This discussion by Ludwig von Mises of capitalism, happiness, and beauty has something of the “one simple principle correctly resolves everything” quality that tends to disfigures libertarian thought, so it’s no credit to the Mises Institute that they’ve chosen to give it special prominence.
The issue is artistic life under “capitalism,” by which I suppose Mises means a regime of private property, free markets and post-industrial revolution technology in which economic concerns are foremost. It seems that what’s happened under that regime, which has been dominant in the West since the French Revolution, is that the arts at their highest levels detached somewhat from the social order, became eccentric, went to extremes, and eventually died.