Mises never tired of telling his students and readers that trends can change. What makes them change are the choices we make, the values we hold, the ideas we advance, the institutions we support...Unlike Mises, we do not face obstacles that appear hopelessly high. We owe it to his memory to throw ourselves completely into the intellectual struggle to make liberty not just a hope, but a reality in our times. As we do, let us all adopt as our motto the words Mises returned to again and again in his life. “Do not give in to evil, but proceed ever more boldly against it.” — Lew Rockwell (1998)
These were Rockwell’s closing words in the speech he gave to guests who had come to Auburn, Alabama, to participate in the opening of the Ludwig von Mises Institute’s new facility across the street from Auburn University. The Mises Institute had operated on the campus of Auburn since its opening in 1982. That move across the street was symbolic of its institutional independence from the bureaucratic restrictions of academia.
This was a world apart from Mises’ world in 1940. He arrived in the United States with no job. He was 59 years old. He seemed to be at the end of his career. He had just fled with his wife from Switzerland, where he had an academic position at the Graduate Institute for International Studies in Geneva. He had held that position since 1934. That was the first paid position in academia he had held. He left Austria because he feared a Nazi takeover, which happened four years later. In the summer of 1940, his wife insisted that they flee to the United States. The World War had begun the previous September. She feared that the Nazi government would successfully pressure the Swiss government to force them to return to Austria. That would be a death sentence for Mises.
In a harrowing bus ride across France, with the Nazi army close behind, they made it to Spain, then to Portugal, and then to New York City. He knew Henry Hazlitt, the business columnist for The New York Times. He knew few others. He had no prospects. In this, the low point of his life, he began to write a memoir. It was not published in his lifetime. In it, he penned these memorable words:
From time to time I entertained the hope that my writings would bear practical fruit and point policy in the right direction. I have always looked for evidence of a change in ideology. But I never actually deceived myself; my theories explain, but cannot slow the decline of a great civilization. I set out to be a reformer, but only became the historian of decline.
In 1945, he was appointed visiting professor of economics at New York University’s Graduate School of Business. He taught full time until his retirement in 1969 at the age of 88. He taught a new generation of disciples, including Murray Rothbard, Hans Sennholz, Israel Kirzner, and George Reisman. Reisman is still writing.
He is not remembered as the historian of the decline. He is remembered as the developer of the Austrian theory of the business cycle (1912), the economist who first described analytically why socialism is irrational and must always fail unless it compromises with the free market (1920), and the author of the first comprehensive treatise analyzing the market process as an integrated system of resource allocation: Human Action (1949).
Rather than being the historian of the decline of the free market social order, he was the oncologist who announced to socialists everywhere: “Get your affairs in order.” In his classic 1920 essay, “Economic Calculation in the Socialist Commonwealth,” which the Mises Institute makes available online, he showed why socialist planning is inherently irrational. It has no system of market-generated prices, especially capital prices. The planners do not know what anything is worth unless they copy prices in free market societies.
The academic world for the most part ignored his arguments. A few economists dismissed his arguments in the 1930’s. But Deng Xiaoping came to the same conclusion in 1979 when he established free markets for agriculture, thereby launching the most remarkable example of rapid and sustained economic growth in the history of large nations. Then the economic crisis of the Soviet Union in the late 1980’s led to the dissolution of the USSR on December 25, 1991. Mises’ disciple F. A. Hayek lived to see this. Hayek had been persuaded in the early 1920’s to abandon socialism as a result of reading Mises’ article and his book, Socialism (1922).
There are few socialist economists remaining. There are millions of voters who call themselves socialists, but they cannot describe the system they claim to support. The word “socialism” is merely a slogan for “tax the rich and expand the state.” There are no treatises on exactly how the system can be imposed, and how its system of resource pricing and institutional sanctions can achieve the stated goals of its advocates.
The Mises Institute
The Mises Institute, more than any other organization, keeps his memory alive. But it does far more than this. It extends his analytical system by means of continual book publication, a scholarly journal, online videos of scholarly lectures, hosting a pair of annual week-long seminars -- one for undergraduates and one for graduate students -- as well as an annual week-long gathering of scholars who read and listen to academic presentations. It offers free summer mentoring by published scholars for young economists who are completing their Ph.D. dissertations.
Its influence continues to grow. The general public has access to the publications and videos. These materials are readable by intelligent non-specialists, unlike the scholarly journals and monographs written by most academic economists. They write for each other, not the general public. Mises’ message of the relationship between liberty, the free market, and economic growth can be understood by non-economists who devote to self-study. This gives Austrian School analysts a distinct advantage whenever the inevitable recessions come in the wake of flawed central bank policies. The Austrians explain exactly why these policies have again failed: the substitution of political power for the market process.
Mises always maintained that the war for liberty is won or lost on the battlefield of ideas.
Conclusion
In Socialism, Mises warned against despair in the face of socialism.
Nothing has helped the spread of socialist ideas more than this belief that Socialism is inevitable. Even the opponents of Socialism are for the most part bewitched by it: it takes the heart out of their resistance (p. 282).
We must resist. The first step in successful resistance is this: we must not make the same mistake of assuming that the victory of Keynesianism, the welfare state, the Deep State, administrative law, or the New World Order is inevitable. It is not. Each of them has built into itself the seeds of its own destruction.
This outlook of optimism is a major legacy on Mises. His pessimism in 1940 was an aberration.
