Freedom, Society, and State - Ludwig von Mises Institute

tion for the phenomenon of imperialism. This does not
mean that either libertarians in general or the free
mar keta narc his t sin pa r tic u I a r den y the ex i s tenceo f
imp e ria 1 ism. On the con t r a r y, thereappea r s t 0 bege neral
agreement that imperialism does exist, although
there is nothing resembling what can be termed "the
libertarian theory of imperial ism." In fact, three
dis tin c t v e r s i on s can bed i s c ern ed, all 0 f wh i c h ,
ass umin g the val i d i t Y 0 f Say' s Law, see the mo t i ve
for ceof impe ria lism not inthe rna r ke.t but inthesta t ­
ist restrictions on the market.
1. THREE THEORIES OF IMPERIALISM
General overproduction might be impossible. But
i n t e r fer e n c e wit h the rna r ke t proc e s s dis r up t s the i nformation
flow of the price mechanism, resulting in
shortages of some goods and unsaleable surpluses of
o the r s • Sma 1 I erna t ion s are 1 imit e d to a 11 ow ing t he
economy to falter, abandoning the interventionist policy
and perm itt i ng the painful readjustment process to
take place, or attempting to stimulate the economy
through further domestic interventionist measures. But
the larger and stronger nations have an important additional
option: imperialism and aggressive nationalism.
There are three types of domestic intervention that
libertarians see as having imperialistic ramifications.
a. Autarky.
Libertarians argue that interference with the
pr ice mechanism of the market has international ramificat
ions which push the interventionist nation toward
aut ark y, i. e ., a pol icy 0 f nat ion a lee0 nom i c self ­
sufficiency. Regardless of whether the government intervened
to benef i t the workers, the consumers or the
entrepreneurs the effect is the same: prices for some,
or in certain circumstances all, goods are forced above
their would-be market prices. If wages are raised
abovet h e irmar ketIevel s the i mme d i ate impact will be
to raise production costs, thereby reducing the income
oft h e e n t rep r e n e u r s . T his will d r i vethe rna r gina 1
producers out of business and discourage additional inves
tmen tin t hos e fields. The resul t ing reduct ion in
output wi 11 then cause the prices in those fields to
r i s e . T h us, go v ern men tin t e r ven t ion to hoi d wa gesup
wi 1 1 have the same effect as attempts to hold prices up
for the benefit of businessmen: domestic prices at
above world-market levels. Efforts to hold prices down
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