Szasz and Mises

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My first reaction when anyone criticizes Ludwig von Mises is to bristle. What do you mean by saying that my professor, my mentor, was wrong? Then I stop, look, listen, read, and reconsider. After all, Mises could have occasionally misspoken; he could have been misinterpreted; or, although I find it hard to accept, he could have even been wrong. I have read and reread Thomas Szasz’s article (“Mises and Psychiatry,” February) and believe it is a mix of all three. Szasz says that Mises appears to accept the view of psychiatry that insanity is an illness. And Szasz calls psychiatry (and psychoanalysis, through its alliance with psychiatry) “a form of statist pseudo-liberationism” and”the most dangerous form of statism.”

According to Szasz, “the standard psychiatric mythology” maintains· that individuals who are classified as “insane,” though innocent of lawbreaking, ought to be deprived of liberty and responsibility and incarcerated in a prison, even if that prison is called a “hospital.”

Szasz says that by failing to draw a line between sanity and· insanity Mises opens the door to classifying a man· as “mentally disabled” by “the mere fact that [he] shares erroneous views and acts according to his errors.”

And, if I understand Szasz correctly, he argues that is precisely what Freud did, and that that was why Mises admired Freud.

I admit that Szasz has legitimately called Mises to task for occasionally using the jargon of psychiatry, perhaps without fully realizing the significance of what he was saying. I can- not even understand what Mises meant in some instances, for instance in writing about the “Fourier complex.” However, I disagree with Szasz on all four counts listed above: (1) that Mises accepted the view of psychiatry that “insanity” is an illness, (2) that those classified as “insane” should, on that account alone, be incarcerated, (3) that persons who believe and act on erroneous ideas should be labeled “mentally disabled,” and (4) that Freud’s classification of persons on the basis of their erroneous ideas was why Mises admired Freud.

Inside the Mind of Mises

Szasz quotes Mises’ Human Action: “Man is a being capable of subduing his instincts, emotions, and impulses … He is not a puppet of his appetites . . . . Human action is necessarily always rational. The term ‘rational action’ is, therefore, pleonastic and must be rejected as such” (Human Action, pp.16, 19; Szasz emphasis added). And Szasz even states that these ideas of Mises on the purposiveness of human action “have formed the basis for [his, Szasz’s1views on ‘mental illness’ and psychiatry.” Szasz does not specifically say so in this article, although I believe he has elsewhere, that “he who acts antisocially,” that is he who aggresses against the life or property of another, should be penalized for that act· under the law; irrespective of whether or not he is considered “insane” or “mentally disabled.” This, I believe, was Mises’ view also. As a matter of fact, Mises wrote, in one passage quoted by Szasz, “To punish criminal offenses committed in a state of emotional excitement or intoxication more mildly than other offenses is tantamount to encouraging such excesses.”

Most people may consider the ideas of some persons and their reasons for acting strange, unusual, wrong, insane. But after all, in the view of both Mises and Szasz, he is a rational human being and, thus “capable of subduing his instincts, emotions, and impulses.” Although he should not be punished for his ideas, he should be held liable under the law for any aggressions against others.

The Thin Psychiatric Line

Szasz says that the “line between sanity and insanity” determines “which individuals. innocent of lawbreaking” will be “deprived of liberty and responsibility.” Is it really true that “psychiatry (and psychoanalysis, through its alliance with psychiatry)” have become such an overpowering form of “statist pseudo-liberationism,” that it even deprives

Szasz has legitimately called Mises to task for occasionally using the jargon of psychiatry, perhaps without fully realizing the significance of what he was saying. I cannot even understand what Mises meant in some instances.


persons of liberty and responsibility who are “innocent of lawbreaking”? Is it really true, as Szasz says, that “persons considered insane are incarcerated in mental hospitals” even if they have committed no antisocial act, have not been violent against themselves or others, have been managing their own affairs or were being cared for by willing friends or family members, and have expressed their odd, different, “insane,” ideas only peacefully? Is it really true that persons whose ideas “ought to be viewed as the right to be wrong” are actually considered /I insane” and are “incarcerated,” i.e. imprisoned, in mental hospitals? Does psychiatry really incarcerate such”insane” but innocent individuals? If so, this is certainly a strong indictment against psychiatry. But not against Mises. Szasz says that Mises should have known about this situation. But that I cannot say.

Quoting from my notes on a Mises’ lecture: “The great contribution of Freud and of his predecessor, Breuer, consisted of explaining that even the behavior of lunatics and neurotics was guided by the desire to attain certain ends, just as is the behavior of everyone else.” Every action a .person takes, Mises pointed out, is always conscious, purposive, intentional, aimed at some particular goal or end. And every action stems from the ideas a person holds. And this applies not only to so-called”normal” or ordinary people but also to those society classifies as “insane.” “Before Freud, people said neurotics were simply running around aimlessly but he showed that these people too wanted to achieve something.” The difference is just that those called “insane” act on the basis of ideas others consider strange, abnormal, incomprehensible, even wrong.

“On the borderlines of every scientific doctrine there are doctrines that are the results of undigested ideas. On these fringes there develop some ideas which are untenable. . . . Materialism assumed that ideas in the human mind were created by material conditions [deformities in the brain, bodily secretions, etc.]. The position of psychoanalysis was precisely the opposite of this materialism. The great fact of psychoanalysis is that psychic phenomena can bring about physical changes in men. Breuer discovered that a girl was paralyzed because of psychic conditions. Medical doctors had not been able to discover the cause. This was fifteen years before Freud’s fame.”

Mises wrote that the availability of free government health care has led to a new disease because of the ideas it has generated in the minds of some people. “Social insurance has thus made the neurosis of the insured a dangerous public disease. Should the institution be extended and developed the disease will spread.” If a person believes he is sick, the idea, the belief, may actually make him sick. “Being ill is not a phenomenon independent of conscious will and of psychic forces working in the subconscious. . . . A special disease, traumatic neurosis, which had already appeared in some cases as a result of the legal regulation of claims for compensation for injury, has been thus turned into a national disease by compulsory social insurance…. [T]o feel healthy is quite different from being healthy in the medical sense.” Similarly, if a man believes he is the king of Siam, it may not make him king, but it may make him act as he thinks the king of Siam would act. Irrational as his actions may appear to those who do not share his delusion, they are rational from his point of view. They make sense to him.

What Is Science?

In Szasz’s view, the term”science” should be restricted to the hard (physical) sciences. That is, of course, a matter of terminology, a definitional question. Anyone may define the

In Szasz’s view, the term “science” should be restricted to the physical sciences. That is a definitional question. For Mises, praxeology, like geometry, was a science, a science of logic.


terms he uses as he wishes, although it is helpful when communicating with others to use definitions others accept, or to be very careful to clearly define one’s terms. For Mises, praxeology, like geometry, was a science, a science of logic. Mises considered praxeology a science because it reasoned logical step by logical step from the basic a priori fact that men act. Economics, according to Mises deals with the fact that men act, not with their reasons or motives. Reasons and motives, he said, belong to the realm of psychology.

Mises called”action” a priori “because it is so fundamental that we cannot otherwise conceive of life as we know it in the world in which we live. Mises’ reasoning then proceeded logically from one conscious, purposive, intentional, action taken to remove a “felt uneasiness” (Mises’ term) to another, from acting to exchange one situation or thing for another situation or thing, and from one action to attain a certain end, chosen according to the actors personal subjective values, to another action to attain another end. The conclusion reached at each stage in this logical procession is just as true and just as incontrovertible as a law in the hard sciences. For instance, the economic law of returns (diminishing or increasing) and the economic law of price, commonly known as the law of supply and demand, both arrived at by logical reasoning, are just as true and just as incontrovertible as the geometric law, also arrived at by logical reasoning, that a straight line is the shortest distance between two points, or just as true and as incontrovertible as the physical law·of gravity. It is through this process of reason and logic that the economist explains all economic phenomena – prices (ratios between the relative subjective values of traders), money (a commodity taken in trade in lieu of barter, to use later to obtain what the trader wants). Further steps in logic explain banking, credit, monetary manipulation, and the effects of the interference by force through government regulations and controls, etc.

It is true, as Szasz says, that Mises did not consider drug addiction a disease. He did not deny that the use of habit-forming drugs such as alcohol, opium, and morphine could be dangerous, but he considered government attempts to prevent their use even more dangerous. “If one abolishes man’s freedom to determine his own consumption, one takes all freedoms away.” However, Szasz quotes from Mises’ Omnipotent Government (1944) to show that at least at one time Mises had actually advocated using the force of government to stem the drug traffic “The League of Nations may continue to combat contagious disease, the drug traffic, and prostitution.” Before coming to the United States in 1940, Mises had spent almost six years living and teaching in Geneva, Switzerland. There he had been able to observe at close hand how the League operated and he had become pretty much disillusioned as to its ability to fulfill its original intent – the promotion of peace. I interpret Mises’ 1944 statement about the League of Nations as an indication of his complete disaffection with the League; he expected nothing more from it than busywork such as accumulating statistics and combating “contagious diseases, the drug traffic, and prostitution.”


Szasz is certainly correct in calling attention to Mises’ faux pas when he stepped outside his field of expertise. Other notables have made similar mistakes – Einstein spoke on behalf of socialism and Henry Ford crusaded at one time against what he saw as an “international Jewish conspiracy.” In spite of Mises’ 1927 remark that opposition to liberalism comes from “a pathological mental attitude” which “cannot be reached by resort to the method of reason,” he did not recommend treating such persons as “sick” or “insane.” He continued throughout his life to advocate the use of persuasion by “resort[ing] to the method of reason.” Shortly after the First World War ended, he spent hours debating and arguing with OUo Bauer, the leading Austrian socialist of that day, to keep Bauer from implementing his program for the radical socialization of Austria. As a matter of .fact, in the very same section of Liberalism quoted here, Mises stressed the importance of using rational arguments to reach neurotics. The neurotic adopts a delusion to make life more bearable, Mises says, because he cannot endure life in its real form. But it is not enough to demonstrate the absurdity of his delusion. “[T]he patient himself must overcome it. He must learn to understand why he does not want to face the truth. . .. Through self-knowledge, he must learn to endure his lot in life without looking for a scapegoat on which he can lay all the blame, and he must endeavor to grasp [by study and understanding] the fundamental laws of social cooperation.”

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