About this Quotation:
Liberty Fund is republishing a large number of the works of Ludwig von Mises as part of a new Liberty Fund “Library of the Works of Ludwig von Mises”. Over the next few months we will be sampling several of these works for interesting insights. In this passage Mises lays to rest an old argument that the capitalist system based upon the division of labor is somehow inimical to human cooperation. In fact the reverse is true, according to Mises, as each depends upon the existence of the other: social cooperation makes the division of labor possible, and the division of labor encourages and rewards social cooperation.
16 April, 2007
Read the full quote in context here.
In vol. 1, part 2, chapter 8, section 2 of Human Action: A Treatise on Economics, Ludwig von Mises shows the necessary and essential connection between free economic activity and social cooperation:
The fundamental social phenomenon is the division of labor and its counterpart human cooperation. Experience teaches man that cooperative action is more efficient and productive than isolated action of self-sufficient individuals. The natural conditions determining man’s life and effort are such that the division of labor increases output per unit of labor expended.
The full passage from which this quotation was taken can be be viewed below (front page quote in bold):
The fundamental social phenomenon is the division of labor and its counterpart human cooperation.
Experience teaches man that cooperative action is more efficient and productive than isolated action of self-sufficient individuals. The natural conditions determining man’s life and effort are such that the division of labor increases output per unit of labor expended. These natural facts are:
First: the innate inequality of men with regard to their ability to perform various kinds of labor. Second: the unequal distribution of the nature-given, nonhuman opportunities of production on the surface of the earth. One may as well consider these two facts as one and the same fact, namely, the manifoldness of nature which makes the universe a complex of infinite varieties. If the earth’s surface were such that the physical conditions of production were the same at every point and if one man were as equal to all other men as is a circle to another with the same diameter in Euclidian geometry, men would not have embarked upon the division of labor.
There is still a third fact, viz., that there are undertakings whose accomplishment exceeds the forces of a single man and requires the joint effort of several. Some of them require an expenditure of labor which no single man can perform because his capacity to work is not great enough. Others again could be accomplished by individuals; but the time which they would have to devote to the work would be so long that the result would only be attained late and would not compensate for the labor expended. In both cases only joint effort makes it possible to attain the end sought.
[More works by Ludwig von Mises (1881 – 1973)]