Arrival in New York

On August 3, 1940 the ship docked in New York City. Mises had not been there since 1931 when he had attended a conference of the International Chamber of Commerce in the midst of the Great Depression. In that year, he had come as a distinguished representative. Now he arrived almost empty-handed. Fifty-eight years old, he had to start his life anew. The worst year of his life lay ahead.

Friedrich Unger had booked them a room, and Alfred Schütz was waiting for Ludwig and Margit at the dock. Their happiness upon seeing him was short-lived. Schütz had the unpleasant task of delivering a letter from Robert Calkins, the dean of UC Berkeley, who told Mises that the school had no budget to hire him. They could raise some money in the form of a stipend, but this would be modest, and Calkins would therefore understand if Mises chose to accept a more attractive position elsewhere.² A few days later, Howard Ellis wrote from Berkeley thanking Mises for sending a copy of Nationalökonomie and wishing him good luck. And that was it for Berkeley.

Machlup wrote from California, where he had met Dean Calkins, and recommended that Mises get in touch with the Rockefeller Foundation regarding a position at UCLA. In many other cases, the Foundation had facilitated the transition of émigré scholars by cosponsoring chairs for them. This, Machlup believed, should be no problem in the present case. Mises thus spoke to his friends at the Foundation, and they gave him the green light by August 15. All hope was now on Machlup to work something out. But to Mises's great disappointment, the attempt failed.

What should they do now? Ludwig and Margit decided to stay in New York for the time being, where many of their European friends and acquaintances had also found refuge under similar conditions. They had already found suitable accommodation in a hotel. The next step was incomparably more difficult: finding new sources of income. Without the job at Berkeley and with much of his assets frozen in Europe, Mises could count the days until his money would run out. He hoped to find academic employment in New York or elsewhere, but there was not much of a job market for economists. A few years later, the G.I. Bill would create a panoply of new positions for professors in colleges and universities, but in 1940 there were only a few fulltime positions available. It is true that the federal government had started hiring economists for New Deal agencies such as the National Resources Planning Board, and after the United States entered World War II in December 1941, federal employment became a boon for economists.³ But Mises had already been found unsuitable for government employment in World War I in his native Austria, at a time when he was far less infamous as an opponent of interventionism. Imagine Mises in the U.S. Office of Price Administration, working under the young John Kenneth Galbraith, or with Milton Friedman in Columbia University's Statistical Research Group, working out the technical details of the withholding tax that Friedman had just invented.⁴ Many European expatriates—among them many former Mises students and associates such as Fritz Machlup, Oskar Morgenstern, and Abraham Wald—were accepted into wartime government service. But Mises had to go private or he would go nowhere.⁵

To get into the private market for economists would take time, however, and time he did not have. It is true he enjoyed an excellent international reputation as a theoretician, but he lacked demonstrated experience in the American economy and he was about to turn fifty-nine.⁶

Nevertheless he had to find a job. He used his old contacts to arrange talks at various organizations in New York. On November 7, for example, he addressed the Banking Seminar of Columbia University's School of Business on the problem of “Post-War Reconstruction of Europe.”⁷ Two weeks later, he gave a presentation on his contributions to economic theory before the New York University department of economics. He lectured at Princeton University on December 19 and at the turn of the year attended a meeting of the American Economic Association in New Orleans.⁸ And on February 11, 1941, he gave a talk to the exclusive Accountants Club of America in the Perroquet Suite of Manhattan's Waldorf-Astoria hotel. The invitation came from John T. Madden, the dean of NYU's school of commerce, who also told him that for the first time ever, the Club had consented to pay an honorarium ($50). The subject of the talk was postwar economic conditions in Europe. The Club did not seem to be under the spell of academic economists, for it advertised for the talk by pointing out that Mises, “although [!] one of the leading economists of the world, is noted for his practical viewpoint and his ability to express himself in terms intelligible to the layman.”⁹ Mises produced the usual result in his audience. One participant recalled that it was “the clearest, soberest and most thought provoking analysis that I have heard” and arranged a follow-up meeting with Mises to continue the discussion.¹⁰

His other presentations produced similar results.¹¹ The vigorous intellectual from Vienna impressed his audiences, but none of these appearances led to anything resembling a contract. The situation was desperate. However, one good side effect of these activities was to make him better known among like-minded intellectuals and businessmen.

Of course Mises also sought direct contact with ideological allies and potential allies. The most important case in point was Henry Hazlitt (1894–1993), who a few years before had written a very favorable book review of Socialism, stating that Mises had “written an economic classic in our time.”¹² Hazlitt later recalled how they met in New York:

Sometime in 1940 I got a telephone call. The voice on the other end said “This is Mises speaking.” As I've told many of my friends since, it was as if someone had called and said, “This is John Stuart Mill speaking.” I had referred to Mises as “a classic,” and you don't expect a classic to call you on the telephone! Anyway, that led to our acquaintance.¹³

It was August 1940. Hazlitt had a weekly column in the Times and a few months later he brought Mises onboard.

Henry Hazlitt

Hazlitt might well have been Mises's first close American friend. Benjamin Anderson had moved to Berkeley, and Seligman had died in 1939. During the first years in the new world, Mises in his social life could rely largely on friends and acquaintances from the old world. Manhattan had become the nexus of European opposition elites trying to survive the war years on the American side of the Atlantic. Politicians, academics, artists, entrepreneurs, and bankers whose lives were not secure under the Nazi regime had chosen New York as their safe harbor.¹⁴ Naturally, most of these people had a bourgeois or upper-class background, and many were Jews. Ludwig and Margit were certainly amazed when they discovered how many friends, colleagues, students, and even relatives had found their way to Manhattan: the Ungers, the Geiringers, the Schüllers, the Kleins, the Kallirs, the Fürths, the Schuetzes, the Hulas, Eric Voegelin, Felix Kaufmann, Emmanuel Winter, Emmanuel Winternitz, Robert Michels, Engel-Janosi, and many others. In fact, Mises could have resumed his old private seminar: all of its members were in New York City! Even his Vienna family doctor was there.¹⁵

Many other people, among them his closest friends from Vienna, had not made it. During the coming months and years, news of their terrible fates made it to New York. Emil Perels and his wife died in a German concentration camp.¹⁶ Ludwig Bettelheim-Gabillon was first separated from his family and forced to reside in a mass residence in Vienna; he was later deported and never seen again.¹⁷ Viktor Graetz had died after the Anschluss, and only his wife Emmy had managed to emigrate to the States.¹⁸ Ewald Pribram and his wife had committed suicide when they could not leave Belgium.¹⁹

There was still no news from Margit's daughter, Gitta, and the Miseses went through months of apprehension about her fate. By April 1941, however, they knew that she was secure in the company of Louis Rougier's stepson and on her way to America. By that time, Margit's mother too resided in New York.²⁰

Mises established contact with Austrian political expatriates. After about a year in exile, he became more formally involved in the work of various Austrian exile organizations, which mushroomed after the United States entered the war in December 1941. From the beginning, Mises was often asked for help—by friends, acquaintances, and often people who only knew him indirectly. In many cases, these were former students or employees who had no records from Europe. He patiently wrote letters of recommendation and certificates of class attendance, and in some cases, this was instrumental in providing them with a job.²¹ He also tirelessly wrote letters of support and made other efforts to help those who had not yet made it to the safe haven of America.²²

The letters that Machlup and a few others wrote for Mises did not bring the desired result. He must have started to envy Hayek, who wrote from London of business as usual, or almost:

Although the German planes have become a nuisance during the last week or so and there is of course a small chance that one may be hit by a stray bomb, one gets very soon used to this and it does not really affect normal life. We are comfortable and I am carrying on with my work as always and if things do not change very much indeed there is no reason why this should not go on.²³

Mises too would have had the nerves to live under occasional bombings, but he could not live indefinitely without income, and his funds were running out. He had some money in the United Kingdom, revenue from the sale of his books, which could keep him going for some more weeks or months. Hayek managed his bank account in England, but wartime foreign exchange controls made it impossible to transfer these sums out of Britain, and it was only a matter of time until it would become impossible to withdraw anything from the account. It was however possible to export commodities, and thus Hayek entered the book merchant business. He withdrew the money from Mises's account and started buying precious books—among them a first edition of the Wealth of Nations and two sets of the complete works of Jeremy Bentham—which he then forwarded to Mises through Haberler in Harvard. This would certainly not have been efficient in normal times, but under the circumstances it was the only way to get any money out of the country.²⁴