16. The Geneva Years

THE ECONOMIC CRISIS HEIGHTENED political antagonisms throughout Europe. Fewer and fewer citizens believed democracy could meet the current challenges. Only two alternatives seemed available, both based on violence: either the dictatorship of the proletariat (or more precisely the dictatorship of labor union bosses and socialist party leaders), or an authoritarian dictatorship bent on restoring the old order.

In the wake of a financial scandal, on February 6, 1934, two right-wing mass organizations demonstrated in the streets of Paris. The angry mobs tried to storm the Palais Bourbon, whereupon the police opened fire, killing fifteen and wounding many hundreds. The French government under Daladier stepped down, and the violence spread to other countries, including Austria.

Mises later said that it was the growing power of the Nazi party in Austria that prompted him to leave the country.¹ With this remark, he did not refer to the government of Engelbert Dollfuss, which had reintroduced authoritarian corporatism into Austrian politics to resist the socialism of both the Marxist and the Nazi variety. Mises meant the Austrian branch of the National Socialist German Workers Party, which enjoyed strong backing from Berlin and fought a daily battle to conquer the streets of Vienna. Dollfuss's authoritarian policies were in his view only a quick fix to safeguard Austria's independence—unsuitable in the long run, especially if the general political mentality did not change.

In March 1934, Mises was delighted to receive an offer from the Geneva-based Graduate Institute of International Studies to become a visiting professor of international economic relations. He accepted immediately.² However, he did not flee Austria, as he would when the Nazis seized control of the country four years later. He moved to Geneva in disgust, but he considered the move temporary.

Mises had been an employee of the Kammer long enough to qualify for early retirement, but he did not wish to burn his bridges and eventually arrived at an agreement according to which he would do some work for it during his school vacations and be paid half his former salary.³ In early December 1934, he returned to Vienna for the first time and worked some weeks in his old position. Thereafter he continued to work as a consultant and liaison officer for the Vienna Kammer.

He often came to the Austrian capital in the middle of the week, for one or two days. Whenever he was in Vienna, he visited with Margit. She was still waiting for him; he could not make his mind up about proposing. For another three years, their love could not get out from under the shadow of his mother.