Does the instability that plagues the interventionist mixed economy also confront the minimal state? Mises, for one, did not think so.
Although he argued that a policy of interventionism is “contradictory and illogical” since “any attempt to introduce it in earnest must lead to a crisis from which either capitalism or socialism alone can emerge” (Mises 1977:37), Mises also maintained that “measures that are taken for the purpose of preserving the private-property order are not interventions in this sense” (ibid.: 17). Thus, for Mises interventionism obtains only after state activity exceeds the minimum necessary to promote social cooperation and coordination within the market process; state activity within these limits does not constitute interventionism. He evidently believed the minimal state to be immune from interventionism’s inherent contradictions, and took it for granted that such a state is both stable and perhaps even in some sense “optimal.” Yet notwithstanding Mises’s position, the investigations into the dynamics of the mixed economy of the previous two chapters do seem to suggest that similar forces could very well also, under the proper conditions, destabilize1 the minimal state.