8. Nation, State, and Economy

LIKE MANY INTELLECTUALS OF the time, Ludwig von Mises felt the need to come to grips with the causes and consequences of the war that had destroyed the Old World. For quite some time he had anticipated a dreadful end to the war, and as soon as he had returned from his last mission on the frontlines, he began to put his thoughts on paper. Despite his time-consuming involvement in the new republican government, his Kammer activities, and his duties as a professor, he continued working on a new manuscript, which would contain an in-depth analysis of the causes of the war, his personal experience of it, and the political challenges facing postwar Austria.

As usual, he worked on the book in the evening and latenight hours after long workdays spent with other tasks. He finished the manuscript in early July 1919, just before leaving Vienna for a few weeks of vacation in his beloved Bad Gastein. He had written the book as Imperialismus, but he published it under the title Nation, Staat und Wirtschaft (Nation, State, and Economy).¹ Although it is now one of his less-known works, it made a great impression on many readers at the time, and established him as the most important intellectual champion of classical liberalism in postwar Austria, and eventually in all of Europe.²

The book contains three essays on the theory of imperialism, with applications to the history of Germany and Austria-Hungary. In the first chapter, which comprises almost two-thirds of the book, Mises pioneers what could be called the analysis of the “political economy of nations” to explain German imperialism, which in his view was the main cause of the war. The second chapter contains a thorough critique of the alleged blessings of German war-socialism, and the third dissects the history and politics of the German social democrats.

The book contains most of the political arguments that Mises would develop in more detail during the 1920s. Despite the rather specific nature of the events he was dealing with, none of his observations have lost relevance. As he himself points out in the book, it would be a mistake to think of pre-1914 German imperialism as a specific problem of the Teutonic race. It was rather the necessary result of certain historical conditions, which are likely to produce the same result wherever they come about, and which by 1919 had already resulted in imperialist policies in several other nations.³