French President Emmanuel Macron recently stated that the European Union will “disappear” if it doesn’t change its policy on innovation, as it is already seriously lagging behind the United States and China. Classical liberal theorist and economist Ludwig von Mises wrote an insightful piece on how to create an environment for innovation in his 1957 book Theory and History.
Civilization is the product of a particular worldview, and its philosophy is reflected in all its achievements. The artifacts created by humans may be called material, but the methods used in organizing productive activities are mental—results of ideas that determine what should be done and how. All branches of a civilization are inspired by the spirit that permeates its ideology.
The philosophy characteristic of the West, which transformed all social institutions over recent centuries, is called individualism. It holds that ideas—both good and bad—originate in the mind of the individual. Only a few people are endowed with the ability to conceive new ideas.
Yet, since political ideas can function only if society accepts them, it is up to the masses—those unable to develop new ways of thinking themselves—to approve or reject the innovations of pioneers. There is no guarantee that these followers and routine thinkers will wisely use the power entrusted to them. They may reject beneficial ideas and adopt harmful ones.
If they choose wrongly, the blame is not solely theirs. The pioneers also share responsibility for failing to present their ideas in a more persuasive form. The favorable evolution of human affairs ultimately depends on humanity’s ability to produce not only originators, but also propagators and advocates of beneficial ideas.
One might regret that the fate of humanity is determined by fallible human minds, but such regret does not change reality. In fact, man’s greatness lies in his ability to choose between good and evil. This is what theologians had in mind when they praised God for giving humans the discretion to choose between virtue and vice.
The dangers arising from the incompetence of the masses are not eliminated by transferring decision-making authority to a dictator, however excellent he may be. It is illusory to believe that despotism always favors good outcomes. On the contrary, despotism tends to suppress the efforts of pioneers seeking to improve the fate of their fellow humans.
The main goal of despotic power is to prevent any innovations that might threaten the rulers’ dominance. Its nature drives it toward extreme conservatism—a desire to preserve the status quo, no matter how urgently change is needed. It opposes new ideas and any form of spontaneous action by its subjects.
In the long run, not even the most brutal despotic regimes can withstand the power of ideas. Eventually, the ideology that gains majority support will prevail and undermine the tyrant’s rule. Then, many of the oppressed will rise up and overthrow their rulers.
However, this process can be slow and cause irreparable harm to the common good in the meantime. Revolutions bring violent disruptions to social cooperation, creating lasting divisions and hatred that may take centuries to heal. The main virtue of constitutional institutions and democracy lies in their ability to facilitate peaceful changes in government personnel and methods.
In a representative government, unpopular rulers can be replaced in elections—without the need for revolution or civil war. If current leaders and their policies no longer satisfy the majority, a new system can be chosen peacefully.
This is how the philosophy of individualism toppled the doctrine of absolutism, which had attributed divine authority to princes and tyrants. Against the divine right of kings stood the inalienable rights endowed by the Creator. Against the state’s demand for orthodoxy stood freedom of conscience. Against rigid, outdated institutions stood reason. Thus began an era of freedom and progress toward prosperity.
The liberal philosophers of the 18th and early 19th centuries never imagined that a new ideology would arise to completely reject liberty and individualism, proclaiming instead that total submission to paternalistic authority was the noblest political goal—the highest end of history, even if it meant the metaphorical or literal “devouring of man.”
Not even Hume, Condorcet, or Bentham—nor Hegel or John Stuart Mill—would have believed it if told that in the 20th century, most intellectuals in France and the Anglosphere would enthusiastically embrace systems of governancemore oppressive than any previous tyranny. They would have dismissed anyone claiming that the abolition of freedom, civil rights, and consent-based government would one day be celebrated as “liberation.” And yet, it happened.
A historian may explain the sudden ideological shift, but this does not invalidate the criticism of philosophers and economists who challenged the false doctrines that produced such a movement.
The cornerstone of Western civilization is the space it gives individuals for spontaneous action. While there were always efforts to restrict individual initiative, inquisitors and persecutors never held absolute power. They couldn’t stop the rise of Greek philosophy or the development of modern science.
Driven by innate genius, pioneers persevered despite opposition. The innovator did not need an invitation or order to act. He could challenge tradition. In the world of ideas, the West has long enjoyed the fruits of freedom.
Eventually, that freedom extended to business as well. The entrepreneurial individual was given space to enrich others by improving production methods. Through capitalist mass production, abundance was created for the average person.
To fairly assess the impact of Western ideas of freedom, one must compare the West with parts of the world that never embraced liberty.
Some Eastern civilizations developed philosophy and science long before the West emerged from barbarism. Greek mathematics and astronomy were likely influenced by Eastern knowledge. Later, Arab culture flourished in Persia and Mesopotamia after contact with Greek literature. Up to the 13th century, Arab learning rivaled that of the West.
But then, religious orthodoxy imposed strict conformity, ending intellectual progress in Muslim countries, just as had occurred earlier in China, India, and Eastern Christianity. Meanwhile, the spirit of freedom in the West resisted such suppression.
Since the 13th century, virtually all intellectual, political, and economic innovation has originated in the West. Until the East was reawakened by contact with Western ideas in recent decades, it produced few notable figures in philosophy, science, government, or business.
The East stagnated in rigid conservatism until Western ideas began to filter in. Practices like slavery, untouchability, foot-binding, barbaric punishments, mass poverty, superstition, and poor hygiene persisted for centuries. Now, uncomprehending of individualism, many in the East are captivated by collectivist ideologies.
Despite these historical realities, millions today eagerly support policies that abolish individual planning and replace it with authoritarian central planning. They crave servitude.
Supporters of totalitarianism often claim they only want to end “economic freedom,” insisting all other freedoms will remain intact. But freedom is indivisible. The supposed distinction between economic and non-economic spheres is one of their gravest errors. A state that can assign every person their task leaves no room for freedom or autonomy—only obedience or starvation.
Expert committees may advise planners on whether a young person should pursue art or science. But such a system can only produce conformists, repeating the ideas of the past. It would silence dissenting innovators. No innovation would ever have emerged if its creator had needed approval from the very people whose orthodoxy they sought to challenge.
Hegel would not have approved Schopenhauer or Feuerbach; Professor Rau would not have approved Marx or Carl Menger.
If a central planning board dictates which books may be published, who may experiment or create, and which technological changes may be made, there will be no innovation or progress. The individual becomes merely a pawn in the hands of the rulers, to be used as engineers use building materials.
In every field of human activity, innovation challenges routine, expertise, and tradition—often even previous innovators themselves. It is typically met with stubborn resistance. Only in societies with economic freedom can such barriers be overcome. In socialist systems, these barriers are insurmountable.
The essence of individual liberty is the ability to deviate from tradition in thought and action. State planning excludes personal planning.
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