Ludwig von Mises: The Logician of Freedom

[The Austrian School of Economics (2011)]
 

There is a photo in his wife’s published memoirs showing Ludwig von Mises taking a stroll through the “Prater” in Vienna.[1] It is August of 1901. You see a slim young man of medium height in imperial uniform. He is carrying an impressive sword, wearing a helmet richly decorated with golden braid and emblems, high boots, riding breeches, and a close-fitting jacket, buttoned up right to the top. His lips, which are adorned by a small mustache, form a whimsical smile. Mises was just 20 years old. Looking at later photos, one gets the impression that he found it increasingly difficult to smile. His face displays a melancholy, introverted expression — something austere and sensitive at the same time. One sees a man who appears unrelenting but vulnerable.

For a long time, maybe too long, he lived with his mother (ibid., pp. 23–25). At the age of 57 and shortly after his mother died he ventured into a late marriage with his long-standing girlfriend Margit Sereny-Herzfeld, whom hardly anyone had known about for over a decade. They married in Geneva. The witnesses were Gottfried von Haberler and Hans Kelsen, a former school associate, who could hardly believe he was seeing his friend at the office of the county clerk (ibid., p. 41).

Margit von Mises, who had two children from a previous marriage, describes her “Lu” as tender and modest and in need of love, withdrawn and dejected, but sometimes also as irascible and quick-tempered (ibid., p. 44). She neglected her own professional ambitions — she was an actress, dancer, and translator — in order to look after her husband and enable him to work undisturbed and in comfort. The household remained small and modest, but this did not infringe upon the couple’s affectionate ways. The scholar had found his muse, and she hers. She let him work as much as he wanted. They usually went on lecture trips together, spent their vacations in the mountains and remained devoted to each other into old age. Only once did his wife have to be firm with him: she forbade him from driving a car ever again after an act of carelessness at the wheel had caused injuries to her face and broken five of his ribs (ibid., p. 100).

Ludwig von Mises, whose great-great-grandfather had been knighted by Emperor Franz Joseph, came from a family of assimilated Jews. He was born in Lemberg, Galicia, in 1881. A few years after his birth, his father took over a senior position in the railway ministry in Vienna. At the age of ten, Ludwig witnessed the serious illness and death of one of his younger brothers. His relationship with his brother Richard, who later became a famous mathematician, remained strained all of his life. Ludwig attended the Akademisches Gymnasium, studied law, and after a short term as a project supervisor in the civil service in 1909, began his career at the Viennese Chamber of Commerce. As an ordinary civil servant of the chamber administration for the next 35 years — where he received lifetime tenure, making it impossible for him to be dismissed under Austrian civil service law — he effectively became one of the country’s leading economists. In his role of economic adviser he came into regular contact with government members. In late-night discussions in the winter of 1918–1919, for example, he was able to convince Otto Bauer, the leader of the social democrats, to thwart a “Bolshevist experiment” in Vienna (Mises 1978/2009, pp. 62–63). During this time he met and became friends with Max Weber (1844–1919), who had begun to teach at the University of Vienna after the war, but died unexpectedly soon afterward.

Influenced by Carl Menger and Eugen von Böhm-Bawerk, Ludwig von Mises devoted himself to the ideas of the Austrian School even as a young man. In 1912 he achieved his Habilitation with his Theorie des Geldes und der Umlaufsmittel (The Theory of Money and Credit). The broadly-reaching economic subjects he dealt with subsequently “were mostly problems for which he considered the prevailing opinion false” (Hayek in Mises 1978/2009, p. xvi). Mises did little to conceal the fact that he felt nothing but contempt for quite a few of his fellow economists. His opinions, in particular those concerning German tenured professors, were severe and ruthless. In social democratic post-war Austria he only managed to gain a post as an unsalaried lecturer. The new ruling powers resented him bitterly for his emphatic opposition to all forms of collectivist ideology.

In 1927, along with fellow campaigner Friedrich A. Hayek and with the support of his employer, Mises succeeded in founding the independent Österreichisches Institut für Konjunkturforschung, the precursor of today’s Österreichisches Institut für Wirtschaftsforschung (Wifo). His private seminar, which he held every second week in the Viennese Chamber of Commerce and from which, between 1921 and 1934, the next generation of the Austrian School — including economists, lawyers, and sociologists like Gottfried Haberler, Felix Kaufmann, Fritz Machlup, Oskar Morgenstern, Paul N. Rosenstein-Rodan, Alfred Schütz, Richard Strigl, and Eric [Erich] Voegelin — would emerge, helped to reestablish the Austrian School after World War I (Mises 1978/2009, p. 83). His students valued Mises as a thoughtful and inspiring teacher. They met regularly after these fortnightly sessions in a nearby bar where the discussions continued. Despite being without a doubt an academic outsider, Mises regarded himself as the “economist of the land” (ibid., p. 60).

Mises accepted the offer of a guest professorship in Geneva in the spring of 1934 after the Nazis had gained power in Germany. As a civil servant of the Viennese Chamber of Commerce, he took advantage of an early retirement, but until 1938 remained in contact with his employer, under whose mandate he advised the Austrian government and central bank. On the evening of the annexation, Nazis broke into his apartment and seized his library and papers. His writings were a thorn in the side of all manner of collectivists: socialists, communists, national socialists, fascists, and later also the advocates of the so-called welfare economy in Europe and the United States. He would see neither his library nor his notes and manuscripts again.

While in Geneva, aside from teaching, Mises dedicated himself primarily to the completion of his magnum opus, Nationalökonomie: Theorie des Handelns und Wirtschaftens (1940/1980). As a result of the confusion caused by war and the bankruptcy of his Swiss publisher, however, it remained largely unnoticed. In the same year, he fled with his wife via impossible routes from Geneva via France — with Nazi henchmen on their tails — to Spain, Portugal, and finally to New York. In the United States, Mises, now almost 60 years old, had to make do with his savings and small scholarships. But international, political events and, if nothing else, being forced to leave his home country, were particularly hard to deal with. The couple had to pick up and move several times within a short period. The fact that he had learned English only by reading also created some problems for him at first. He considered it good fortune to accept, with gratitude, the US citizenship that was conferred upon him a few years later. In 1945 he secured a post as visiting professor at New York University, where he, until 1969, schooled further “Austrians” such as Murray N. Rothbard (1926–1995) and Israel Kirzner (b. 1930).

Once in New York, Ludwig von Mises resumed the task of publishing his work. Omnipotent Government (1944), Bureaucracy (1944), and Planned Chaos (1947) appeared in speedy succession. Human Action: A Treatise on Economics (1949), the revised English edition of his magnum opus Nationalökonomie (1940), gradually brought him the success he had longed for. In these, as also in earlier and later works — The Anti-Capitalistic Mentality (1956) and Theory and History (1957), for example — Mises always proved to be an astute observer and thinker who remained true to his principles. He anticipated some developments as logically foreseeable consequences long before they actually happened, for example, the world depression at the end of the 1920s, the economic failure of fascism, national socialism and, in particular, Soviet communism. Because of his radical, liberal stance, he rejected state intervention in the economic process and wrote emphatically against statist claims throughout his lifetime. He distanced himself explicitly, however, from anarchism. Nevertheless, the effect of his ideas over time was that libertarian and anarcho-capitalist movements in the United States would choose Ludwig von Mises, the tenured, civil servant from Austria, to be one of their intellectual forefathers.

Mises’s opponents, who were always in the majority, categorized him as obstinate, intolerant, and extreme. His students emphasized the intellectual openness and broad-mindedness which prevailed in his private seminar. He remained convinced that his theses reflected truth and that his work was meaningful, even though it brought him neither wealth nor academic glory during his lifetime. His work exhibits a rare clarity and straightforwardness independent of political circumstances and fashions of the time. He finally retired from teaching at the university at the age of 87; he died in New York a few years later (1973) at the age of 92. He claimed to have — quite atypically for an Austrian — attempted the impossible: “I fought because there was nothing else I could do” (Mises 1978/2009, p. 76). And throughout his life he remained loyal to the motto he had chosen early on: Tu ne cede malis, sed contra audentior ito (”Do not give in to evil but proceed ever more boldly against it.” Virgil, Aeneid, vi, 95).

This article is excerpted from The Austrian School of Economics (2011), chapter 17: “Ludwig von Mises: The Logician of Freedom.”

• 1 The Wiener Prater is a large public park in the second district of Vienna, referred to simply as the “Prater” by locals.