Mises stated that when people recognise and work towards their own goals they recognise the importance of cooperation, voluntary exchange and division of labor And that these social phenomena are incompatible with collectivism. I can see where Mises is coming from but isn't a collectivist society just as good at achieving that. When the people of a society are bound together by an ideology that they support, they are working in cooperation towards a mutual goal which is far more efficient than a society that is composed of people all of which have their own goals. So how is individualism better at creating a more efficient society?

  • Can you explain what the term 'collectivist' means? Does a firm count as one, a family or a nation? May 1, 2015 at 22:56
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    Remember: you are reading Mises and he is defending a certain point of view. If you would be reading Confucius, that view would be different. One can expect discussions involving both views, but can one really expect a single (philosophic) answer that applies everywhere?
    – Drux
    May 2, 2015 at 7:05

3 Answers 3


It seems obvious that highly collectivist Feudal societies, especially Monastic Orders had cooperation and division of labor. And even though most of the participants held no money, they still took part in some degree of voluntary exchange. So this premise seems easily contradicted by history.

In such an arrangement complete alignment of goals (safety in the general Feudal case, and spiritual advancement among monks) is presumed. So these folks are pursuing their own goals, and that might still theoretically be the reason for the values.

But that means that collectivism and pursuing one's own goals are not mutually exclusive. So I see this mostly as a false dichotomy. To the degree that collective goals are powerful and natural and cannot be met without common alignment they are still the goals of individuals.

We see every day how shared decisions are not what individuals might decide for themselves, create inefficiency by letting individuals resent that gap. Far too many people who could clearly do no better themselves will second-guess their children's state-provided teachers. Virtually no one approves of how highway construction gets done. We all doubt that controlled utilities like electricity or sewage really need to cost so much. People rail against the 47% of folks who pay no taxes, and then go collect their government-pooled retirement payments. The list is endless.

To the degree that this means these things are over-regulated by extra layers of bureaucracy in the interest of satisfying gripers, or pointlessly thwarted by those who are actually outright dependent upon them, in a way that reduces their efficiency, there is needless collective waste. And to the degree that harboring these emotions causes people not to contribute in other ways, there is foot-dragging, malingering, minor sabotage and other individual waste.

The question then becomes how aligned a culture really is in its values, how collective a decision can be about a goal, and therefore whether it is going to do more harm than good to force people to share a single decision.

A Feudal culture becomes insanely wasteful when people genuinely believe that they have ways of being safe other than being extorted by a member of the warrior class. And so they basically do not exist anymore. A Monastic culture falls apart without earnest devotion to a clear dogma, and those are becoming quite rare, too.

But if we all agree that everyone should have equal access to water, we can get behind that collectively, make a clear legal solution, and quash bickering about the issue without a massive loss of efficiency (even in Texas, our country's most individualistic state). Declaring that making this collective will necessarily cause more waste than leaving it at risk, is too strong an assumption.


There has been a lot of research and writing on this. The problem with his premise is that in a collective environment an individual sees his individual goals as part of the collective goals. A core part of this problem deals with trust - how much do you trust the other person in society.

There has been a lot of game theory research on this. Some of the more notable ones have been the 'Hawk-Dove' and the 'Prisoner's Dilemma'. The problem with either the individual or collective state is that there are always 'defectors' - how many individuals are working against the stated norm. In the case of a collective, defectors would be people working for themselves, in many cases, corruption. For a good oversight with lots of references I would recommend the book Liars and Outliers: Enabling the Trust that Society Needs to Thrive by Bruce Schneier


All societies display differentiation of labour, of cooperation and rivalry and of voluntary exchange.

A good theory of economics in its broadest sense has to explain how this comes about.

Mises, in essence is defending an evolutionary model of economics; whose basic premise is that individuals act in their best interests and this to him explains the above; and this in the most efficient manner.

Individualism, at least for me are ambiguouos terms; and denote in terms of popular thought a representation of modern Western values; and collectivism it's feared 'Other'; and these are, I think still polarised terms due to the long Cold War.

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