[Note: In the following excerpts from the works of Ludwig von Mises, American readers must keep in mind the differences in terminology which are sometimes encountered between the way Americans use political labels today and the way those same words were used by Nineteenth Century and early Twentieth Century European scholars such as Mises. For example, the term "liberal' does not here refer to the Big-Government, welfare-statist tax-and-tax, regulate-and-regulate, and spend-and-spend modern American "liberalism" which characterizes political life in the United States at this time and which is advocated most avidly by the U.S. Democrat Party. Quite the contrary, what Mises means by "liberalism" is cfassical liberalism -- the system of limited constitutional government, politically unhampered markets, scriupulous respect for private property, and freedom for the adult individual who lives at peace with his neighbors. In the United States, these ideals are generally called "conservatism" or libertarianism today as the U.S. has strong classical liberal traditions and institutions including the Constitution, the Bill of Rights, private ownership of property, free enterprise (in earlier times of our history at least), respect for the rule of law, etc. When Mises extols the benefits of what he calls "liberalism" here, he does not mean the Big-Government authoritarian leftism of modern American liberalism as demanded by such politicians as Teddy Kennedy, John Kerry, Albert Gore, Barbara Boxer, Maxine Waters, Nancy Pelosi, or the Clintons, but rather the free and open society that emerged as a result of imposing on government (both kings and parliaments) constitutional and legal restrictions -- and especially the general policy of laissez faire with respect to non-violent activities of production and trade -- so that individual freedom and enterprise could thrive without coercive interference.]

We call the social apparatus of compulsion and coercion that induces people to abide by the rules of life in society, the state; the rules according to which the state proceeds, law; and the organs charged with the responsibility of administering the apparatus of compulsion, government.

There is, to be sure, a sect that believes that one could quite safely dispense with every form of compulsion and base society entirely on the voluntary observance of the moral code. The anarchists consider state, law, and government as superfluous institutions in a social order that would really serve the good of all, and not just the special interests of a privileged few. Only because the present social order is based on private ownership of the means of production is it necessary to resort to compulsion and coercion in its defense, [they claim}. If private property were abolished, then [they assume] everyone, without exception, would spontaneously observe the rules demanded by social cooperation.

It has already been pointed out that this doctrine is mistaken in so far as it concerns the character of private ownership of the means of production. But even apart from this, it is altogether untenable. The anarchist, rightly enough, does not deny that every form of human cooperation in a society based on the division of labor demands the observance of some rules of conduct that are not always agreeable to the individual, since they impose on him a sacrifice, only temporary, it is true, but, for all that, at least for the moment, painful. But the anarchist is mistaken in assuming that everyone, without exception, will be willing to observe these rules voluntarily. There are dyspeptics who, though they know very well that indulgence in a certain food will, after a short time, cause them severe, even scarcely bearable pains, are nevertheless unable to forgo the enjoyment of the delectable dish. Now the interrelationships of life in society are not as easy to trace as the physiological effects of a food, nor do the consequences follow so quickly and, above all, so palpably for the evildoer. Can it, then, be assumed, without falling completely into absurdity, that, in spite of all this, every individual in an anarchist society will have greater foresight and will power than a gluttonous dyspeptic? In an anarchist society is the possibility entirely to be excluded that someone may negligently throw away a lighted match and start a fire or, in a fit of anger, jealousy, or revenge, inflict injury on his fellow man? Anarchism misunderstands the real nature of man. It would be practicable only in a world of angels and saints.

Liberalism is not anarchism, nor has it anything whatsoever to do with anarchism. The liberal understands quite clearly that without resort to compulsion, the existence of society would be endangered and that behind the rules of conduct whose observance is necessary to assure peaceful human cooperation must stand the threat of force if the whole edifice of society is not to be continually at the mercy of any one of its members. One must be in a position to compel the person who will not respect the lives, health, personal freedom, or private property of others to acquiesce in the rules of life in society. This is the function that the liberal doctrine assigns to the state: the protection of property, liberty, and peace.

The German socialist, Ferdinand Lassalle, tried to make the conception of a government limited exclusively to this sphere appear ridiculous by calling the state constituted on the basis of liberal principles the "night-watchman state." But it is difficult to see why the night-watchman state should be any more ridiculous or worse than the state that concerns itself with the preparation of sauerkraut, with the manufacture of trouser buttons, or with the publication of newspapers. In order to understand the impression that Lassalle was seeking to create with this witticism, one must keep in mind that the Germans of his time had not yet forgotten the state of the monarchical despots, with its vast multiplicity of administrative and regulatory functions, and that they were still very much under the influence of the philosophy of Hegel, which had elevated the state to the position of a divine entity. If one looked upon the state, with Hegel, as "the self-conscious moral, substance," as the "Universal in and for itself, the rationality of the will," then, of course, one had to view as blasphemous any attempt to limit the function of the state to that of serving as a night watchman.

It is only thus that one can understand how it was possible for people to go so far as to reproach liberalism for its "hostility" or enmity towards the state. If I am of the opinion that it is inexpedient to assign to the government the task of operating railroads, hotels, or mines, I am not an "enemy of the state" any more than I can be called an enemy of sulfuric acid because I am of the opinion that, useful though it may be for many purposes, it is not suitable either for drinking or for washing one's hands.

It is incorrect to represent the attitude of liberalism toward the state by saying that it wishes to restrict the latter's sphere of possible activity or that it abhors, in principle, all activity on the part of the state in relation to economic life. Such an interpretation is altogether out of the question. The stand that liberalism takes in regard to the problem of the function of the state is the necessary consequence of its advocacy of private ownership of the means of production. If one is in favor of the latter, one cannot, of course, also be in favor of communal ownership of the means of production, i.e., of placing them at the disposition of the government rather than of individual owners. Thus, the advocacy of private ownership of the means of production already implies a very severe circumscription of the functions assigned to the state.

The socialists are sometimes wont to reproach liberalism with a lack of consistency, It is, they maintain, illogical to restrict the activity of the state in the economic sphere exclusively to the protection of property. It is difficult to see why, if the state is not to remain completely neutral, its intervention has to be limited to protecting the rights of property owners.

This reproach would be justified only if the opposition of liberalism to all governmental activity in the economic sphere going beyond the protection of property stemmed from an aversion in principle against any activity on the part of the state. But that is by no means the case. The reason why liberalism opposes a further extension of the sphere of governmental activity is precisely that this would, in effect, abolish private ownership of the means of production. And in private property the liberal sees the principle most suitable for the organization of man's life in society.

Liberalism is therefore far from disputing the necessity of a machinery of state, a system of law, and a government. It is a grave misunderstanding to associate it in any way with the idea of anarchism. For the liberal, the state is an absolute necessity, since the most important tasks are incumbent upon it: the protection not only of private property, but also of peace, for in the absence of the latter the full benefits of private property cannot be reaped.

These considerations alone suffice to determine the conditions that a state must fulfill in order to correspond to the liberal ideal. It must not only be able to protect private property; it must also be so constituted that the smooth and peaceful course of its development is never interrupted by civil wars, revolutions, or insurrections.