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Advancing Austrian Economics, Liberty, and Peace

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Mises Made Easier
Percy L. Greaves Jr.

S

Sabotage, n. and v. To injure or destroy willfully and maliciously; from the practice of early French and Belgian workers who threw their sabots (hollowed-out wooden shoes) into machinery they sought to disable due to fear that use of machinery would lead to mass unemployment.

Sane sicut lux se ipsam et tenebras manifestat, sic veritas norma sui et falsi est, (Latin). A dictum of Spinoza (1632-1677). Translation: "Indeed, just as light defines itself and darkness, so truth sets the standard for itself and falsity."

Scab. A derogatory term used to signify one who works, or continues to work, at a place of employment against which a union has called a strike.

Schizophrenia. An abnormal state of mind or mental derangement characterized by distorted views of reality and the presence of conflicting ideas, impulses or emotions which lead to fantastic delusions and a disintegration of personality.

Scholastic philosophy. See "Medieval scholasticism."

"Scientific" socialism. See "Socialism, 'scientific.'"

Second International. A loose federation of national groups of Marxian socialists that was first organized at Paris in 1889, on the 100th anniversary of the French Revolution. It followed about fifteen years after the dissolution of "The International Workingmen's Association" or "The International," now known as "The First International," which was founded at London in 1864, under the domination of Karl Marx (1818-1883). This second attempt to promote international socialist unity disintegrated with the advent of World War I. After the war, many of its components were absorbed into "The Labor and Socialist International" which first met at Hamburg in 1923. Others were absorbed into "The Third (or Communist) International" which first met at Moscow in 1919.

AC. 98; HA. 152; OG. 51, 149, 154, 164-66, 180.

Secular. Long enduring, long term, usually used in contrast to short term. Technically, when used in non-religious terminology, secular implies a duration of several centuries. When used in reference to religion (HA. 527,587), secular means worldly, nonreligious, outside of the church.

Sedulous. Diligent and persevering; hard working and persistent.

Seigniorage. A charge made for converting monetary metal into coins.

Seven Years' War (1756-1763) An almost world-wide war between England, Prussia and Hanover on one side and France, Austria, Saxony, Russia, Sweden and later (1762) Spain on the other. It involved colonial possessions and the Austro-Prussian conflict for domination over a more united German speaking central Europe. The Peace Treaties of 1763 established British supremacy in India and America and Prussian (Hohenzollern) ascendancy in central Europe. The American phase of this war is generally known as the French and Indian War.

Sine qua non, (Latin). Necessity; requisite; something absolutely necessary or indispensable.

Slavonic Bolsheviks. Eastern European Bolsheviks (q.v.) who speak one of the Slavic languages. These include the Russians, Poles, Czechs, Slovaks, Yugoslavs (Serbs, Croats and Slovenes) and Bulgarians.

Social competition. The striving of individuals to attain the most favorable position in a system of social cooperation.

HA. 273-74; S. 320-21.

Social Democratic Party, German. A German political party which in the late nineteenth century was a leading member group of the Second International (q.v.), the most influential movement for the spread of Marxism, and a model for the Social Democratic parties of other countries. The Party was founded in 1869 by Wilhelm Liebknecht (1826-1900) and August Bebel (1840-1913), devoted advocates of Marxian doctrines, including those of noncompromising class warfare, the inevitable collapse of capitalism and the eventual proletarian seizure of power. In 1874-1875, the Party, in merging with a group of followers of Ferdinand Lasalle (1825-1864), an advocate of socialism by interventionism, adopted the Gotha Program opposed by Karl Marx (1818-1883). From 1878-1890, German law declared the advocacy of socialism to be subversive. All Party meetings and literature were thus banned, but the Party continued to grow at the polls and in members of the Reichstag. In 1891, in adopting the Erfurt Program, the Party reendorsed Marxian doctrines as rewritten by Karl Kautsky (1854-1938). However, the Party in practice drifted into endorsement of the "revisionist" policies of political opportunism and interventionism sponsored by Eduard Bernstein (1850-1932). The Party thus attempted to hold the loyalty of trade union members for which the government was bidding with "social insurance" and other "pro-labor" interventions. In 1912, the Party received one-third of the total Reichstag vote. During World War I, dissension split the Party into two groups: the so-called Majority Socialists, who endorsed the war effort; and the Independents. After the outbreak of the Russian Revolution (1917), a group seceded from the Independents to form the German Communist Party which later joined the Communist International. Between the World Wars, the Social Democratic Party was the largest German political party, although it never succeeded in winning a majority.

In 1933, the Nazis abolished the Social Democratic Party and all other rival parties. Since World War II, the Party has rejected nationalization and sponsored welfare-state-planned-economy policies. It has been the leading rival of the dominant Christian Democratic Union Party.

OG. 51, 149-68, 193-221; PF. 98; S. 83, 543-49, 572; TH. 144.

Socialism. A system of social organization that calls for the public ownership of the means of production. A policy which aims at constructing a society in which all the material means of production are under the exclusive control of the organized community, i.e., government, the social organism of coercion, compulsion and repression.

Under socialism, the organized community would not only determine what is to be produced, how it is to be produced and who is to produce it, but also who is to receive the products and how they are to be used. Under such a monopolistic ownership and control of the factors of production, there would be no market for such factors and thus no place for a medium of exchange (money) or the use of economic calculation which must be based on market prices. In the final analysis, all decisions would be centralized under one supreme authority. Accordingly, the principles of socialism, if carried to their logical conclusion, would inevitably lead to a one-man dictatorship. [For further see Calculation Debate and Socialism: An Economic and Sociological Analysis. [Liberty Fund e-text]

For distinction from communism, see "Communism."

AC. 62-66, 102, 111-12; B. 10, 29-30, 57-59, 92, 99-100, 103, 105, 109, 114-15, 118-19, 123-25; FC. 19, 62, 70-75; HA. 73-74,183,205-06,258-59,265,284-85,565-66,675-82,689-715,<716-18/a>,758-59,858-61; OG. 51-58, 107-11, 178-80, 267-71, 284-86; PF. 4-5, 19, 24, 149, 163; S. 20, 56, 113-22, 128, 207, 239, 532-53; UF. 99.

Socialism of the German pattern. An economic system completely planned and controlled by the government while retaining many of the labels and nominal forms of capitalism. A form of socialism (q.v.) which retains the appearance and terminology of the market economy while in fact private ownership of the means of production, real buying and selling, and real market prices, wages and interest rates no longer exist because all production activities and product allocations are directed and controlled by government orders which all participants are bound to obey unconditionally. This form of socialism was put into operation in Germany during the Nazi regime (1933-1945) but collapsed with the German defeat in World War II. The German term is Zwangswirtschaft (q.v.), a compulsory economic system. See "Nazi."

HA. 323-25,474,691,717-18,758-59,764; OG. 56-58, 203-06; PF. 4-5, 24-25, 75-78; S. 529, 584.

Socialism of the Russian pattern. A form of socialism (q.v.) in which all the material means of production (farms, factories, capital goods, stores, etc.) are legally owned by the government and operated by government employees as ordered by government directives. Such a system does not maintain the appearance of market transactions in the means of production as does "Socialism of the German pattern" (q.v.).

B. 87; HA. 717; OG. 55-56; PF. 4; S. 529, 582-89.

Socialism, "scientific" and "utopian." A distinction between "scientific socialism" and "utopian socialism" was one of the basic ideas of Marxism. According to Karl Marx (1818-1883), utopian socialists were those who aimed at demonstrating that conditions in a socialist society would be incomparably more satisfactory than those of existing social conditions. Utopian socialists attempt to bring about the transition to socialism by convincing people that socialism is in every respect more desirable than the system of private ownership of the means of production. Marx rejected such views as fallacious. He asserted that socialism will not come because people may prefer it; but because, as be had discovered and revealed, historical evolution necessarily and inevitably leads to the establishment of socialism. From this viewpoint, Marxian socialists claim the term "scientific" for themselves, while disparaging the older socialist authors as "utopian" dreamers.

B. 57; S. 17, 281, 356; UF. 129.

Social security. Term now generally applied to political programs which provide welfare payments for the benefit of special classes of the population considered to be deserving of special financial assistance.

In 1883, the German Government established a compulsory insurance system for all German employees. This system was designed to replace public relief with a program providing insurance for employee sicknesses, accidents and old age. In the following decades this system abandoned its actuarial basis and became more and more a system of benefits and pensions financed by taxes on wages. The system has been adopted step by step by almost all industrial nations. It was first enacted in the United States in 1935 as part of the New Deal (q.v.) of President Franklin D. Roosevelt.

HA. 367-68,617,839, 847-48; PF. 29, 83-93; S. 475-78; TH. 144.

Society. A system of peaceful and purposeful collaboration in the division of labor and the interchange of goods and services for mutual advantage. A joint action of cooperation in which each participant sees the satisfaction of other participants as a means for the attainment of his own satisfaction. A human society requires the services of a government for the suppression of all antisocial actions.

EP. 42-43, 58, 110; HA. 143-76,195-98; TH. 251-56; UF. 81, 105,108-09.

Sociology. A term first proposed by Auguste Comte (1798-1857), a French positivist (see "Positivism"), to signify a suggested science that would develop the laws of human development according to the methods employed in the development of man's knowledge of the natural sciences. Most of the writings that are today called sociological deal with various problems which were previously considered as studies in the fields of history, anthropology and ethnology.

EP. viii, 4-5, 17-22, 68-124; HA. 30; TH. 241-42; UF. 39, 101-03.

Sociology of Knowledge. An attempt to salvage the discredited Marxian ideology doctrine which Karl Mannheim (1893-1947) and Max Scheler (1874-1928) inaugurated in the 1920's. As Mannheim admits that there exist "unattached intellectuals" who are fit to grasp truth free from "ideological" distortions, the whole discussion leads into an impasse.

OG. 145; UF. 130.

Solo in un secondo tempo, quando le categorie non abbiano trovato la via dell' accordo e dell' equilibrio, lo Stato potr? intervenire, (Italian). "Only at a later stage, if the guilds (corporazione) have not succeeded in reaching an acceptable agreement, will the State be able to intervene." NOTE: The same principle applied to labor-management relations within each industry's guild, to which every member of the industry was legally compelled to belong.

Soviet economy, or system. Socialism of the Russian pattern (q.v.).

S. 582-89.

Soziale Marktwirtschaft, (German). Literally, social management of the market economy. Actually, Mises refers to the system of economic management adopted by the German Government after World War II. By and large this system embraced the interventionist policies of the United States. In some cases, Germany adopted American methods (e.g. antitrust policies); in other cases, Germany espoused more radical policies (e.g. granting labor unions the right of co-determination in certain key industries); while, in still other cases, Germany remained more "orthodox" (e.g. preferring relatively sound money policies as against inflationism).

Sozialpolitik, (German). Literally, social politics. More specifically, the policies of political intervention launched by the German Chancellor, Prince Otto von Bismarck (1815-1898), in 1881 in an attempt to compete with the Social Democratic Party (q.v.), the party of the Marxist socialists, for the political loyalty of the wage earners. While many of the features of this policy were modeled on British patterns, social security legislation was an institution never before tried. The German Sozialpolitik was the forerunner of welfare state policies in Europe and of the American New Deal inaugurated in 1933 by Franklin D. Roosevelt (1882-1945). The advocates of such policies deny the existence of economic law and fail to realize that such political interventions result in lower living standards for the very masses they seek to help by so-called "pro-labor" legislation.

B. iv; FC. vi; HA. 367-68,833-35; OG. 59-66, 76-78, 158-61, 202; PF. 47-48, 96; TH. 144.

Specific factor of production. A "factor of production" (q.v.), which has value in the production process of only one particular type of economic good or service and which is thus valueless for the production of anything else. An example would be a machine for wrapping razor blades which could not be used for anything else.

Speculation. Dealing with the uncertain conditions of the unknown future. Every human action is a speculation in that it is embedded in the flux of time.

HA. 58,112-13,250,252-53,336,457,584-85; M. 252-57; S. 205-08, 509; UF. 50-51, 66-67.

Speenhamland system. In February 1793, England went to war with France. The war was financed largely by inflation which, accompanied by poor crops and the Corn Laws (q.v.) raised food prices faster than wages, causing great suffering among workers and their families. In 1795, the magistrates of Berkshire, meeting at Speenhamland, opposing higher minimum wages, adopted a system of using tax revenues to supplement wages to provide workers' families with what they considered a subsistence income. The system spread rapidly to other counties. It resulted in higher incomes for the landed aristocracy, lower wages for workers, less incentives for low paid agricultural workers to shift to higher paying industrial jobs, higher birth rates and constantly rising taxes, until the system was replaced by the Poor Laws of 1834.

Spirochetes. Very slender and spirally bacteria which are the cause of such diseases as yaws, syphilis and recurrent or relapsing fever.

Stalinists. Followers of Joseph Stalin (1879-1953), a poorly educated but ardent and adamant supporter of the Russian Communist Revolution, who resorted to expedient tactics to eliminate Leon Trotsky (1877-1940) and his other more doctrinaire rivals in the contest for the Russian dictatorship upon the death of Nikolai Lenin (1870-1924).

PF. 98; S. 561-66.

Standard coins. Monetary coins which have unlimited legal tender power. Standard coins do not include minor or subsidiary coins which have only limited legal tender power.

Standesherr, (German). A German prince or count whose family was mediatized (q.v.) at the beginning of the nineteenth century. These families then lost the ruling powers they had enjoyed under the Holy Roman Empire. However, they retained certain privileges, properties and the right to marry royalty until the adoption of the Weimar Constitution after World War I.

St?ndische Landtage, (German). Territorial assemblies of representatives of the estates of the realm. Starting about the beginning of the fourteenth century, most of the duchies, principalities and kingdoms of the Holy Roman (German) Empire (800-1806) had these diets or assemblies composed of representatives of the three estates, i.e., the nobility, the clergy and the third estate or commons (chiefly the burghers, landowners and lesser aristocrats). These Landtage were often important checks on the provincial rulers before the Thirty Years War (1618-1648) which devastated much of Germany, reduced the population by more than one half and reduced the powers of the Landtage to assemblies that merely endorsed the wishes of their rulers. However, the St?ndische Landtage continued to exist as nominal but powerless bodies until the end of the Empire and in a few cases even to the middle of the nineteenth century.

State of rest. See "Final state of rest," "Plain state of rest."

Static equilibrium. Evenly rotating economy [ERE](q.v.)

EP. 108; UF. 42.

Stationary economy. The imaginary construction of an economy in which the per capita income and wealth remain unchanged. In such an economy total profits would be precisely equal to total losses. It is only in such an unreal and imaginary economy that the equations of "mathematical economists" would have any validity. See "Mathematical economics."

HA. 250-51,255-56,294; PF. 123.

Statism. The doctrine or policy of subordinating the individual unconditionally to a state or government with unlimited powers. Statism includes both socialism (q.v.) and interventionism (q.v.).

B. 74-76, 78; OG. 5, 44-78, 285.

Stato corporative, (Italian). The corporative state or nation. For program, see "Corporativism."

OG. 178; UF. 130.

Statolatry. Worship of the state. Worship of the state is worship of force.

OG. 46-47.

Sterling area, sterling bloc. Terms applied, ever since Great Britain went off the gold standard in 1931, to those countries which keep large parts of their monetary reserves in "pounds sterling" (q.v.) with the Bank of England in order to maintain the established parity of their monetary units with the (British) pound sterling, rather than gold or silver.

Straiten. Limit, narrow, confine or reduce to the point of creating difficulty or distress.

Strikebreaker. A person employed in the place of one who has left employment because of a strike or concerted work stoppage on the part of a number of workers due to disagreement over wages, working conditions or some particular action or actions of an employer. A strikebreaker differs from a scab (q.v.) in that he may be paid premium wages and is usually hired merely for the duration of a strike rather than for the normal duration of the job.

Subaltern. A person occupying a lower, inferior or subordinate rank or position.

Subjective economics. The general economic theory developed from the subjective-value theory as expounded by the "Austrian School of Economics" (q.v.).

Subjective theory of value. The theory, held by the Austrian economists and by the Anglo-Saxon followers of the English economist, W. Stanley Jevons (1835-1882) and the American economist, John Bates Clark.(1847-1938), that the value of economic goods is in the minds of individual men and therefore is neither constant nor inherent in the goods themselves; that values of the same good vary, as the judgments of the individuals making the valuations vary, from person to person and from time to time for the same person. See "Subjective-value theory" and "Marginal theory of value."

EP. 146-81; M. 38-45; also PLG. 27-63.

Subjective use-value. The importance attached to an object or service due to the belief, judgment, knowledge or expectation that its use can produce a desired effect. If it is based on a belief, judgment or expectation, it may or may not be true. Likewise, a thing with the power to produce a desired effect may not have subjective use-value for a person who is not aware of this fact.

HA. 120-21; M. 38-45.

Subjective-value theory. The value theory of the modern economists (the followers of Carl Menger, 1840-1921, W. Stanley Jevons, 1835-1882, and Leon Walras, 1834-1910) which holds that the relative values of goods and services, in the sense that values determine human actions, are to be found in the minds of acting men at the moment of their decisions to act or not to act and not in the physical characteristics or the costs of production of such goods and services. Value is thus said to be subjective rather than objective. See "Marginal theory of value."

EP. 146-81; M. 38-45; OG. 113; also PLG. 27-63.

Subjectivist economics. Economics based on the theory that the value of goods is not inherent in the goods themselves but is in the minds of acting men; that economic value is a matter of individual judgment which may vary from person to person and for the same person from time to time. EP. 93-97.

Subsidiary coins. Token money (q.v.) in the form of coins for smaller amounts than those of standard coins (q.v.).

Sub specie aeternitatis, (Latin). From the viewpoint or mental image of eternity.

Subtrahendum, (Latin). A thing or quantity to be subtracted.

Sui generis, (Latin). Unique; of a class by itself; of its own kind.

Supererogatory. Superfluous; nonessential; doing something above and beyond what is required by law, duty, custom or normal circumstances.

Supernumerary. Excessive number of; superfluous; a number beyond what is necessary, usual or required.

Sword of Damocles. As told by Cicero (106-43 B.C.), the sword suspended by a single horsehair over the head of Damocles, a courtier invited to dinner by the elder Dionysius (e. 430-367 B.C.) of Syracuse, Sicily, whom Damocles had flattered excessively. Hence, something precarious that is threatening or intimidating.

Sybaritism. The theory that the highest human happiness is to indulge one's sensual desires for rare and luxurious pleasures, such as living the life of a rich and unrestrained royalty.

Sycophant. One who seeks wealth, power or influence from an accepted leader or leaders by undue flattery, adulation or servility.

Syllogisms. A three-part process of deductive reasoning consisting of (1) major premise (usually a general rule), (2) minor premise (usually an individual case employing one term appearing in the major premise) and (3) a conclusion which must follow if both the major and minor premises are true (usually the substitution of the new term of the minor premise in the major premise in place of the term common to both premises). Example:

Major premise: All dogs are animals
Minor premise: Betsy is a dog
Conclusion: Betsy is an animal.

Syndicalism. A naive and impractical proposal for the economic organization of society whereby the workers of each plant, company or economic unit would jointly and equally own and operate the organization for which they work. It supposes the elimination of entrepreneurs and the expropriation of investments so that all "unearned income," i.e., interest and profits, would be equally divided among the workers of each economic unit. Under syndicalism, the incomes of workers doing similar work would vary greatly, depending largely on the wide variation in both the efficiency and the capital invested in the unit by which they were employed.

Syndicalism is also used in the sense of action directe (q.v.) wherein it is considered not as a final objective but rather as a means for bringing about socialism.

AC. 109-10; HA. 812-20; S. 270-75; UF. 130.

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