The Life of Ludwig von Mises

0:00I'm going to be talking about Ludwig von Mises. He is the person this institute is named after, of course, and he is considered by us in the Austrian economic circles as one of the greatest, if not the greatest, economists who ever lived, and one of the great champions of human liberty. This is a big year for the Mises Institute and for students of Mises because a hundred Hundred years ago this year was when Mises wrote his first great book, his first great treatise on economics, The Theory of Money and Credit. Because of that, because it was his first great book, it's kind of also the centennial, the hundred year anniversary of his career, his time on the world stage.

0:56He wrote this book, Theory of Money and Credit, in the dark days before World War I. Now he, like many people, saw World War I coming. So there's the picture of the Theory of Money and Credit. So it's a hundred years. And this is a picture of Sherlock Holmes. Now I have Sherlock Holmes here, because in Sherlock Holmes 2, one of the plot devices is that World War I is sort of impending, that Sherlock Holmes sees the villain Moriarty as trying to trigger World War I, basically before it even came.

1:44If I could have worked quietly and taken my time, I would have begun with a theory of Direct Exchange in the first volume, and then I could proceed to the theory of indirect exchange. And Professor Nair will be talking about that distinction in the next speech. But I actually began with indirect exchange because I believe that I did not have much time. I knew that we were on the eve of a great war and I wanted to complete my book before the war's outbreak. I thus decided that in a few points only I would go beyond the narrow field of strictly and would postpone my preparation of a more complete work.

2:45And that is very significant to my mind because he could have written a complete work about the science of economics even then. Even then when he was quite young, he was still in his 30s at the time. And he could have written something that maybe was even similar to his later work, Human Action, which was a complete systematic treatment of economics and the case for liberty. I mean, that was amazing. But the problem was that World War I was coming, and it was kind of ironic because, like I said, he is a great champion of liberty, and his later work, Human Action, was such a systematic case for liberty.

3:31And World War I was sort of like the low point in terms of liberty in people in the in the times before were very much part of the ideology of liberalism. The time before World War I was considered the age of liberalism. Now the word liberalism means something different than what you'll hear in American circles these days. It's actually kind of the opposite of what you'll hear when people talk of liberalism. At the time, liberalism meant belief in private property and in limited government. Now, when people talk about liberalism, they actually mean expansive government, like really large government and a lot of violations of private property.

4:25At World War I, that was sort of the end of the age of liberalism. That was the time when people really started abandoning belief in private property and belief in a limited government and started embracing big government and embracing rampant violations of private property. And so it was kind of ironic that this man, Mises, who was sort of the greatest champion, who was sort of the high point of liberalism that he came on the scene at this point when the rest of the world was completely abandoning liberalism. So he had to basically write his first great economics work in a huge hurry.

5:14Mises was in a huge hurry. He just had to get it written and defend it and he barely had enough time to have it sort of presented to the scholarly world before he himself was actually shipped off to war. Even though other scholars at the time were given safe roles during the war in Austria in planning offices, Mises, even though he was a very accomplished scholar, he was actually shipped off to the front lines. He had to be an artillery officer on the eastern front of the war. And that might have had to do with the fact that he was a champion of liberalism, that he was a champion of liberty at a time when people no longer believed in liberalism.

6:08And another thing that is just so ironic about this is that he could have died there on the front lines. And this was a time before he had accomplished his greatest theoretical advances. Later on, in the 1920s, after the war, he would write a very important essay called Economic Calculation in the Socialist Commonwealth. And in this book, he proved scientifically that socialism can never work, that socialism is inherently prone to failure. And so socialism Socialism was all the rage at the time of the war, and it would have been such an ironic thing if this person, even before he had a chance to sort of scientifically stab socialism in the heart, for him to have been snuffed out by this war that was just sort of the apotheosis, an example of the state and of socialism being glorified to the greatest extreme.

7:23So put yourself and Mises's shoes there on the front line. You better than anyone else in history understand the workings of the society characterized by human liberty, characterized by peace and by the market. You understand the fatal flaws of socialism, of interventionism and the futility of war. You have the answers. You know the societal code that would unlock and unleash humanity's potential, but nobody will listen to you, and you are surrounded by destruction and madness. Furthermore, you yourself may at any moment be devoured, eaten up by this war that rages It would be enough to break most any man. But fortunately for us, Mises was not only a genius, but he was also one of the bravest men who ever lived.

8:13In this harrowing crisis, as in all his subsequent trials, Mises bolstered his courage with a bit of poetry. So one of the bravest men who ever lived. In this harrowing crisis, as in all his subsequent trials, Mises bolstered his courage with a bit of poetry, a bit of Latin poetry that he had learned as a schoolboy. So this is a picture of Mises when he was an artillery officer. That's him as a young man during World War I. So, Mises wrote, how one carries on in the face of unavoidable catastrophe is a matter of temperament. In high school, as was custom, I had chosen a verse by Virgil, who's a Latin epic poet, to be my motto, tu ne sere malis sed contra orientior ito, and that translates to, do not not given to evil, but proceed ever more boldly against it.

9:19I recalled these words during the darkest hours of the war. Again and again I had met with situations from which rational deliberation found no means of escape, but then the unexpected intervened, and with it came salvation. I would not lose courage even now. I wanted to do everything an economist could do. I would not tire in saying what I knew to be true." And he was forever faithful to that resolution. Throughout his career, he was ever the picture of principled intransigence. He was sort of an intellectual Leonidas. So this is a picture from the movie 300, and 300 tells a story of the 300 Spartans who stood against the massive Persian army.

10:12They were greatly outnumbered, but they didn't give in, and Leonidas was kind of the leader. And even though he knew to some degree that it was just a lost cause, he never gave in. He still stood his ground. And that's kind of the situation that Mises was in at the time. Because like I said, liberalism was completely abandoned. Everyone was against liberalism, from the left to the right. There were the socialists on the left, there were the fascists and the Nazis on the right, and the only thing that they agreed on was that they wanted to abandon liberalism. And so, Mises was considered the last knight of liberalism, he's sort of the ultimate knight of liberalism, the last great defender of it, and it's just really amazing how he was able to stand his ground when everyone around him was abandoning liberalism.

11:08There were the Keynesians, even people who had embraced free market economics when they were younger. Eventually, when John Maynard Keynes came on the scene, who was an economist, a lot of economists who were formerly free market, they abandoned the free market to embrace this what's called the Keynesian Revolution. And what was amazing about Mises is that it wasn't enough for him to just scientifically make the case for liberty. He actually was sort of an activist on the ground level, in the trenches. So it wasn't enough for him to prove that inflation, the creation of money out of thin was destructive, but he actually fought the inflationism that was present in the Austria of his time.

12:10He had some influence in Austria in between the wars, in between World War I and World War II. And there was a big push to create lots of money out of thin air. And he used his influence to prevent that. And by doing that, he prevented the hyperinflation, which was the economic phenomenon that occurred in Germany in between the two wars. And that was so destructive to German society that a lot of people think that it eventually led to the Nazis coming to power. Power. And so that was a huge heroic deed that Mises did. It was also not enough for him to prove that socialism didn't work in theory, but he also used his influence to convince the man who was the most powerful man in Austria at the time not to embrace and Socialism. His friend had the chance to implement socialism in Vienna, the capital of Austria at the time, and Mises met with him late into the night telling him this was going to cause chaos and destruction, and he convinced him.

13:32and so he saved Austria from the socialism that would later lead to the famine that would befall Russia when they embraced socialism just a few years later. So Mises was really a hero not only in the scientific realm and in intellectual circles, In his own time, he was actively working to save the lives and livelihoods of his fellow humans in Europe. But eventually, things got even worse. In this book, Mises, The Last Night of Liberalism, which is a huge biography of Mises, Georg Ludwig Guido Holzmann tells the story about how Mises was even influencing people in Germany.

14:31He was bringing the next generation of economists and social theorists to accept liberalism. But then as Holzmann tells it, just as Mises was finally beginning to stir the spirit of liberty among the young generation of German economists, the old socialists of the chair had a final and devastating triumph. On January 30th, 1933, their intellectual scion, their inheritor, Adolf Hitler, was appointed Chancellor of the German Reich. As the Nazi threat grew, Mises, as a Jewish liberal, was impelled to leave his native Austria. Later, the German police would break into Mises' Vienna apartment and Confiscate His Papers.

15:23The Nazis knew that an office full of the written ideas of Mises was more potentially dangerous to their kind than any allied weapons cache. Even though the Nazis were dead set against the socialists, they knew that really the most dangerous enemies that the Nazis had were the liberals because the liberal ideas were just the most powerful defense against the Nazi collectivist ideologies. So, Mises had to flee. He went to Switzerland. And there in Switzerland, Mises finally found the piece necessary to – oh, and this is actually a comic.

16:15There was a comic, a Batman comic, where Batman is pictured as, he's the Berlin Batman, and he actually goes to save Mises' papers from the Nazis. It's kind of neat. So, in Switzerland, he was able to marry his wife, Margit, and he was able to write the German version of what later became Human Action, Action, which is finally he was able to write that great treatise, that great work of economics and that great systematic defense of liberalism that he had in mind way back before World War I. But the book just kind of fell still born.

17:05Nobody was interested in liberalism at the time, so it was just kind of lost in the darkness of the Times. And once again, not only were Mises' ideas endangered, but his own person, his own self was endangered as well. Mises came within a hair's breadth of being kidnapped by German agents. The Swiss Alps were no longer enough to keep Mises safe from Hitler's forces. To escape the continent, Mises and his new wife first had to travel by bus all the way from Switzerland to Portugal, barely keeping one step ahead of the Nazis the whole way. They finally found safe harbor in New York City.

17:55But financial security did not come with physical safety. Mises and his wife found themselves faced with poverty like they had never known before. Most of Mises' savings had been confiscated by the Nazis. And as accomplished as he was, Mises couldn't find any professor positions because most of the universities in America had become as anti-liberal as in Europe. He could have sold out. By selling out, as did so many of his colleagues, he might have easily gotten a job. But he was not going to back down. As always, he found ways to get by without giving in. Like his Latin motto, tu ne sere, never give in.

18:42In America, there were still some freedom lovers. And they found Mises' ideas to be a revelation. From their ranks, several stepped forward to provide Mises with a financial and professional and all the support he needed to stay productive in his later years. With this support, Mises was finally able to once again express, this time in English, his systematic case for liberty in the actual English version, Human Action. For a young economist named Murray Rothbard, that's Murray Rothbard here, reading Human Action was a life-changing event. was instantly converted into a hardcore Misesian. Rothbard immediately started building on Mises's work to create the foundations of the Austro, which means the Austrian economics informed libertarian movement of today.

19:41Mises fought for liberty until the very end, writing books into his 80s and giving speeches into his 90s. At one of his last speeches in the year before he died, a young physician named Ron Paul was in attendance. Dr. Paul had driven 50 miles to see Mises, and he would later recollect that the event was an inspiration. At the end of his life, Mises had only one regret, that his powers were failing when he still had, quote, so much to give to the people, to the world. Mises died as he had lived, brimming with goodwill towards his fellow human beings and animated by an unrelenting drive to improve their lot in the world. The impacts of Mises's life and work have been resounding now for a hundred years, yet in the midst of the societal crises we now face, his writings and his example are as timely now as they ever were.

20:39His writings show us how we may one day remedy our greatest afflictions, and his example can inspire in us the courage needed for the trials we must inevitably face in the meantime.