The Kid Who Destroyed Keynesianism

That’s right, a 21 years old boy destroyed keynesianism long ago. In 1947 Murray Newton Rothbard, born in 1926, wrote an amazingly good and direct critique of keynesianism. Some of the arguments he used were not his own creation, but others certainly were. Despite this the article is brilliant. Here is young Rothbard vs The Big "K". Let's see what he thought.

"K"eynesianism working

These are the two fundamental pilars of the elemental keynesian model.

1) The constant consumption and investment functions 

Let's start with the basic keynesian 101:

Aggregate Income = Aggregate Expenditures

You know, this means that “your spending is my income” and all that...

Let’s put an example:

E = Y = C + I

C = 0.9Y

Y = 0.9Y + I

We see that the 0.90 is fixed, so consumption (C) is passively determined just by income (Y). The “pasive” factor is 0.90, usually called “marginal propensity to consume”, thus consumption is determined by income. 

However investment (I) is not determined by Y. Whatever determined it, was not important (Animal spirits? Expectations? Interest rates?). The important thing is that it was not income (Y).

All we have to do now is to use basic math to isolate Y:

Y = 0.9Y + I -> Y - 0.9Y = I -> 0.1Y = I -> Y = 10I

Income is equal to 10 times investment or in other words income is 10 times the element which is not dependent of  Y.  

If we include goverment in this model, then we must include government expenditure or G.

Y = C + I + G

Y = 0.9Y + I + G

Now, government G has two features: 1) +G means a deficit and -G is a superavit and 2) G is also independent from Y. Notice that, from the point of view of this model, private investment (I) and government spending (G) are both independent or "autonomous" from Y, and both have the same economic effects. Assume Y = 100, then C = 90, S = 10 and I = 10. Where S = savings and there is a balanced-budget government (G = 0, there is neither deficit nor superavit).

100 = 90 + 10

In this "equilibrium" the aggregate of firms and consumers are satisfied. Now government has a deficit of 10 or investment increases in 10, it is exactly the same, so we get: 110 = 90 + 20.

Now I = 20, why Y is not 200? Because the above equation is a disequilibrium situation, the automatic-multiplier process is not over yet. Now with that income 110, consumers will spend 99 in consumption and will save 11. Notice that investment is 20 and saving is 11 right now, so I>S and the economy (Y) is expanding (from 100 to 110). But is not over yet: Business are happy seeing people spending 99 instead of 90, so firms pay income 99 + 20 = 119. And now again consumers receive 119 income so they consume 107 and save 12. Firms are even more happy because they expected 99 and they are getting 107, so they pay 107 + 20 = 127. The process continues and ends when Y = 200, C = 180, I = 20 and S = 20. Finally S=I, income has grew enough to make saving equal to investment.

200 = 180 + 20

Rothbard says: "It is important to notice that equilibrium was reached in both cases when aggregate investment = aggregate saving... When investment is greater than saving, the economy expands and national income rises until aggregate saving equals aggregate investment. Similarly, the economy contracts if investment is less than saving, until they are again equal"

Here is the key for this process to work: "two very important things must remain constant in order that equilibrium be reached.":

a) The consumption function (and therefore the savings function) 

b) The level of investment (independent from income)

2) The level of income as determining the volume of employment

Assuming all this constant: a) technology, b) efficiency, quantity and distribution of all labor, c) quantity and quality of capital, d) distribution of income, e) relative prices, f) wage rates, g) consumer tastes, h) natural resources, i) economic and political institutions... Then!, we can say that to every level of national money income there corresponds some definite and unique level of employment. The higher the money income the higher the level of employment. But income can be at equilibrium at a level not corresponding to "full employment" and according to keynesians, there is no reason to assume that the level of income determined in market economy coincides with the volume of employment considered as the "full-employment" level.

"K"riticism

1) The constant consumption and investment functions

a) The static problem: The aggregate method hides the fact that they cannot remain constant. The keynesian model fails because uses aggregates that are meaningful in the arithmetic world to operate, not in the real world. The aggregative construction of the model made us believe that in some equilibrium situation the aggregate of firms and consumers are satisfied because their expectations are fulfilled. The fact that a single firm receives just what expected does not mean that it is in equilibrium. Inside the aggregate there are firms losing money and other making great profits, others making moderate profits and great loses. Even assuming that the loses of one group cancel the profits of other group, every single firm will make its own adjustments investing more or less according to their valuations. The aggregative form of the model hides all this. Investment cannot remain at 10, it cannot remain constant and the consumption function also will not be constant, all this will change the level of income. The aggregate nature of model does not tell us in what direction or how far this variables will move.

b) The dynamic problem: They cannot remain constant when economy is expanding. Even assuming the first criticism is wrong and both can be constant in the static state, they cannot remain constant in the required time in which economy is expanding. When aggregate investment is greater than aggregate savings, economy expands to a level of income where they are equal. But in the very process of expansion, consumption function (and savings) and investment cannot remain constant. In an expanding economy there will be profits that will be distributed among firms in an unknow way making necessary some adjustments and changing in investment, the model of course says nothing about this. And new firms will enter the economy in expansion, changing again the level of investment. But besides, the distribution of income in an expanding economy also necessary changes and so it does the consumption function, which will change in an unknown direction and magnitud. The model does not say anything about that changes. Capital gains in firms of the expanding economy also changes consumption function.

c) Indeterminacy: As both are not constant, the level of income in the system is indetermined. Since the two basic determinants of income, the consumption function and investment, cannot be constant, they cannot determine any level of income, not even approximately. "There is no point toward which income will move or at which it will tend to remain. All we can say is that there will be a complex movement in the variables of an unknown direction and degree." Not only the model fails, it is also useless. 

d) Aggregation fail: The model fails due to its aggregation level denying individual things. The aggregative concepts of keynesian model are misleading because leaves out other important individual things. Consumption is not just a function of income, it also depends on past income, expected income, the phase of business cycle, lenght of time, prices of goods, capital gains or losses, cash balances, etc.

e) Ignores interdependency of the economic system: By splitting into a few aggregates, the model assumes they are independent from each other, that are determined independently and that they change independently. Saving is not independent from investment, firms save in anticipation of future investment. Anticipations of profitable investments influence savings function and hence consumption function. Investment is also influenced by level of income, the expected level of future income, anticpation of consumption, by the flow of savings, etc. The assumption that state just adds or substracts income by deficits or superavists is also false because it ignores interdependence between aggregates. Investment will not remain constant, if state tax to encourage consumption then savings will fall affecting investment. If state tax profits, that will also modifies investment. Consumption and investment are determined by complex interactions between and within them.

f) Statistical problem: There is no stable consumption function. Keynesians have been, as far as 1947, completely unsuccessful in proving statistically a stable consumption function. Consumption changes with the month of the year, the business cycle, in the long run, habits, family income, expected changes in income, etc. This is the final nail in the coffin for the income determination of keynesian system.

2) The relationship between income and employment

a) Hyper-short-run assumption: The constancy assumptions needed for this relation to exist are only possible in a very short period of time. The only way for all that variables to be constant or "given" is during a fraction of a second. During that minimum amount of time, they are certainly "given". During a millisecond it is absolutly true that all that variables are constant. 

b) Extending short-run assumptions to the long-run: Keynesians use this very short-run relation to predict. They use this model based on very short-run and unreal assumptions on periods of time far longer than them and that makes them fail. Like keynesians predicting a very hight unemployment after WWII. 

c) Money wage rates constancy: The essence of keynesian theory rests on this assumption. The keynesian "underemployment equilibrium" depends on this. Now the fact that if a price does not fall enough to "clear" the market was neither new nor original. And if wages do not fall due to state privilege unions then it is the state what is creating "underemployment equilibrium", not the market. So the basic keynesian tenet that nothing in free market assures full employment equilibrium collapses.

d) Confusing wage rates and wage income: Keynesians think that wage cuts reduce spending because of this confusion. When keynesians think about wage cuts, they do not see that when this happens hours worked and quantity hired also increase (varying from industry to industry). So total payroll increases, and also demand. Keynesians confuse wage rates (wage per hour) with wage income (wage rate multiplied by time in which wage is earned).

"K"onclusion

We saw that young Rothbard already knew what later would became one of the most demolishing criticism of keynesianism ever made. In MES he updated and improved above criticisms, but it is amazing that such a young boy could have destroyed what was the paradigm of his own Age. 

NOTE: In a very interesting footnote, Rothbard shows that at his 20's, he was not an anarchist yet: “This does not imply that democracy is evil. It means that democracy should be considered as a desirable technique for choosing rulers competitively, so long as the power of these rulers is strictly limited.”

Mises the Fascist: What Is Seen (an “argument”) And What Is Not Seen (the ridiculousness)

How many times have you heard the “Mises was a Fascist” argument? This is the easy way in which some left supporters disposes an opponent in many occasions: calling everything and everyone that is non-left, a right-extreme (Fascist or Nazi) without convincing evidence, just because is easiest to label than to argue. Well, this case has been refuted many times by excellent authors[1], but the best and total refutation is Raico’s excellent book[2].



One of definitions of stupid is “Tending to make… careless mistakes” or “ trivial, silly, or frivolous”. In the case of “Mises the Fascist” argument it fits very well. I have entitled this post following Bastiat because in every forum, blog, comment section or even alleged “serious” academic publications or books, is present the same pattern of silly and ridicule form of argument. 

1. The Quoting Out of Context Fallacy

The left usually use this kind of fallacy to win a debate, and the case of Mises is almost a textbook example. But let’s be fair. It is perfectly possible for non-left people (austrians, libertarians, right-conservatives, Fascists, etc.) to appeal to this fallacy too on this or other issues. In each case it must be demonstrated in which way it has been used and after that it must be denounced. Now let’s go to Mises’ case: Every anti-austrian will show this phrase from Mises:

“It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history.”[3]

If you actually look for that phrase, the first thing you will notice is that it is the last phrase of an entire section. What did Mises say in the whole previous section? The section is called “The Argument of Fascism” and in it you have things like this:   

“The fundamental idea of these movements—… Fascist—consists in the proposal to make use of the same unscrupulous methods in the struggle against the Third International as the latter employs against its opponents...

The great danger threatening domestic policy from the side of Fascism lies in its complete faith in the decisive power of violence. In order to assure success, one must be imbued with the will to victory and always proceed violently. This is its highest principle...

For Fascism does nothing to combat it except to suppress socialist ideas and to persecute the people who spread them. If it wanted really to combat socialism, it would have to oppose it with ideas. There is, however, only one idea that can be effectively opposed to socialism, viz., that of liberalism...

Repression by brute force is always a confession of the inability to make use of the better weapons of the intellect—better because they alone give promise of final success. This is the fundamental error from which Fascism suffers and which will ultimately cause its downfall...

So much for the domestic policy of Fascism. That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion...” (bold and italics are mine)

Fascists are just a group of violent reactionaries to soviet communism, without any sustainable idea, all they can do is to oppose by force using the same methods as russians. Mises is almost tiring in asserting that to combat communism, violence is totally useless. It is in the camp of ideas where they will be defeated. 

As Raico has brillantly refuted: The first extract has came from a chapter dedicated to ATTACK fascism.[4] Mises has never endorsed fascism. Yes, you read me right: Mises has never endorsed fascism. He clearly pointed out that it is an anti-liberal ideology close to Bolsheviks.

In order to demonstrate how ridicule, dishonest and stupid arguers (see the dictionary definition above) are those who use this kind of fallacy, let's apply it to another author. Who said this?:

"The bourgeoisie has disclosed how it came to pass that the brutal display of vigour in the Middle Ages, which reactionaries so much admire, found its fitting complement in the most slothful indolence. It has been the first to show what man’s activity can bring about. It has accomplished wonders far surpassing Egyptian pyramids, Roman aqueducts, and Gothic cathedrals; it has conducted expeditions that put in the shade all former Exoduses of nations and crusades... The bourgeoisie, by the rapid improvement of all instruments of production, by the immensely facilitated means of communication, draws all, even the most barbarian, nations into civilisation. The cheap prices of commodities are the heavy artillery with which it batters down all Chinese walls, with which it forces the barbarians’ intensely obstinate hatred of foreigners to capitulate. It compels all nations, on pain of extinction, to adopt the bourgeois mode of production; it compels them to introduce what it calls civilisation into their midst, i.e., to become bourgeois themselves. In one word, it creates a world after its own image... The bourgeoisie, during its rule of scarce one hundred years, has created more massive and more colossal productive forces than have all preceding generations together. " (bold, colour and italics are mine)

Wow! Who in the world can be so grateful, so candid, so expresive, so vivid in order to exalt the virtues of bourgeois and capitalism? Is he or she a conservative? a libertarian? a republican? some kind of reactionary mercenary paid by bourgeois bankers to defend them? Well, surprise! It is our good friend Karl Marx and his supplier, the industrialist (and possible exploiter?) Engels.[5]   

Now, can someone really say that Marx was a defender of capitalist system in that text? Can we call him "Marx the exploiter" or "Marx the Fascist"? Can we say that the Communist Manifesto was an intellectual defense of bourgeois? No! Everyone will accuse me of deliberately choose a quote, totally out of context, in order to distort what Marx is saying. How could I reach such a stupid conclusion? By commiting a basic and stupid fallacy in order to "convince" (=deceive) my readers.

Well, the "Marx defender of capitalism and bourgeois" case, is exactly the same as the "Mises defender of fascism" case: A ridicule attempt to show someone saying something he did not say by appealing to a low-rank logical fallacy.

That's all about this "quotation issue". There is no more discussion on this issue due to the lack of logical coherence and intellectual honesty of the supporters of this "proof". Anyone who ever rises his voice saying "Mises was a Fascist" because of this quote, must necessarily admit that, using his own pseudo-logic, Marx was a capitalist and bourgeois apologist.

2. The Guilt by Association Fallacy

The second line of fallacious "argument" this people have, is the "you have the ideology of the people you advise" fallacy. It consist in accusing or imply that Mises was or could have been a Fascist because he advised[6] Engelbert Dollfuss, an interventionist and Fascist (though not Nazi! He actually was killed by them) austrian ruler.

Despite the fact that, in itself, the fact of using this fallacy discredits and refutes this accusation, once again, in order to see how ridiculous this accusation is, we must apply the same principle to another similar situation.

Everybody knows that in the period of 1918-19 after the chaos due to the defeat in WWI, european countries started to fall in the Bolshevik "dream". In Austria the man in charge to bring the Bolshevik revolution to home was the austrian marxist theoretician and politician Otto Bauer (not this Otto Bauer!). Some years before that, Bauer attended to Böhm-Bawerk's seminar to try to gain knowledge to defy Bawerk's total refutation and demolition of Marx's theory, there he met Mises. To the chaotic period of 1918-19 Mises was much more than a "close advisor", he was a friend of Bauer. Mises actually spent lots of nights convincing him and his wife to not take Austria to the Bolshevik camp, as many countries, like Hungary, did after WWI. He actually succeeded in convincing him, and Mises saved Austria from the chaotic and disastrous management of Bolshevik fanatics.[7]

As you read it, Mises advised a marxist socialist pro-Bolshevik politician. Can anyone in his right mind insinuate that, because of that, Mises was a socialist? Is there a common factor that relates that Mises advised a socialist marxian and after that a Fascist interventionist? Yes! He was trying to do the best for his country[8]. He tried to avoid the economic chaos of a Bolshevik revolution first, and after that he tried to avoid Nazi domination.

We see how stupidly ridiculous is calling him a Fascist supporter because he advised Dollfuss, and not calling him a marxist-socialist for advising Bauer. The stupidity and ridiculousness of the guilt of association fallacy is evident. This is not an argument at all, it can not be taken seriously.

Another case: Milton Friedman advised the Communist leaders of China in 1980. So, as Milton advised communists, can we say that Friedman was a communist or sympathetic to communism only because he advised a communist government? No![9]

Yet another one: Karl Marx advised the bourgeois-manufacturer-"exploiter" Friedrich Engels. Can we call Marx a capitalism apologist only because he advised a "capitalist"?

All this ridiculous conclusions are more than enough to bury this fallacious way of arguing.

Further Comments on the Out of Context Quotation

• What did Mises mean by “civilization”?  

"The history of private ownership of the means of production coincides with the history of the development of mankind from an animal-like condition to the highest reaches of modern civilization… 

The foundation of any and every civilization, including our own, is private ownership of the means of production. Whoever wishes to criticize modern civilization, therefore, begins with private property."[10]

By “civilization” Mises meant “private property”. If you attack private property, you are attacking civilization. Now, which group of fanatics was explicitly anti-private property in those years (and maybe now)? Hmmm… Maybe the Bolsheviks! Which group of fanatics was explicitly anti-Bolshevik and combat them violently? I don’t know… Maybe the Fascists! 

So, in combating communism, Fascists avoided a revolution which would have banned private property. This is not (I emphasises NOT) an appraisal of fascism, it is an historical fact: In those chaotic and tumultous years in the post WWI Europe, the alternative was to choose between Bolshevik revolutionaries (which had the great impulse from the recently established Soviet Russia) or other group, no less violent than them, which claimed to combat and oppose them. Centuries of civilization can not be erased in some years, so people supported any group of people who did not promise to steal all their scarce property (thanks to war) once in power.

"[T]hey [the Fascists] have not yet succeeded as fully as the Russian Bolsheviks in freeing themselves from a certain regard for liberal notions and ideas and traditional ethical precepts is to be attributed solely to the fact that the Fascists carry on their work among nations in which the intellectual and moral heritage of some thousands of years of civilization cannot be destroyed at one blow, and not among the barbarian peoples on both sides of the Urals, whose relationship to civilization has never been any other than that of marauding denizens of forest and desert accustomed to engage, from time to time, in predatory raids on civilized lands in the hunt for booty." (bold and italics are mine)[11]

Like you or not, it is another historical fact that people (I'm talking about people in general, not the particular case of Mises) approved and supported violent fascism as reaction against the atrocities of the Bolsheviks. And this description of reality (which is not the same thing as "supporting fascism") in those years was known by Mises:

"Only under the fresh impression of the murders and atrocities perpetrated by the supporters of the Soviets were Germans and Italians able to block out the remembrance of the traditional restraints of justice and morality and find the impulse to bloody counteraction. The deeds of the Fascists and of other parties corresponding to them were emotional reflex actions evoked by indignation at the deeds of the Bolsheviks and Communists.

Many people approve of the methods of Fascism, even though its economic program is altogether antiliberal and its policy completely interventionist, because it is far from practicing the senseless and unrestrained destructionism that has stamped the Communists as the archenemies of civilization. Still others, in full knowledge of the evil that Fascist economic policy brings with it, view Fascism, in comparison with Bolshevism and Sovietism, as at least the lesser evil. For the majority of its public and secret supporters and admirers, however, its appeal consists precisely in the violence of its methods.

Fascism can triumph today because universal indignation at the infamies committed by the socialists and communists has obtained for it the sympathies of wide circles." [12]

As Raico explains: “Millions in the middle classes became convinced that Bolshevism was on the point of overwhelming the country.” After this, Raico advances a brilliant description of the historical context of how the revolution was “at door” in those years. So there is nothig else to discuss here. Describing an historic episode is not justifying or praising for fascism or any other murderous ideology.

• The "full of the best intentions" part.

Can this insulated phrase mean that Mises was praising fascism? Of course not. Let's see other examples:

“Before the rise of liberalism even high-minded philosophers, founders of religions, clerics animated by the best of intentions, and statesmen who genuinely loved their people, viewed the thralldom of a part of the human race as a just, generally useful, and downright beneficial institution... 

We see that as soon as we surrender the principle that the state should not interfere in any questions touching on the individual's mode of life, we end by regulating and restricting the latter down to the smallest detail. The personal freedom of the individual is abrogated. He becomes a slave of the community, bound to obey the dictates of the majority. It is hardly necessary to expatiate on the ways in which such powers could be abused by malevolent persons in authority. The wielding, of powers of this kind even by men imbued with the best of intentions must needs reduce the world to a graveyard of the spirit."[13]

Even when Mises has said that slavers were “animated by the best of intentions” and “genuinely loved their people”, he was describing an historical fact. Can someone really think that Mises was favoring slavery? If your answer is yes, then you must read again. When Mises says that people wielding excessive powers may be “imbued with the best of intentions”, can any reasonable people assert that Mises was favoring dictators? No.   

For Mises, the intentions or ends are irrelevant whichever they are. The important issue are the means. Mises demonstrated in all his books how, even assuming best of intentions, the means can be totally incorrect to achieve goals. We have already saw how Mises condemned Fascists' violent means and how he stressed that communism must be combated and defeated (the end to be achieved) in the camp of ideas. Bolsheviks said they wanted the equality and to end misery of their people, Hitler said he wanted the best for his nation. I really doubt that any political leader in his campaign discourses or in his oratory had ever said “we are going to gas every Jew in Germany for the greatness of the Nation. Vote for me!” or “In order to achieve equality; we are going to kill by starvation 7 million people in Ukraine. Support us!”. No dictator has ever reached or maintained power by not laying their own people, that has never happened. Dictators and politicians always have the noblest and best intentions, and to achieve them sometimes they became the greatest assassins. People would not support what they think are “bad intentions”, people voted and supported these radical ideologies because they thought it would help them. Even socialists have good intentions[14].   

• The "for the moment" part.

Mises clearly had said that "for the moment" Fascist movement saved civilization (private property). Just after the "eternally in history." sentence, you have this:

"But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error."

He clearly said that people (not him!) saw fascism as a "an emergency makeshift". But he clearly imply that fascism would not a sustainable solution for future. He is making a descripcion of an historical moment (what people thought or how people viewed it in that moment), he is not endorsing that fascism was any solution. As Jeffrey Tucker has brillantly said:

"Mises clearly condemns this view, pointing out that it is pure historical accident that fascism is less evil than communism; both are ideologies of violence that reject liberalism – the very thing that Mises sought to defend against socialism and fascism. Communism was just more developed; Mises predicts that fascism will eventually be the same."

• I cannot end this post without talking about my "favorite" anti-austrian blogger: “Well, if it isn't my arch-nemesis, Lord Keynes”  

I got him here talking about this issue. After been obligated to admit that Mises was not a Fascist at all, and after a soft fall on the fallacies 1. and 2. (see above), he cites this passage from Mises: 

"The deeds of the Fascists and of other parties corresponding to them were emotional reflex actions evoked by indignation at the deeds of the Bolsheviks and Communists. As soon as the first flush of anger had passed, their policy took a more moderate course and will probably become even more so with the passage of time."[15]

and he adds:

"Mises was ridiculously wrong about fascism moderating “with the passage of time.” On the issue of fascism in these passages, he was a hypocrite, and, at best, naïve. At worst, what was he? Well, I will leave that up to readers to decide."

However just in the next paragraph (that's right, it was that simple, all LK had to do was to read just one more minute after that quotation), Mises puts serious doubts on this, and shows how Fascists had unthinkable victories:

"This moderation is the result of the fact that traditional liberal views still continue to have an unconscious influence on the Fascists. But however far this may go, one must not fail to recognize that the conversion of the Rightist parties to the tactics of Fascism shows that the battle against liberalism has resulted in successes that, only a short time ago, would have been considered completely unthinkable. Many people approve of the methods of Fascism, even though its economic program is altogether antiliberal and its policy completely interventionist, because it is far from practicing the senseless and unrestrained destructionism that has stamped the Communists as the archenemies of civilization. Still others, in full knowledge of the evil that Fascist economic policy brings with it, view Fascism, in comparison with Bolshevism and Sovietism, as at least the lesser evil. For the majority of its public and secret supporters and admirers, however, its appeal consists precisely in the violence of its methods."(bold and italics are mine)[16]

Anyone can read that that “moderation” was subject to the condition that traditional liberal still exercises some “unconscious influence” on Fascists. However he perfectly warns the reader about the incredible loss of influence of classical liberalism in the previous times. The loss was so great that “Many people approve of the methods of Fascism…”. So if moderation depends on influence of liberalism on Fascists, and Mises is explaining that this influence is less each day, I let the reader reach his conslusion of what Mises really said. The red herring fallacy committed by “Lord Keynes” is evident, and the Wikipedia's definition is perfectly suitable for him: “leads readers or characters towards a false conclusion”.

On his defense I must say that he acknowledges he is not calling Mises a Fascist directly: "While this certainly does not mean that Mises directly supported fascism and fascist ideology (and please note that I am not saying this), his astonishingly positive remarks about fascism in the 1920s cannot be wished away. Frankly, these comments are an utter embarrassment and disgrace to Mises." However I have demonstrated that all the comments LK want us to believe that are "embarrassment and disgrace", are not like that in reality. The quotations used by LK, if are correctly read, are not an "embarrassment and disgrace". His post really is an embarrassment, but that is his problem.

I must also say that in an act of intellectual dishonesty (for more acts of intellectual dishonesty, doble standard and blatant Kontradictions see here and here) LK in the whole post never mentions that Mises had an entire book against fascism and nazism, all he can say is "For all of his denunciation of, and opposition to, Fascism both here and elsewhere...". An truly honest post would had remembered that book, not mentioning it makes his post unfairly unbalance. Besides in his discusion of Mises advising a Fascist Dollfuss, he never mentions the fact that Mises also advised a Marxist like Bauer, that would put him in a uncomfortable situation.
 

Conclusion

As we saw, the "arguments" used to accuse Mises of being a Fascist are flawed by two basic fallacies: The out of context fallacy and the guilt by association fallacy. No serious case can be made.

To accuse Mises through quoting out of context a phrase from a chapter that attacks fascism is as ridiculous as trying to "prove" that Marx was a capitalist promoter using another quote out of context from a text dedicated to denounce the supposedly defects of capitalism.

Saying that Mises was a Fascist or that he had sympathy for fascism because he advised a fascist-interventionist (who was against Nazis) like Dollfuss, necessarily implies that Mises was a socialist because he advised a marxist pro-Bolsheviks like Bauer, a totally ridiculous statement. It is the same “logic” of the accusation what makes it stupidly ridicule.

Mises neither endorsed nor supported fascism in any form. The “evidence” used by the left to accuse him is flawed, fallacious and ridicule, especially when is applied to other cases.