Academic Life

Rappard quipped that the Institute owed the excellence of its teaching staff to Hitler and Mussolini. A case in point was Guglielmo Ferrero, who had been under house arrest in Italy before coming to Geneva as a professor of history; and it was also true for men like Mises, Kelsen, and Röpke, who found in the Institute a political safe haven. In Kelsen's case, language also played a role to the extent that he was fluent in French, but had difficulties with the English language.¹⁴ Mises's command of English was also much weaker than his French.

Once they located on the shores of Lake Geneva, these refugee scholars discovered that their new school also offered a congenial social and intellectual atmosphere. Mises arrived in the fall of 1934 and took an apartment on 16 chemin Krieg—literally the “war path”—but after the first extension of his visit, he moved to nicer accommodations on 3 chemin Dumas. At that point, the permanent faculty featured, in addition to Rappard and Mantoux: Eugène Borel, Mack Eastman (economics), Hans Wehberg (international law), Maurice Bourquin (diplomatic history), Pitman Potter (political science), Paul Guggenheim (international public law), Guglielmo Ferrero (modern history), Carl Burckhardt (modern history), and Hans Kelsen (law). The personal relationships among these men appear to have been extraordinarily cordial—by the standards of academic life at any rate. What is amazing is that there was something like a social life there at all—these famous scholars did what other professional groups did as well: exchange visits, entertain one another at home, and become acquainted with the family members of their colleagues. And they liked it. Mises was apparently most at ease with Rappard, Mantoux, Bourquin, and Ferrero.¹⁵

He also associated with scholars from the League of Nations's Economic Intelligence Unit (Loveday, Haberler, Tinbergen, Meade, Koopmans, Polak, Fleming, Nurkse, Condliffe, and Hilgerdt), the International Labor Office (Karl Pribram), and the Geneva Research Center (John B. Whitton). The most immediate common bond among these groups was that they all depended on funding from the Rockefeller Foundation, which in those very years launched a massive international program of business-cycle research with a special focus on economic stabilization. The Foundation not only funded the economists working at the League of Nations and at Rappard's Graduate School, but also business cycle institutes in Louvain, New York, Paris, Sofia, Vienna, and Warsaw. Its officers were careful not to impose any research agenda, but their wishes could not be ignored. Thus a group of financially endowed laymen had a decisive impact on the path that business-cycle research would follow over the course of the coming decades. The League's authority and Rockefeller's money gave leadership to people such as Alexander Loveday and Alvin Hansen; business-cycle research would henceforth be conducted with an increasingly quantitative orientation.¹⁶ By the time Mises moved to Geneva, he was already an anachronism—a vestige of the early Rockefeller involvement in the social sciences.

These developments were noticeable but not yet dominant in 1934. Mises and others could conduct their research as they saw fit, and in Geneva they could do it under the most pleasant circumstances. Much of the Institute's conviviality was related to size: throughout the 1930s, the school remained small and virtually free from the plague of bureaucracy—its administration counted a mere six heads and one part-time accountant. Student numbers almost never exceeded 100 and just under half of them were enrolled in the doctoral program. The permanent faculty had twelve members at its peak in 1938—including Rappard and Mantoux.¹⁷ These residential scholars were complemented by one or two visiting professors who stayed for a semester or a year, and there were also guest lecturers who gave high-profile short courses, which typically ran for a week. The combination of these circumstances made for something approaching academic paradise. Rappard explained the recipe:

I know of no better... means of being useful to advanced students... than placing at their disposal as completely and as informally as possible the most eminent specialists available. If these specialists are well chosen, not only for their intelligence and erudition, but also for their character, and if they are made to realize that their sole professional duty is to contribute to the progress of science through their own work, and to advise and assist the advanced students... I believe our job is practically done.¹⁸

Each professor was free to choose the subject of his courses and seminars. The only constraint was to give from time to time some introductory class for non-specialists. In practice this meant that Mises, on top of the three hours he was required to teach anyway, occasionally had to give an introductory course on economics for non-economists, which he did in rotation with the other economists.

The school occupied the basement and first floor of the splendid Plantamour mansion, located on the border of the old city center at 5 Promenade du Pin. Mises started lecturing on October 25, 1934. He gave a two-hour seminar on International Finance, and a one-hour course on “The International Aspects of Monetary Policy,” which he held Thursdays from 5:15 to 6:00 p.m. In one of the first sessions, on November 15, 1934, he gave his inaugural lecture on the gold standard and the problems of controlled currency.

Apart from the three hours of required teaching, Mises was free to pursue his research as he saw fit—and all of this at the very comfortable annual salary of 25,000 Swiss francs or 233.375 oz of gold, which corresponded to some US$8,177 in the 1930s and fifteen times as much in our day.¹⁹

For years he had told his students that high salaries combined with few obligations were the prime factor for the low productivity of university professors. (And a few years after he had gone to Geneva, Hayek told him about a discovery he had just made: Adam Smith too had held this opinion of the consequences of high salaries for academics!²⁰) Now was the opportunity for Mises to prove himself wrong by finally writing his general treatise on economic science—a project he had postponed twenty years earlier in anticipation of the coming war.

His appointment and the lectures on money coincided with the publication of the English edition of his monetary treatise. After many years, Batson had finally completed the translation with Robbins's help and published the work under the title The Theory of Money and Credit. It was the first foreign edition of a Mises book—perfect timing to support the new professorship in international economic relations. Mises had pursued a hands-off policy with his translator, a policy he maintained for the rest of his life. But while laissez-faire is an unshakable maxim as far as the limitation of governments is concerned, it does not always apply in private affairs. Many years later, Mises complained in correspondence with a young colleague from Austria that good translators were hard to find. “I am outright horrified about the sense-distorting errors that I have found in French and German translations of my English publications, and in English and French translations of my German books.”²¹ In the present case, for example, the title of the English edition: “theory of money and credit” certainly made for smoother reading than the more literal “theory of money and fiduciary media,” but it blunted the title's edge. The point of the original title was precisely to highlight the particular character of fiduciary media, which the book showed distorted the operation of a monetary economy.

For future scholarship, Mises had to develop his English. In a letter to Machlup he observed that one of the practical consequences of Hitlerism was to reduce the importance of the German language.²² The future belonged to English, and to practice, Mises decided to give his Institute lectures in English instead of French. In light of subsequent events his decision turned out to be extremely fortunate. It was the general policy of the Institute that professors and students were required to understand both French and English, but it was customary to speak the language in which one felt most at ease. It was therefore entirely normal that a question be asked in English and the answer given in French. Similarly, in written examinations students could use either language, regardless of which language had been used for the question. Even greater liberties existed for written homework and doctoral dissertations, which could also be written in German or Italian.²³

But Mises did not master the English language. Tape recordings made in the late 1950s and early 1960s reveal a very strong accent even after some thirty years of lecturing in English. One might therefore assume that his early lectures in Geneva were quite a challenge to the patience of his audiences. Mises did his best to compensate for his linguistic deficiencies by writing his lectures out in advance, but his delivery remained poor. He was a solid lecturer, but never a brilliant one, and could not compete in the classroom with charismatic speakers such as Bourquin and Rappard, who impressed and overwhelmed their audience through personality and oratorical skills. Harvard graduate Parker T Hart, who attended the Institute in 1935–1936, wrote a revealing student evaluation. At the end of his first semester, Hart did not even mention Mises, but at the end of the second semester, he praised him in the following words:

I have gradually come to the conclusion that Professor Mises ranks as one of the best here, as an analyzer of current economic problems. The title of his course is likely to have little relation to the topics treated, but his lectures are always stimulating and lucid—and, as a unique feature—always carefully written out in advance. His English leaves a good bit to be desired, from a grammatical point of view; and a first impression is likely to be unfavorable. However, his vocabulary is rich and his meaning always clear. In short, he “wears well” indeed; and for those interested in the economic riddle left by the break-up of the old Austro-Hungarian Empire he has an especially valuable contribution to make. Best of all, he is able to enliven his discussions and lectures by concrete experience and first hand observations drawn from wide travel and research “on the spot.”²⁴

The report suggests one of the reasons why he did not produce any outstanding students during his years in Geneva. An even more important reason was the typical mindset of the students at the Institute, who were eager to obtain employment in an international organization—that is, in a government bureau. It is safe to assume that such students were not especially receptive to Mises's message. His two best-known students from these years became experts in the economics of war: Stefan Possony and Edmund Silberner.²⁵

Still, overall relations between Mises and his students were quite good, reflecting the general atmosphere in the Plantamour mansion. A student who was at the Institute during Mises's first two years later recalled a scene from one of the soirées that brought students and faculty together playing charades:

Monsieur Mantoux found himself paired with Roland Sharp in the role of the classical lovers, Leander and Hero. Sharp, despite his little black moustache, managed to achieve a certain feminine charm by tying a bright red ribbon around his hair, mounted a chair behind a high screen, and held aloft a candle to light the way for Leander. Monsieur Mantoux bravely cast aside his coat, crossed the Hellespont with a vigorous swimming motion on the floor, and won both first prize of the evening and an abiding place in our hearts as one who was not only a distinguished scholar but also a very good sport.²⁶

Mises also had great fun pursuing a new hobby: driving. While in Vienna all of his activities took place within the confines of the city center, his new life in Geneva required greater mobility. To make excursions into the mountains and into France, he needed an automobile. At some point in 1935 or 1936, he must have started taking lessons. In late 1936, he had obtained his driver's license and a car. During his training he had become so enthusiastic that he bought his first vehicle—a black eight-cylinder Ford called “Grand Tourisme Luxe”—some six weeks before he got his license.²⁷ The initial rides he took only with a chauffeur; then step-by-step, he set out for excursions on his own. His first guest for a day tour was Heilperin. And in the spring of 1937, he set out with Margit for a two-week vacation to the Côte d'Azur.²⁸ He was and would always remain a poor driver, but he greatly enjoyed it nevertheless. And he truly wanted to share his new passion with the woman he loved. He made arrangements for Margit to take driving lessons in Vienna.²⁹ Together they spent many happy hours on the road.