Preface to the Spanish-Language Edition

by Gustavo R. Velasco

Here is a book that answers an essential need. Simple, clear, and intelligible, it is a book that had to be written, and, now that it has been written, it deserves to be and will be read.

Nowadays especially, when many works on economics read like treatises on hydraulics, and when not a few economists seem to take an actual pride in the obscurity of their language, it has really become necessary that someone return to the traditional conception of it as something more than a technique for specialists, as a subject concerned with an aspect of experience that ought to be treated as an integral part of our lives and hence as one in need of being understood again, if not by everyone, then at least by the educated and by the intellectual leaders of society.

Of the importance, nay more, of the urgency of this task, there can be no doubt. It has already become platitudinous to observe that the great questions of our time are economic in character or at least are connected with or founded upon economics. Whereas in the sixteenth and seventeenth centuries it was religious controversies, and in the nineteenth century political reforms, that occupied the center of the scene, today it is the economic problems that appear as vital and decisive; and even the churches devote a good part of their time and effort to social and economic preachments, sometimes, one fancies, to the extent of neglecting their spiritual mission and affairs of a more exalted nature. To be sure, the question that I regard as the central issue of our age, viz., the choice that confronts our generation between a free or voluntary society and a servile or totalitarian society, does transcend the purely economic plane and involves broader problems, political and social, and even questions of mental health and personal morality. Nevertheless, there can be no doubt that essential to the resolution of the central issue is an economic element, and that only economic theory can enable us to come to a reasoned and well-founded decision either in favor of the market economy or in favor of the controlled or mandated economy.

For economic theory teaches us, in effect, what will happen under different sets of circumstances. In clarifying for us what is presupposed by the diverse ends that we can pursue and what consequences must follow from our aiming at them, economic analysis makes it possible for us to choose our goals with full insight into what it is that we really want and hence to aim at ends that are mutually consistent and compatible. It is therefore no exaggeration to qualify it as a technique of rational action and to assert that without its help it is impossible to make a defensible choice among the different possible systems of the economic organization of society.

It may well be, as Röpke observes, that the study of economics has become essential for our entire civilization because its preservation requires that those in positions of responsibility understand at least the operation of the economic system that forms part of it. And yet even a cursory glance at the instruction given in this discipline suffices to show how far we still are from having answered the need of providing modern man with a clear and comprehensive conception of the structure and operation of society and of the place he occupies in it. The economic ideas imparted in the courses in civics given in our secondary schools are as incomplete as they are superficial, and at the undergraduate level, where there would be greater opportunity for a presentation of this science that would make of it a living part of the culture of our time, as Ortega y Gasset has advocated, it is not even studied.

As a result, the average person, including those who by virtue of their position are called upon to play a leading role in society, lacks any economic education or considers economics a futile or incomprehensible kind of erudition. One of the most pernicious consequences of this ignorance and of the resulting refusal to reflect seriously on economic problems is the tendency on the part of the majority of citizens to favor eclectic compromises as solutions. They are the more inclined to do so as, in their blindness to economic reality, they fail to perceive that all of us have a stake in these problems and that our welfare and even our freedom and our lives depend on the way in which they are resolved. This attitude on the part of the public is responsible for the fact that day by day, slowly but surely, we find ourselves sliding down the slope of interventionism. Yet it is known that such a policy does not and cannot constitute a third or “middle” way between capitalism and collectivism and must lead inevitably to communism and totalitarianism, unless one of the great crises that it periodically provokes endows its victims with the necessary lucidity to decide to abandon it and climb back up the slope.

As can be seen from these very brief considerations, it is not possible to escape from economics. If it is indeed concerned with the fundamental problems of society, we shall have to pay heed to it whether we like it or not. The fact is that all the theories that are applied to the solution of these problems, including those that are mistaken because they do not correspond to the present state of that science or to the actual conditions that they profess to enable us to control, are economic theories. Neither is it possible to think of leaving this part of our lives to the economists, not only because, adapting a phrase of Clemenceau’s, we could say that economics is too serious a matter to be left to the professionals, but also because such an abdication on our part would make democracy impossible. It is all very well always to listen to the opinions of the experts and to place in their hands part of the responsibility for the execution of the policies they recommend; nevertheless, the fundamental decisions, those involving matters of basic principle, should be made by all qualified citizens, by all the intellectual leaders of the community.

The end to be attained by the diffusion of economic education may be inferred from the foregoing remarks. As Mises says, it is not a question of turning every citizen into an economist; it is simply a matter of preparing him to perform his civic duty so that he can come to an informed and judicious decision concerning the discussions and proposals with which we find ourselves daily confronted at the present time. Knight correctly observes that what is most depressing about the policy of price control, as applied, for example, to the freezing of rents, is not the fact that the tenants possess a greater number of votes than the landlords, but the state of mind and the benighted reasoning it reveals.

This book of Dr. Faustino Ballvé is small in size, but it constitutes an excellent first step, in the Spanish language, in the direction indicated in the preceding lines. Indeed, even in other languages, elementary introductions to economics or works in which it is explained with the educational purpose I have mentioned are exceedingly rare. To write them requires not only a broad background of knowledge, but perspective; not only a complete mastery of the material, but the ability to simplify and a kind of talent that is by no means common. Perhaps the reason why Professor Ballvé has so well fulfilled the task he set himself is that, besides having studied economics in the lecture hall and the library, he has had the opportunity of applying it and of seeing its results as a civic leader and a holder of public office, and that to his studies in economics he adds a knowledge of the law and a career as a member of the bar. In any case, all of us who think that there is no more vital job at present than that of defending freedom, which is one and indivisible, and for that reason quite inconceivable and impossible in the absence of economic freedom, owe a debt of gratitude to him for this book.

Gustavo R. Velasco