial by LeFevre and some remarks critical of Mises. Hoiles opened by reproving Mises for segregating economics from morals—areas that Hoiles believed must be integrated. He enlisted Leonard Read as back-up, writing, “Leonard Read said if he had it to do over again, he would call his organization The Foundation for Moral Education instead of The Foundation for Economic Education.”

After rehashing the definition of anarchism, Hoiles made a lamentable comment:

You are doing so much good that I hate to see you continue to advocate any form of socialism or any form of tyranny. And when you are advocating that the free market is not the better way of protecting men’s lives and property, I think you are seriously in error, if we can judge by man’s historical experience.

June 1, 1962
 

Mises’s final correspondence is terse. He had drafted a reply to Hoiles’s May 21st missive, Mises stated, when he received the one of May 23rd. Enough was enough. Mises’s farewell line to Hoiles: “As you charge me in this letter with advocating socialism and tyranny, I consider it as useless to continue our correspondence.”

June 18, 1962

Perhaps in an attempt to retrieve a relationship he valued, Hoiles opened a letter by acknowledging Mises’s “many honors and degrees,” and declaring his desire “to continue to try to integrate and harmonize my beliefs and make them consistent.” Hoiles wanted to iron out any inconsistencies he might be harboring. As palpable evidence of his sincerity, Hoiles asked, “how much would you charge per answer to questions on your political, economic and moral beliefs, where your answer, to the best of your ability, is to be limited to not over 50 words.”

In a tone deaf manner, a postscript mentioned another enclosure—namely, “a Verifax copy of a letter from Robert LeFevre, stating his thoughts regarding my position in my May 23 letter to you.” I can only imagine Mises’s reaction to knowing his personal correspondence was being passed around for comment.

No further response by Mises, if any occurred, seems to be available.

Quite apart from who was correct or not on specific issues, the Mises-Hoiles correspondence spotlighted and revolved around extreme differences in the personalities of the two men. Hoiles was an overly blunt firecracker of an American Midwesterner; Mises was a courtly European scholar. Some of the points—for example, does anarchy mean chaos? – could have evolved into interesting exchanges but the schism between how each man approached ideas was too wide for this to happen. This is a shame. Since both men placed such a high value on truth, reason, and intellectual consistency, their differences could have been fascinating rather than divisive.