In 1981, when I was thinking about starting the Mises Institute, the two things that really motivated me were, one, that I thought that the Austrian school was diminishing in influence in this country and other countries. The other thing: I thought that Mises, who I thought was such a great hero, was no longer being recognized. I thought that was an alarming and quite a terrible thing.
So, I asked Mrs. Mises to her favorite restaurant, which was the Russian Tea Room, and asked her if I succeeded in founding this institute, would she be our chairman? She said, “I know you‘re just interested in my name, you‘re not interested in anything else.” And I said, “No, no, I am interested in what you would have to say.”
Murray Rothbard had told me that she was a one-woman Mises industry in terms of getting his books published, and just an extraordinary lady. So, I told her I was interested in her playing an active part in the Institute. And she indeed did that and it was a great honor to know her.
In 1998, Murray Rothbard wrote a great monograph called the Ludwig von Mises: Scholar, Creator, Hero. I’d like to concentrate today on the third of the qualities, Mises as a hero.
Mises was indeed one of the greatest heroes of the 20th century. His advances in economic theory are immense. He integrated the two main branches of economics by demonstrating the origins of the value of money. He demonstrated that socialist doctrine was contrary to economic logic. He showed us that business cycles stem from central bank mismanagement. He set out the philosophical foundations of economic science itself.
All of these would have been enough. But assessing greatness is about more than weighing the relative importance of scientific discoveries. Mises is a singular person in the history of ideas not only because of what he explained, but also because of what he fought. He waged a fierce intellectual battle against every destructive political ideology and economic fallacy of the last century and paid a huge personal price as a result. Truth, not fashion or fame, was his guiding light.
Mises was denied a paid professorship at the University of Vienna despite publishing the astounding Theory of Money and Credit. Before the founding of the Fed, he demonstrated that such a central bank would harm business, and people, and the government and the its cronies, as well as bring on the business cycle and artificial booms followed by busts.
Mises was an army officer during the war and, at first, he was an economics advisor to the general staff. Then he was sent to the most dangerous duty in the war and almost killed. Guido Hülsmann, author of the great Mises biography, discovered that the power of Mises’s free market ideas led to his corrupt and statist opponents hoping to kill him. There was a lot of money at stake. Still, the wounded Mises was decorated for bravery under fire and as a great leader of men under brutal attack.
After the war, Mises assumed a position as an economic advisor to the government for the Vienna Chamber of Commerce which was a government agency, and not the sort of thing we have in the Chamber of Commerce in this country. He had been blocked from a position at the university by powerful socialists and instead worked as a privatdozent—that is, a private teacher who could give university classes—and afterwards an associate professor at the university. Both were unpaid positions. Unpaid or not, he used it to teach students and to hold his famous private seminar which attracted top intellectuals from all over Europe. They remembered it as the most interesting, intense, rigorous, and fun experience of their academic lives.
Though working, in effect, two full-time jobs, Mises threw himself into his work as an economic advisor and to call for a fully-redeemable gold standard. The central bank was furious. It turned out that the then-current system allowed officials to have a secret slush fund for themselves and for friendly economic journalists. The vice president of the bank called Mises into his office and hinted at a big bribe for Mises if only he would be a little more accommodating, and to compromise. Of course, then and throughout his life, he never would be accommodating.
The power of Mises’ influence as an economic advisor was shown in two more important ways.
Austria threatened to follow Germany into hyperinflation. Almost single-handedly, his persuasion prevented a repeat of this in his country, if not of all inflation, then of the speed and depth of the German catastrophe.
After the war, a coalition government in which, in part, Marxists came to power in Austria. Otto Bauer, a leader of the Austrian Social Democratic Party and foreign minister, intended to introduce Bolshevism into Austria. But he listened to his old school chum Mises, something Bauer later utterly rejected and regretted in later years. Evening after evening, Mises persuaded Bauer, and his equally-Marxist wife, that Bolshevism would mean mass starvation. Bauer was convinced.
In his notes and recollections, Mises said that of this episode, “Otto Bauer was too bright not to realize that I was right, but he never forgave me for having turned him into a Millerand.” (Millerand was a French radical socialist who collaborated with a bourgeois government.) The attacks of his fellow Bolsheviks hit close to home, but “he directed his animosity towards me,” said Mises, instead of towards his opponents. “A powerful loather, he opted for ignoble means to destroy me.”
At this time, Mises was also trying to do his scholarly work, and he did, while also paying full attention to his day job. In what was normally his leisure time, for example, he wrote first his work in the historic article of his book on socialism.
Just after the establishment of Bolshevik Russia, he proved that with no private property in the means of production, socialism would be a chaotic and poverty-producing disaster. In all the debates over socialism, he alone cut to the heart of the matter. Socialism doesn’t qualify as an economic system because it works and seeks to abolish economics, he said:
Whoever prefers life to death, happiness to suffering, well-being to misery, must fight socialism and defend without compromise capitalism, that is, private ownership of the means of production.
But the evil of statism also grew from another direction, and Mises was the first to see what was in store for Austria with National Socialism. Many colleagues, indeed, credited him with saving their lives, having warned them in time to get out. In 1934, Mises secured his first and only paid professorship in his life at the International Graduate School in Geneva. It was a happy time for Mises who lectured in accentless French and wrote in German.
But by 1940, he was getting uncomfortable in Switzerland. Already in 1938, the invading Nazis had ransacked his Vienna apartment and stolen his library and papers. Mises and his wife, Margit, later the first chairman of the institute, decided to go to America. They crossed France barely in front of the advancing German armies—it looked like something out of a movie—just making it into neutral Portugal and then on the ship to New York.
Once here, in an academic community offering professorships to all the European Marxists and the Keynesians, it was nothing for the “neanderthal,” “reactionary,” “caveman” Mises. The intellectual climate of the New Deal was bitterly hostile. Even when the libertarian Volker fund offered to pay his entire university salary, Mises was shunned for defending freedom and capitalism.
Finally, businessman Lawrence Fertig, later a benefactor of the Mises Institute, was able to persuade NYU, where he was on the board, to allow Mises to be an unpaid, permanent “visiting professor.” Even so, Keynesians gave him the worst offices, class hours, and actually lobbied students not to take his classes.
John Sawhill was the first dean who did this and he was later Nixon’s first energy czar—a great guy.
But though in a new country, almost sixty, with only a reading knowledge in English, Mises was undefeated. He never compromised his principles. He just moved ahead—uncomplaining, undismayed, and unhindered. It was in the 1940s that Mises completed his monumental treatise, Human Action, in which he reconstructed all of economic analysis on a sound individualist foundation. By the way, one of the most interesting things about Human Action to me has always been that it was an alternate selection of the Big Book Club in those days.
Mises was, in essence, a lovable person. He didn’t suffer fools gladly in Vienna—or so they said. But, in this country, he was very just, sweet, interesting, happy to help anybody who wanted to learn, and happy with his unpaid position at NYU.
Mr. Fertig, the Volker Fund, and others had donated the money to pay his salary, and he was very happy with it. Although he never got any kind of health insurance or anything else from NYU, he had wonderful people who put up the money in his salary and—thank goodness for that—Mises taught there for many years.
His seminar included Murray Rothbard, Ralph Raico, Ronald Hamowy, Bettina Greaves, and many other important people.
The late Robert Nozick, in a speech on the 100th anniversary of the birth of Mises, talked about why it was that the people at NYU hated Mises so much. Nozick thought one reason was that he attracted smart, achieving people to audit his classes—people who were big wheels on Wall Street and in corporations. These professors had never seen anything like it. Certainly nobody ever came to audit their classes. And they were very envious and hateful of Mises for that, but he just ignored them and did his work as always.
It was one of the great moments in my life when I met Mises. I only met him once, and had dinner with him in Margit while serving as his editorial advisor. That came about through the great Neil McCaffrey, who was the president and founder of Arlington House Publishers, the only publishing house in the country at that time that published either conservative or libertarian books.
He called me into his office, and said, “How you‘d like to be Ludwig von Mises‘s editor?” Holy smokes, I was twenty-three and, of course, was thrilled. We were going to bring back into print three of his books that had gone out of print—Theory and History, Bureaucracy, and Omnipotent Government—and also a monograph on the history of the Austrian school that he had written, and was a new publication.
In honor of the publication of these three books, the great Leonard Read held a reception at FEE. I love Leonard Read, and I‘m glad somebody else mentioned him today. He is a very important man in my life, a great man in libertarianism for his founding of FEE, for his support of Mises, and for all the things that FEE did while he was there.
In those days, FEE was a magnificent mansion in Irvington-on-Hudson, in New York, and had a great big dining room. So, they called people ready to go to dinner, and most people were still having drinks. So, I got my tray, and I went into the dining room, and the only people in the dining room were Ludwig and Margot von Mises. They were sitting at a table way at the end and I thought, “Do I go see them?” I talked to Mises several times on the phone, many times to Margot, but I never met either one of them, but of course I did go to talk to them.
Murray Rothbard later described Mises as a representative of an older and a better world—in his manners and his looks, in his intellectual life. He was just really extraordinary, and it was great to meet Mrs. Mises, who had been an actress, and really knew how to present herself, and she was a great-looking lady, although an elderly lady. Mises—his tie, his clothes, his manners, his manner of speaking—as everything you might want to be, I mean, he was just such an extraordinary man, and very kind to answer, I‘m sure, what were dumb questions by a 23-year-old.
I’d like to close with a magnificent comment that the late Ralph Raico—himself a great scholar, whom we miss very much at the Mises Institute—had to say about Mises after Mises’s death:
No appreciation of Mises would be complete without saying something, however inadequate, about the man and the individual. Mises’s immense scholarship, bringing to mind other German-speaking scholars, like Max Weber and Joseph Schumpeter, who seemed to work on the principle that someday all encyclopedias might very well just vanish from the shelves; the Cartesian clarity of his presentations in class (it takes a master to present a complex subject simply); his respect for the life of reason, evident in every gesture and glance; his courtesy and kindliness and understanding, even to beginners; his real wit, of the sort proverbially bred in the great cities, akin to that of Berliners, of Parisians, and New Yorkers, only Viennese and softer—let me just say that to have, at an early point, come to know the great Mises tends to create in one’s mind life-long standards of what an ideal intellectual should be.
Mises’s standards to which other scholars whom one encounters will never be the equal. And, indeed by which the ordinary run of university professors at, say, Chicago, Princeton, and Harvard, is simply a joke and it would be unfair to judge them by such a measure. Here we are talking about two entirely different sorts of human being. Ralph applied to Mises some lines from Shelley’s poem “Adonais,” and when Murray Rothbard reads these lines he would invariably choke up, because, of course, he loved Mises and had a similar view to Ralph of him.
So as Shelley wrote in his poem,
For such as he can lend—they borrow not
Glory from those who made the world their prey;
And he is gather’d to the kings of thought
Who waged contention with their time’s decay,
And of all the past are all that cannot pass away.
Thank you.
This article is adapted from Rockwell’s speech delivered at the Mises Institute Supporters Summit in Los Angeles, California, October 26, 2019.
