Freedom, Society, and State - Ludwig von Mises Institute

t his recur r i n g s p e c t a c I e of increasing inventor i e s of
unsaleable goods that is largely responsible, according
to these theorists, for the persistent popularity of
the overproduction doctrine. But if the libertarians
are correct, these periodic "surpluses" are not the
res uIto f g e n era I 0 ve r pro due t ion but 0 f rna linves tmen
t, wh i chi n t urn 0 c cur s not fro m the rna r ke t but
from the government spawned inflation.
But Hagel points out that it is. no.t the objective
causes of the business cycle but the subjective percept
ion s 0 fit by the pol icy rna ke r s t hat de t e r mine what
the pol icy wi 11 be. "Since rapid expansion of foreign
investment characterized the earlier period of economic
pro s per i t y, itis not sur p r i sing ," he says, "that rna ny
draw the conclusion that expansion abroad provides the
key to renewed domestic prosperity." Thus, "foreign
markets are mistakenly perceived as an essential 'safety
valve' which will permit an indefinite postponement
of that period of readjustment."
The s eli be r tar iansse e con sidera b 1e his tor i ca I
support for this variant of the imperialistic dynamic.
I ntheye a r s p rio r tot h e 0 u t b rea k 0 f the Span ish-
American War in 1898 America was mired in the throes of
the worst depression it had experienced up to that
tim e • The cry was r a i sed t hat wh a t wa s neede d we r e
"new outlets for American capital and new opportunities
for American enterprise."(20) It is not generally recog
n i zed t hat Roo s eve 1 t f S New De a I pol i c i e s fa i 1edt0
revive the American economy during the 1930's. Unemployment
was at a height of 14.6 percent even as late
a s 1 9 4 O. Con seq u e n t 1Y, itis a r g ued, Ro 0 s eve I t began
to look at war and foreign expansion as a cure for the
economic difficulties. As New Left historian Robert F.
Smith noted, "the New Deal recovery program was based
par t 1 Y u P0 ntherecover y and ex pans ion 0 f for e i gn rna r ­
kets."(30) Hence, the expansionist policies of Japan
and Germany were viewed with increasing fear.
d. Imperialism and Popular Support.
If the individualist anarchists are correct, the
chief beneficiaries of the combined policies of domestic
intervention and foreign imperialism are the elite.
And since a policy of domestic intervention is believed
to restrict output, create unemployment and lower the
standard of living, and since imperialism is often
accompanied by blood shed by the common man, the majori
ty would seem to be the long run losers. An important
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