2. School Years

0:00CHAPTER II School Years The Mises family moved to Vienna sometime between 1883, when Ludwig's brother Richard was born, and 1891. The move probably occurred before the fall of 1887, when six-year-old Ludwig began the mandatory four years of elementary schooling. The family settled in a suburban apartment in close proximity to what was then the city of Vienna, and today is its first Vienna For many centuries Vienna had been the administrative centre of the Habsburg Empire. After the revolution of 1848 to 1849 and Franz Josef's abortive attempt to reintroduce royal absolutism, the The Austrian liberals had risen to power at the end of the 1850s. Their reign lasted about 30 years, enough time to reshape the city to reflect their ideals. They demolished ramparts that separated the old city of Vienna from the surrounding suburbs, replacing them with the Ringstrasse, a magnificent U-shaped boulevard that now enclosed the old centre from three sides. The fourth border was an arm of the Danube River. The Ringstrasse became an architectural

1:25and Aesthetic Triumph, which, by virtue of its geographical concentration, surpassed in visual impact any urban reconstruction of the 19th century, even that of Paris. The nobility too had its palaces on the new boulevard, but the dominant edifices embodied the liberal bourgeoisie's political and cultural values. On the very spot were the large city ramparts had once symbolised the military presence of monarchial rule, now Now an opera and a Hofburg theatre celebrated the performing arts. Splendid museums for natural history and art displayed human achievements and discoveries. Parliament buildings hosted the new political forces present in the Reichsrat, new buildings for the University and the Stock Exchange represented the forces of economic progress.

2:16And a magnificent neo-Gothic city hall symbolised the rebirth of municipal autonomy after ages of Imperial Supremacy. Young Mises could reach all of these places within a 20-minute walk. Unlike most other major European capitals, the city of Vienna was surprisingly small. Until the 1890s, Vienna counted barely more than 60,000 inhabitants. Felix Umari recalls everything outside the center was known as Vorstadt, the suburbs, which almost meant the same as provinces. After 1900, a municipal reform merged Vienna with its proximate suburbs. The old Vienna thereafter became the first district of the new city. Vienna hosted all central political institutions and administrations, the most important cultural centres and the headquarters of the largest corporations of the entire empire, but one could walk across the entire concentration in a half-hour stroll. By comparison, it takes more than two hours of walking to cross Paris within the boulevard périphérique, and it takes roughly the same time to walk through the city of London. It was easy to encounter the Empire's most famous

3:30and powerful people on the streets of Vienna. It was almost impossible not to see someone in some eminent position. Among the most popular individuals were opera singers, stage actors and Members of the Royal Family. When a famous singer walked by, or one of the more than sixty archdukes or archduchesses drove by in their carriage, people would greet them with spontaneous applause, and when the star from the opera or Hofburg theatre died, flags flew at half mast. Johnson observes that even simple members of the opera or philharmonic orchestras were greeted in public, and that many of them performed chamber music in the Salons of the Wealthy. Yet the best example, and almost unbelievable for us today, was Franz Josef himself, who frequently departed in just his carriage, from the Hofburg Theater in the city to Schönbrunn Palace on the outskirts of Vienna. Anyone could walk within reach of the carriage and lift his hat to the white-haired emperor. It was similarly impossible not to meet one's friends, relatives and colleagues on the way to or

4:36The Viennese cultural elites did not live in secluded social circles. They perceived themselves as taking part in an all-encompassing social life that brought together ministers Workers and students, opera singers and scientists, stockbrokers and historians of art, philosophers and painters, psychologists and novelists, office clerks and architects and so on, in countless variations. Having so many people in so small a city contributed to making Vienna from the 1870s to the 1930s a cultural hothouse that would shape much of what was most valuable in 20th century civilization. In those years Vienna became the birthplace of phenomenology, medicine, psychoanalysis, Zionism and Jugendstil en Nouveau. It was one of the cradles of modern analytical philosophy and, most importantly, it was the birthplace and home of Austrian economics, that school of thought that Ludwig von Mises was to lead and Transform.

5:58In the words of cultural historian Karl Schorske, in London, Paris or Berlin, the intellectuals in the various branches of high culture, whether academic or aesthetic, journalistic or literary, political or intellectual, scarcely knew each other. They lived in relatively segregated professional communities. In Vienna, by contrast, until about 1900 the cohesiveness of the The whole elite was strong. The Salon and the Café retained their vitality as institutions where intellectuals of different kinds shared ideas and values with each other and still mingled with a business and professional elite proud of its general education and artistic culture. The Cafés had a decisive impact on the education of Vienna's young intellectuals. The Café was of course a place to have coffee or a small meal, but it was also where professional people met to talk business, and everyone else met to discuss current interests.

6:58For students, the café was also an institution of learning. The better café subscribed to the major international journals of science, art and literature. Designed for the entertainment of customers, these subscriptions made the café's function as a kind of private library. As a teenager, Mises must have spent many afternoon hours here, reading the latest articles in all fields of knowledge and achievement and discussing them with his peers. It was probably here that he first encountered the writings of the German Historical School under Gustav Schmoller and found them less than fully convincing. He later recalled, I was still in high school when I noticed a contradiction in the position of the Schmoller School. On the one hand, they rejected the positivistic demand for a science of law that was to be built from the historical experiences of society. On the other hand, they believed that economic theory was to be abstracted from economic experiences. It was astonishing to me that this contradiction was barely noticed and rarely mentioned.

8:03He was equally bewildered by the way the historical school presented its case against laissez-faire, liberalism, Schmoller and his friends seemed to argue that the modern liberal era contrasted unfavourably with older collectivist times. But this made no sense. At that time I did not yet understand the significance of liberalism, but to me the fact alone that liberalism was an achievement of the eighteenth century, and that it was not known in former times, was no cogent argument against it. It was not quite clear to me how an argument could should be derived from the fact that in the distant past there had been community property in land, nor could I understand why monogamy and family should be abolished because there had been promiscuity in the past. To me, such arguments were nothing but nonsense.

8:55The sheer cultural density of the city almost forced the Viennese to take an interest in science, beauty and art. Thinking and talking about such things were not reserved for the for the elite or particular occasions. They were a part of Vienna's daily common life. Virtually everybody from the emperor to the housewife knew something about the latest achievements of science and held some opinion about this actor or that novel. In fact, any kind of culinary, artistic, scientific or technological achievement met with well-informed appreciation and critique. This permanent criticism, the famous Viennese Gruntern, sharpened everyone's minds and attain standards virtually without equal. While the Viennese were interested in all fields of endeavour and refinement, what they were truly enthusiastic about was music. From about 1770 to 1810 they had witnessed the most extraordinary explosion of musical creation the world has ever experienced, when the geniuses of Haydn, Mozart, Beethoven and and Schubert burst onto Vienna's stages in rapid succession.

10:05Johnston writes in Vienna Vienna, The concentration of the supreme genius of Haydn, Mozart, Beethoven and Schubert in one city over two generations has no parallel in the entire history of culture. The closest parallel would be the Rome of Raphael and Michelangelo, or the Athens of Sophocles and Euripides. Yet in no other art do the greatest geniuses so outstrip lesser The City on the Danube became the world capital of music and remained so into the 20th century. Passion for music united all ethnic, social and political strata of the population. Differences that made them opponents in politics could not separate them when it came to enjoying old and new masters in music. And in distinct contrast to politics, where irreconcilable In the words of William Johnston, slovenliness, schlumperei, might be tolerated in politics, but not in musical or theatrical performance.

11:25Mises did not share the Viennese acceptance of schlumperei when it came to politics, but he did share their passion for music. It would endure throughout his life. His stepdaughter Gita Sireni recalled her 90-year-old stepfather sitting next to her at a performance of Strauss's Blue Danube in New York City. The old man's eyes were shining as he hummed along with the music. Viennese Jews Ludwig's parents could rely on a closely-knit network of relatives that greatly helped their integration in Vienna. In particular, Arthur and Adele could build on blood ties with the local members of the Mises and Landau clans, as well as with the Nierensteins and Kaliers.

12:12Ludwig and Richard would have lifelong friendships with the young Nierensteins and Kaliers. On weekends Ludwig often saw his maternal grandfather Fischerlandau, whom he admired very much. His paternal grandfather had died before he entered the gymnasium. Summer vacations were spent in the countryside with the Nierensteins and other cousins. Social contacts outside the network of Jewish families must have been rare. The old Viennese establishment remained closed to newcomers, and even the noble pedigree of the Mises family was too recent to be taken and seriously by them. Ludwig would see the day when titles no longer counted, officially at least. After the destruction of the monarchy in November 1918, the new republican government abolished all titles and banned their use in print. Ludwig Heinrich Edler von Mises became Ludwig Mises, according to Austrian law. Outside the country, however, he would and continue to use the title that his great-grandfather had earned for his family.

13:20The liberal era in Austria had reached its peak in the 1870s. While the following decades would see its decline, it remained strong enough to accommodate the Galician and Moravian Jewish migration to Vienna. All great metropolitan cities of the world derive their dynamics through the influx of new blood from rural provinces. Ambitious young people bring with them innovations in art, science and business. William Johnston observes that the majority of great Viennese pioneers had been born outside of Vienna. In the case of Austria-Hungary, the eagerness of the provincial newcomer was compounded by the motivation of the Jewish upstart, who for the first time ever had the opportunity to integrate himself into a cosmopolitan Society. Art and science offered opportunities for social mobility that Jews enjoyed in no other area. Business, the press, literature and theatre, music and opera, and the sciences became the great vehicles for the integration of secular Jews.

14:25Heinrich Gretz reports that the first cautious steps to a Jewish integration into Viennese social life were undertaken when Fanny Itzik, a Jewish woman from Berlin, that is from the The Mendelssohn Circle moved to Vienna in the 1780s and opened a brilliant salon. By the 1890s, the Jewish impact on Viennese culture could not be overlooked. William Johnston remarks that at the turn of the century, when the Jewish population represented less than nine per cent of Vienna, it was responsible for almost half of the overall artistic and and Scientific Achievement. This overwhelming success was due in part to the absence of a ghetto mentality among the new immigrants. The Jews from Arabia, Bohemia and Galicia had been living for centuries under an oppressive, rabbinical order, but they had not yet experienced any similar constraints in their dealings with Gentiles.

15:22In contrast to German cities like Frankfurt and Berlin, which had long had a Jewish settlement, Vienna first attracted Jews in large numbers after 1848. They came from small villages in Bohemia, Moravia and Galicia, where Jewish culture had been preserved in relative isolation for hundreds of years. These were Jews who had lived in the countryside. In Bohemia some of them had been farmers and few had been touched by city life. They had been small merchants, often trading between towns or providing financial services to gentile landowners. Gentisemitism had been rare in these regions because the Jews provided services that the gentile lords and peasants wanted but would not perform themselves. The economic complementarity of the countryside had guaranteed the Jews security and modest prosperity. The Jewish families who moved to Vienna from the eastern provinces formed the nucleus of a new progressive and Liberal Society. Vienna offered them the best schools in the world and equally unique cultural facilities, and the cosmopolitan atmosphere of the country's largest city

16:33offered progressive Jews the prospect of escaping the narrow confines of a life directed by the traditional precepts of their religion. The leading organ of this liberal Jewish immigrant community was the Neue Freie Presse, which relied on the financial backing of the credit Anstaltbank, the Austrian flagship of the House of Rothschild. The paper took an increasingly pro-German and anti-Slav stand. Under its mentor and editor Moritz Benedikt, 1849-1920, it fanned anti-Slav feelings among Austro-Germans, it lauded the post-1880 alliance with Germany, and in 1914 positively welcomed war as an ally of Wilhelm II. The Neue Freie Presse Professor resembled the liberal bourgeoisie who read it. Exquisite taste in culture, accompanied by naïveté in politics.

17:31Although the Miseses were more conservative than most other Jewish families in Vienna, Artur was a board member of the Vienna Jewish cultural community, and Adele was very religious. Ludwig grew up in an atmosphere that tended to equate progress and secularisation, where Where prophets and saints were increasingly replaced by the inventors of engines and the heroes of philosophy, art and science. What Schoska says about Theodor Herzl, the founder of the Zionist movement, also applies to Ludwig von Mises. When Theodor was born in 1860, his family was well out of the ghetto — economically established, religiously enlightened, politically liberal and culturally Germany. Their Judaism amounted to little more than what Theodor Gompatz, the assimilated Jewish classicist, liked to call un plus souvenir de famille. Shorska's parents even liked to call his bar mitzvah his confirmation. For young Mises, the transformation of Vienna through the exploits of science and technology was a continual process of never-ending improvements.

18:37When he arrived in the city as a young boy, the liberal governments had already put their stamp on the streets and architecture. Everything was new. Everything breathed the spirit of the time. As a young man, Ludwig saw gas lamps replaced by electric lighting, horse and carriage by motorised vehicles, the daily excursion to the public water fountain by new plumbing systems. He saw telephone lines installed throughout the city, and eventually saw airplanes taking off and landing in Vienna. The famous writer Stefan Zweig, one of Mises's contemporaries, claimed that the same progress seemed to manifest itself in social and political matters, for example, in the extension of suffrage and in pro-labour legislation. The new urban middle class came to believe that all social and political problems would disappear in due New Course, Conflicts between ethnic and religious groups would vanish, and mankind would eventually reach the state of universal brotherhood.

19:40Zweig was born in the same year as Mises, 1881, and also was a Jewish intellectual whose family had settled in Vienna only recently. Zweig's testimony is therefore representative of experiences and sentiments of the milieu in which Mises spent his childhood. It was no accident that the overwhelming majority of the Jewish immigrants to Vienna were liberals. Happy to have escaped the religious and moral constraints of their rural hometowns, they tended to oppose the limitations of their new environment as well. This concerned not only the political order, which officially privileged Catholics of German ethnicity, but also the social role of the Catholic Church, whose prominence painfully reminded them of and the rabbinical order at home. Two issues united Jewish and gentile liberals – opposition to the Church and the fight against censorship. The latter had survived from the times of Funds I, who after the Napoleonic Wars had turned Austria and Vienna in particular into a police state that sought to monitor all the intellectual activities of its citizens.

20:49These spies infiltrated the cafes and theatres, and concertos acted as informers. Foreign books had to be approved before they could be released on the Austrian market, and many foreign authors were prohibited. Newspapers were monitored as a matter of course, and even theatrical productions needed the authorities' prior approval. Newspaper censorship continued in force until after 1900. When the Mises family moved to Vienna in the 1880s, the stringency of the censorship laws had already faded under the impact of the liberal 1848 revolution, but the effects of the old laws on the Viennese mentality remained. Traditional city dwellers were reluctant to pursue what were possibly unbecoming innovations in business, science and art. They were educated men and women of good taste and manners, but they lacked the initiative and drive necessary to realise projects against the resistance of a conformist Why had France's police state tamed the Viennese more than the provincials? Johnston gives this explanation. Vienna suffered far more harshly from censorship and police surveillance than any other region of the Habsburg Empire. In the days before the electric telegraph

22:14and the Railroad, it was nearly impossible to harass a hinterland as effectively as a capital city. At no other time since Maria Theresa's centralised Austrian administration did the provinces compete so successfully with the capital in cultural prominence as during the Biedermeyer period. These men cared far less about social disapproval than the old Viennese. Their rugged individualism transformed Vienna and Western culture in the course of Academician's Gymnasium In September 1892, shortly before his eleventh birthday, Mises entered the Academician's Gymnasium, where he would be schooled for the next eight years. The gymnasium schools were very particular institutions, more demanding and quite dissimilar from their present-day successes. A product of the nineteenth-century Continental System of Education, they can best be described as a combination of high school and college. The children of ambitious and well-to-do parents began attending around the age of ten after four years of elementary training. Three gymnasium models were available, a classical model featuring eight years of Latin and six of Greek, a semi-classical with

23:32Latin and one or two modern languages, and a thoroughly modern option with only modern Ideas, Eric von Künfeld-Ledin states that the classical model had more prestige than the others, but they were all demanding. He writes, Often these very hard school years hung like a black cloud over families. Failure in just one subject required repetition of a whole year. This was the fate of Nietzsche, of Albert Einstein, and also of Friedrich August von Hayek. Young Mises, of course, got a classical education, the modern languages he learned privately. While at the Akademischen Gymnasium, Mises read Caesar, Livy, Ovid, Sallust, Jugurta, Cicero, Virgil and Tacitus in Latin. In Greek he studied Xenophon, Homer, Herodotus, Demosthenes, Plato and Sophocles. One verse from Virgil so deeply impressed him that it became his maxim for a lifetime, tu ne sede malis, set contra audensiorito, do not give in to evil, but proceed ever more boldly against it.

24:46Many years later he pointed out the crucial role that the immersion in classical literature and the writings of the ancient Greeks in particular played for the emergence of liberal Social Philosophy, and thus in his own intellectual development. Mises It was the political literature of the ancient Greeks that begot the idea of the Monarchal Acts, the philosophy of the Whigs, the doctrines of Althusius, Grotius and John Locke, and the ideology of the fathers of modern constitutions and bills of rights. It was the classical studies, the essential feature of a liberal School Education that kept awake the spirit of freedom in the England of the Stuarts, in the France of the Bourbons, and in Italy, subject to the despotism of a galaxy of princes.

25:35No less a man than Bismarck, among the nineteenth-century statesmen next to Metternich, the foremost foe of liberty, bears witness to the fact that, even in the Prussia of Frederick William III, the gymnasium, the education based on Greek and Roman literature, was a stronghold of Republicanism. Mises argued, The liberty which the Greek statesmen, philosophers and historians glorified as the most precious good of man, was a privilege reserved to a minority. In denying it to medics and slaves, they virtually advocated the despotic rule of a hereditary caste of oligarchs. Yet it would be a grave error to dismiss their hymns to Liberty as Mandacious. They were no less sincere in their praise and quest of freedom than were, two thousand years later, the slaveholders among the signers of the American Declaration of Independence. And he went on, The passionate endeavours to eliminate the classical studies from the curriculum of the liberal education, and thus, virtually to destroy its very character, were one of the major manifestations of the revival of the servile ideology.

26:47For a diametrically opposed assessment of the relationship between classical literature and liberty, see Frederic Bastiat in his work Baccalaurea et Socialisme. Bastiat argues in particular that the classics have bequeathed to us the notion that society is a purely conventional construct, as well as the idea that legislation could fabricate society according According to Just Any Design The Austrian schools had been reformed in 1851 at the beginning of the absolutist phase of Franz Josef Rhein. Under the leadership of Count Leo Thun von Hornstein, the government seized control of secondary education, which had been the exclusive domain of the Catholic Church, and imposed a new curriculum that was meant to prepare the graduates for scientific studies and executive positions within the Austrian bureaucracy. The teaching of religion had become compulsory in 1869. Children had to have four years of elementary school, which prepared them to be good subjects of the state before they could enter a secondary school. The gymnasium taught the humanities to the future elite of the country. Only about

28:155% of an age group was admitted. This number tells more about the nature of the gymnasium than any description of its curricula. To be admitted to a gymnasium was to be part of a tiny intellectual elite. It meant learning from teachers who were respectfully called about Herr Professor, and who were in fact the peers of today's college and university professors rather than of today's high school teachers. Positions at the universities were extremely rare, and it meant being measured by standards that were incomparably higher than those of modern high schools. Being among the best students did not guarantee a place in the gymnasium. Tuition was high and outside assistance was rare. Only one of Mises' classmates Mises had such assistants, but because the schools competed for the best pupils, they often waived the fees for exceptional young men who could not afford them, about 20% of the pupils in Mises's class. The typical gymnasium pupil was the intelligent son of middle-class or wealthy parents. Pupils with a working-class background were in exception.

29:22While the gymnasium was the best type of school, the various gymnasium were not equal in quality or Reputation. The best schools were in Vienna, both in terms of the family background of the pupils and of the quality of the professors. The latter were often published scholars who actively engaged in research and made important contributions in their fields. For example, Ludwig's Latin teacher, Dr. Valentin Hintner, was a member of the Royal Prussian Academy of the Socially Beneficial Sciences in Erfurt. In Vienna, three schools stood above the rest, The Theresianum, the Schottengymnasium and the Akademische Gymnasium. These were all male schools. Viennagos were taught in separate gymnasium, yet they could take the graduation exam in one of the top schools.

30:10Empress Maria Theresa had created the Theresianum in the mid-1700s as a Knights Academy, a school to prepare young aristocrats for future responsibilities as administrative and political leaders of and the Empire. In Mises' day, it remained a school for the sons of the high aristocracy and admitted bourgeois pupils only as day students. Among the latter were Karl Lüger, who eventually became the first non-liberal mayor of Vienna, Rudolf Hilferding and Josef Schumpeter. There were, however, many families who abhorred the snobbish atmosphere of the Theresianum and preferred other schools, such as the Benediktine-Schotten-Gymnasium and The Akademische Gymnasium The Akademische Gymnasium was the most thoroughly secularised secondary school in Vienna. It was therefore the favourite place of education for the sons of the liberal bourgeoisie and in particular of Vienna's better Jewish families.

31:08In Ludwig's terminal class, nineteen out of thirty-five pupils were Jewish, thirteen Catholic and two Protestant. The school had been established in 1453. Today it is located on Beethovenplatz, near the Eastern Ringstrasse. The tall neo-Gothic building was constructed in the 1860s, with romantic towers and high windows on ivied brick walls. This is where Ludwig spent the next eight years. His weekly schedule in the first year, religion, two hours, Latin, eight hours, German, four hours, geography, three hours, mathematics, three 3 hours, natural history 2 hours, calligraphy 1 hour. By and large, the same subjects were taught throughout the entire 8-year programme. The only major exception was Greek, which was taught starting in the third year. Mises was one of the best students, although not at the very top. The only class where he truly excelled was history, and he eventually graduated sixth out of 33 pupils. The pupils were, however, somewhat disenchanted with their school, because because of the dour indifference of their teachers. Before the 1851 liberal education

32:21reform under Thun Hohenstein, the Austrian schools had been run by Catholic clerics. Accordingly, classroom instruction featured mainly church history and filosofia perennis. After the reform, civil servants replaced the clerics. These new secular professors were entirely steeped in the traditions and mentality of the Austrian bureaucracy and performed in the classroom with the same detached attitude of other state bureaucrats. Their main interest was not to educate students, but to present their material efficiently. Apart from the insufficient motivation of the teachers, there was another reason for student dissatisfaction, a reason that also explains the explosion of creative energies in Vienna that began in the liberal era. The schools did not offer enough intellectual stimulation for the Jewish Boys who came from families nurturing a long tradition of literacy and of careful and sustained intellectual work. Then, as now, young students endured school as a routine. It was not where they found their interests or passions, but while students today might look forward to sports or movies after school, their Viennese counterparts at the end of the 19th century

33:35looked forward to reading and writing what was not taught in school, in other words, to their real educations. In school, a fourteen-year-old would read the Latin and Greek classics. He stuffed his brain with the minutiae of German and European history, and he did so without enthusiasm. But after school he would devour modern writings on science and the arts. Why did these Viennese boys have such a different notion of having a good time from virtually all other generations and virtually all other places? The answer is, in brief, Traditionalist Jewish culture let loose in a secular environment. William Johnston observed, Jews had enjoyed many centuries of literacy before the rest of Europe started to become literate in the eighteenth century. Thereafter, Jews entered as if by predestination into professions that required facility with words. The true passion of these young men who came from families that just a generation before had left the The rural rabbinical order was intellectual adventure in the secular realm, a pursuit unavailable to their ancestors. They threw themselves into literature, theatre, opera,

34:48whatever aroused their curiosity. Raised to value religious scholarship, they found in Vienna the intellectual delights of the secular world. Ludwig von Mises seems to have been a typical specimen of this generation. He recalled that But his interest in history was peaked in 1888, when he read articles in a family journal on the lives of the German kaisers Wilhelm I and Friedrich III, who had died that year. He was then barely seven years old. According to his wife, he set out to write a history of the Crimean War when he was ten. After writing his first page, however, he abandoned the project when he discovered that an English historian had published ten volumes on the topic. During his gymnasium years he devoured the writings of the German historians, justifying the new Prussian supremacy in German lands. These readings provided a lifelong lesson.

35:43He realised that the acclaimed authors were in fact writing with a distinct bias. In his Erinnerungen he states, As an Austrian it was not difficult for me to realise the overtones of these writers, and I soon discerned the method of their analysis, which had rudely The Forcification of History Thus, early on, he trained the critical mind that would serve him so well throughout his life and eventually turn him into the twentieth century's greatest intellectual champion of liberty. One of the few surviving photographs from his youth seems to forebode these events. Lew Rockwell comments, I often think back to a photograph of Mises when he was a young boy of perhaps twelve Standing with his father. He was wearing the traditional Austrian garb popular in the 1890s and holding a racket for sports. The picture was grainy and distant, and yet you sensed that there was something in Mises' eyes, a certain determination and intellectual fire, even at such a young age. His eyes seemed knowing, as if he were already preparing himself

36:49for what he might face. We look and try to discern what it was about him that caused caused him to be such a fighter that caused him to stand while others fell, that gave him that sense of moral certitude to fight for enduring truths, regardless of the political winds. Even in that grainy photograph we have some sense that we see it in his eyes, that glimmer that reflects a heart that would never compromise with despotism, but rather advance the truth of human freedom until his last breath. These things appear clearer today than they were at the time. Ludwig's passionate interest in the sciences was typical for boys of his background and generation. So was his enthusiasm for the arts. We must imagine him as a teenager standing in line before premieres at the Hofburgtheater or Volkstheater. After school he would meet friends such as Hans Kelsen at a café to read journals and discuss their discoveries.

37:50The lives of Mises and Kelsen bear many surprising parallels that make this friendship particularly interesting. They were born in the same year and attended the same school. Later they would enter the same department at the University of Vienna, prepare for a scholarly career and publish their first major treatises shortly before World War I. Both became ardent defenders of the notion that there is no such thing as a science of ethics, but that all judgments of Value are merely subjective. While Mises would become famous for his studies of a priori laws in economics, Kelsen became a pioneer of the pure theory of law. Also, both would marry women named Grete, move to the United States at the advent of World War II, and eventually die in the same year, far from Vienna. Mises in New York and Kelsen in California.

38:45Kelsen's family background was lower than average academician gymnasium standards, while Mises's was higher. Mises was the only aristocrat in his class. This did not prevent the ambitious nobleman from befriending the ambitious son of a clerk and remaining his friend for a lifetime. It is likely that they became acquainted with the philosophy of Immanuel Kant, and especially with Kant's epistemology at the same time when they were about sixteen years old. German idealistic philosophy, the philosophy of Kant, Fichte, Hegel and their followers exercised an enormous influence on many young minds in Vienna, not least of all because these books had been on the Catholic index of forbidden works.

39:32Kelsen was profoundly shaken by his confrontation with idealist philosophy. Through his reading In his reading of Kant, Kelsen had come to the conclusion that the reality of the exterior world was problematic. During the rest of his life he seems to have applied his early subjectivist interpretation of Kant to the field of law. As an old man, Kelsen still recalled his reading of Kant as a crucial juncture in his intellectual development. The philosopher from Königsberg did not have the same impact on Mises. In distinct contrast To Kelsen, Mises did not have a Kantian epiphany and then set out to reconstruct economic science in the light of this idealist philosophy. Rather, Mises started from case studies and moved up to ever-wider generalisations and greater abstractions.

40:23Eventually he would realise that he could not avoid dealing with epistemological questions and then stress the a priori nature of economic laws, but even at this point Kantian epistemology did not have a noticeable impact on his thought. Many years later he had nothing favourable to say about the neo-Cantean movement, in particular Cohn and Natob, which blossomed at the turn of this century. He said it was an era of decline and neo-Canteanism was its philosophical reflection. Mises's true primary interest was in political history and political action. All the other disciplines he eventually came to master – law, economics, epistemology, philosophy were subservient to these primary goals. In his final exam in German at the Akademischen Gymnasium, he had to write an essay on the following question. What are the moral inspirations that we derive from the study of the history of Austria? The written part of the exam also included mathematics and geometry, requiring among other things that he deliver a mathematical proof of a geometric theorem, as well as translations.

41:31Mises had to translate from Latin into German, from German into Latin and from Greek into German. Though his answer to, what are the moral inspirations that we derive from the study of the history of Austria, is lost, a statement that he made many years later gives us a hint as to what he might have written in May 1900. Speaking of the benefits of studying history, Mises wrote, It opens the mind toward an understanding Building of Human Nature and Destiny. It increases wisdom. It is the very essence of that much misinterpreted concept, a liberal education. It is the foremost approach to humanism, the law of the specifically human concerns that distinguish man from other living beings.

42:17Personal culture is more than mere familiarity with the present state of science, technology and civic affairs. It is more than acquaintance with books and paintings and the experience of travel and of visits to museums. It is the assimilation of the ideas that roused mankind from the inert routine of a merely animal existence to a life of reasoning and speculating. It is the individual's effort to humanise himself by partaking in the tradition of all the best that earlier generations have bequeathed. The complicated political history of Austria was certainly interesting enough to attract the attention of a bright teenager. In fact, much of Mises' later work can be seen as an attempt to understand the problems of his age from the point of view of economic theory and social philosophy. But even more fundamentally, he was interested in practical questions.

43:12What could governments do to make their country a better place? Mises was never interested in merely collecting historical data. He wanted to explain history, to trace, observe events back to their causes and he wanted to apply these insights in practice. How did the political and social institutions of his fatherland come into being? What were the causes of ethnic and social strife and how could one combat them? What were the roots of imperialism? What were the causes of the great social progress of the 19th century in rising literacy, declining infant mortality and higher mass consumption? All these questions and their answers were The preliminaries to action. Given our knowledge about causes and effects in social life, what is to be done now? For example, how could one promote the welfare of the working classes now more than in the past decades? A family tradition of commerce and social leadership had made young Mises used to seeing and seeking the bottom line. He brought this emphasis on results to the study of social life and social strife, which prepared him, as he would

44:21Say, to take an active part in the great issues of his age. Thus, he turned to the study of intellectual disciplines that promised to give guidance in political matters, and because the conflicts of his era and ours were largely economic ones, Mises ultimately became an economist. Many years later, he wrote these lines. All the political antagonisms and conflicts of our age turn on economic issues. It has has not always been so. In the 16th and 17th century, the controversies that split the peoples of Western civilisation into feuding parties were religious. Protestantism stood against Catholicism, and within the Protestant camp, various interpretations of the Gospels begot discourse. In the 18th century and in a great part of the 19th century, constitutional conflicts prevailed in politics. The principles of royal absolutism and oligarchic government resisted by liberalism in the classical European meaning of the term that advocated representative government. In those days a man who wanted to take an active part in the great issues of his age had to study seriously the matters of these controversies. Only boers neglected

45:36to inform themselves about the great problems that agitated the minds of their contemporaries. In our age the conflict between economic freedom as represented in the market economy and totalitarian In government omnipotence, as realized by socialism, is the paramount matter. All political controversies refer to these economic problems. Only the study of economics can tell a man what all these conflicts mean. Nothing can be known about such matters as inflation, economic crises, unemployment, unionism, protectionism, taxation, economic controls, and all similar are issues that does not involve and presuppose economic analysis. A man who talks about these problems without having acquainted himself with the fundamental ideas of economic theory is simply a babbler who parrot-like repeats what he has picked up incidentally from other fellows who are not better informed than he himself. A citizen who casts his ballot without having to the best of his ability studied as much economics Conflicts as he can, fails in his civic duties. Economic conflicts were at the forefront of social dissension in Austria-Hungary during Mises' early years, and were debated each

46:49day in the press, in new books, in cafés and in the streets. Let us look more closely, then, at the fundamental political problems of Fein der Zirke Austria. Austria-Hungary Austria-Hungary as a political entity came came into being after the defeat of the older Austrian Empire in 1866 by the Prussian armies at the Bohemian town of König-Gretz. The conflict with Prussia was over supremacy within the Germanys. The military defeat settled the question in favour of Prussia, but the Habsburg family did not abandon its plans to regain its traditional position of leadership. The greatest problem for the Habsburgs' ambitions in the age of the nation-state was that their empire was not predominantly German. The Hungarian population was approximately the same size as the Austro-German population, and the empire contained several million each of Czechs, Poles, Romanians and Ruthenians, as well as a handful of smaller nationalities.

47:52In the eyes of the liberals, in those days the strongest political force in the Germanys, this hodgepodge of nationalities disqualified the Habsburg family from leadership of the After the defeat in the 1859 Italian campaign, various Austrian governments sought ways to make the empire more German and more liberal to emulate the idea of a liberal nation-state. A constitutional reform in February 1861 under Prime Minister Schmirling addressed the nationalities problem through the introduction of estate parliaments, Kurienparlamente. The idea was is to use parliamentary representation as a means to settle political conflicts between different ethnicities and different social classes without resorting to the nefarious one-man, one-vote principle. The Constitution guaranteed a majority of seats to the political and economic establishment. Primarily it guaranteed the ethnic Germans and their allies a majority of seats, even where they were in the numerical minority. The Schmerling Constitution tried trying to make up for Austria's lack of German character, but with the military defeat at the hands of Prussia, a more pressing problem suddenly appeared, separatism. The Habsburgs

49:09felt they had to secure their power base by finding a way to guarantee the continued loyalty of the Hungarians. This was done in the so-called Ausgleich, settlement, that was hurriedly crafted and ratified within weeks after Königgräts. The Austrian Reichsrat voted a new constitution on December 21, 1867 The Asgleich established the principle of political dualism in Habsburg lands, the subdivision of the empire into two spheres of influence, one under German rule, the other Hungarian. The Asgleich granted far-reaching autonomy to the Hungarian gentry and made them de facto rulers over other peoples within the confines of Hungary. This concerned in particular Slovaks and Romanians. The Kingdom of Croatia and and Slavonia was also part of Hungary, but it was relatively autonomous.

50:02In exchange, the Hungarian establishment did not contest German hegemony in the other lands of the Empire and they consented to the continued existence of a common dynasty, a common foreign policy and a common army. The Ausgleich also guaranteed the economic unity of the Empire. From its very inception, however, the Ausgleich was prevented from securing internal peace because its stipulations were interpreted in fundamentally different ways. In the eyes of the German side, the Ausgleich was an agreement reached between the different nations of the Empire which implied that the signatories from the very outset conceived of themselves as part of a larger political entity. The Emperor was not one of the contracting parties, rather he presided over the whole political entity and the contract was between In contrast, the Hungarians saw the Ausgleich as a bilateral affair between themselves and the King of Hungary, who also happened to be the ruler of Austria and various other foreign countries. It was only incidental that the agreement with their monarch was

51:08mirrored by a parallel agreement between the Austrians and their emperor. In short, the Hungarians considered themselves a sovereign nation on its way to full autonomy, and the The Ausgleich merely one step on this path. They were pressing these demands on their legal representative, the King of Hungary. The King was of course Franz Josef himself. For this reason alone the Ausgleich failed miserably in providing a basis for the continued peaceful coexistence of the various Austrian nations, and thus for Habsburg power. Year after year the Hungarians presented new claims and reached new compromises at the cost of and the rest of the Empire. German-Austrians interpreted these ever-increasing demands as political extortion. They despaired over the disputatious behaviour of the Hungarians, which undermined the very existence of the Empire, but the Hungarian campaign did not suffer the slightest trace of remorse, and it steadily gained ground. How successful it was can be inferred from its impact on political language. The words Austria and and Reich were increasingly abandoned to suit Hungarian-style political correctness. Common

52:19institutions of the Empire were no longer called by the prefix Reich as in Reichskriegsminister, but by the prefix KUK, kaiserlich und königlich, imperial and royal, thus KUK Kriegsminister. By contrast, Hungarian state institutions were prefixed with K as in kingly, referring to to the Hungarian Crown and the state institutions of the other non-Hungarian territories which shared a common parliament under German supremacy, the Reichsrat, were prefixed with KK, Imperial Royal. Curiously, these other territories did not even have a common name. They were only the kingdoms and lands represented in the Reichsrat.

53:06In a great satire on this abbreviation orgy, Robert Musil, in his famous fernesiaque novel The Man Without Qualities, called the country of his hero, Cacanian, Cacaland, and said it was the only country that declined for lack of a name. The Ausgleich also provoked resistance from others, most notably from the Croats and the Czechs. Support for the Ausgleich came from the Poles and the Italians. Both nations were Both settled predominantly in areas where they had the economic and political power, but were numerically inferior to other local nations, Ruthenians, Southern Slavs. Both saw the Ausgleich correctly as a scheme to perpetuate the current political privileges of Germans and Hungarians.

53:52The Czech radicals, calling themselves the Young Czechs, became famous for their ruthlessness in adopting the Hungarian strategy. Their representatives boycotted the sessions of the Reichsrat, the parliament of the Austrian half of the Empire, and claimed to be one sovereign nation, which would deal only with its own King of Bohemia, who happened also to be the Emperor, and they would do so only to secure more liberties for the Czechs. The ultimate effect of the Ausgleich was to alienate step-by-step all nations from the Empire. A radical element in each nation increasingly refused to perceive themselves as part of a larger whole. They considered disputes with other nations of the Habsburg crowned to be matters of their own foreign policy that did not involve the Empire or the monarchy.

54:38This tendency was reinforced in a fateful way when, in 1878, the southern Slav lands of Bosnia and Herzegovina fell under the dominion of Austria-Hungary. This was one of the stipulations of an agreement of seven governments at a congress in Berlin in August 1878. The Berlin congress dealt with territorial questions in south-eastern Europe and the Middle East. It was prompted by a crushing Russian victory over Turkey, and signed by these two states as well as by the governments of Austria, Hungary, Germany, France, England and Italy. Rather than granting autonomous status to the new territories, the Hungarians immediately claimed the right to rule them, arguing that at some point in the distant past they had been conquered by a Hungarian king. Bosnia-Herzegovina therefore came under the co-dominion of Hungary and the kingdoms and lands represented in the Reichsrat. Over the next 30 years this This divided rule from Vienna and Budapest created fertile ground for Southern Slav nationalism and Serb agitation. It was a major factor in the events that eventually precipitated

55:45the world into the Great War and destroyed the Austrian monarchy. Following the Hungarian strategy, the radicals of all nations eventually refused to deal with any other nation at all. The central government in Vienna made concessions concerning and the use of language in the local branch offices of its bureaucracy. And so, around the year 1900, German, Hungarian, Italian, Czech, Polish and Serbo-Croatian were all in official use. But such concessions could not satisfy the aspirations of the radical. At the turn of the century many Italians, Czechs, Slovaks, Poles, Ukrainians, Magyars, Romanians, Serbs, Croats and Slovenes strove for national independence. They insisted on and the sovereign status of their ethnic group, and argued that matters of domestic policy existed only insofar as they pertained to their relationship with the local monarch.

56:41The greatest problem of this stance was that the traditional political territories, the kingdoms and lands, did not have nationally homogenous populations. Except for some of the alpine regions, all these traditional territories hosted at least two nationalities, and more. Von Joseph slipped more and more into the impossible situation of being the sole embodiment of a political entity scorned by millions of his subjects, the Empire. He was still acceptable as a political partner, but only in his capacity as a king, that is, as King of Bohemia, King of Hungary, King of Croatia, etc. In the minds of his subjects, the monarch was the only element that tied together the The various lands and nations who felt no desire or no need to come to terms with one another.

57:30One of Mises' fellow students recalled, No more than three hundred meters separated the university from the parliament building in the Vienna Ringstrasse. If the young people fought almost daily at the university, the conflicts of the deputies were of equal violence, and were battled with a fanatical passion unknown in other countries. countries. If you went only a hundred steps further on from Parliament, you could see every day and usually more often a carriage drawn by two horses drive out of the Hofburg. In it sat the old Emperor and his equally elderly adjutant, and they would set out for Schönbrunn at an easy trot, always at the same hour and always down the same street. There was no security escort ahead or behind the carriage. No policeman sat in the vehicle itself, any assassin would have had an easy job, but nobody took the opportunity.

58:27The fellow student goes on to observe, The leaders of our modern great empires are driven rapidly in bullet-proof cars, protected by countless bodyguards. Aristotle thus defined the difference between a monarch and a tyrant. The monarch protects his people, the tyrant has to protect himself from them. Franz Josef, who had begun his reign as an arch-reactionary and gave his consent to constitutional government only after two lost wars, eventually became the glorified, almost mystic embodiment of a state that few of his subjects really desired. He presided over the radical transformation of Austria that started after the revolution of 1848 and stretched until the very end of of his reign in 1916, a transformation that left no sphere of social life untouched.

59:18The contemporary witness, himself a democrat, born around the time Franz Joseph ascended the throne, recalls the awe that the Emperor inspired in all his subjects. And the Kaiser had lived through, in fact co-sponsored, truly monumental changes. The almost feudal landed lordship, with its peasant subject to the estate, sleepy little towns with their handicrafts organized in guild, a capital city with concentric walls and bastions, with large ramparts and glaces, a society the ruling intellectual power of which was the church and the materially moving power of which was still the stagecoach and the horse, all this formed the environment of the beginning reign of Francis Joseph, which was to encounter so many material and intellectual innovations.

1:00:09Almost all laws that created or made possible landed property for citizens, free peasants and country workers, handicrafts and industry, large-scale trade, railroads and steamship transport and insurance and banking services were signed with his name. The tremendous development of modern capitalism fell into the period of his reign and thereby the transformation of the Absolutistic Patrimonial State into a Constitutional Monarchy, the rise of the free citizenry, the flowering of the citizens' parliament, the cultural unfolding of all nations of the Reich, along with the inevitable frictions of the maturing process and finally the rise of the working class, the spreading of the social idea, and the beginnings of social legislation.

1:00:59Whoever met Francis Josef at my time felt the breadth of a long and grand period of history that he has carried on. Seldom a single human life has encompassed such immensity. But even those who had not inherited sentimental feelings for the Emperor could hardly fail to perceive his pivotal role within Austria-Hungary's political system. Ludwig von Mises's contemporary and fellow student, Felix Zumary, recalled his father telling him, This empire is quite different from the rest of the world. Imagine the emperor and his government gone for even one year, and the nationalists would tear each other to pieces. The government is the fence that separates the zoo of wild animals from the outside world, and nowhere else are there so many and such dangerous political beasts as we have.

1:01:52Young lads such as Felix learned early on to appreciate the benefits of the monarchial order in Austria, understanding that the monarchy was not some historical relic, but the sole possible institutional framework for holding eight nationalities together on Europe's most dangerous frontier. It was to no avail. Imitation of the Hungarian strategy mushroomed after 1867, and culminated in the late 1890s German Prime Minister Count Bardeni saw to solve national conflicts between Germans and Czechs through legislation that put the two languages on an equal footing within the Bohemian government. Ethnic Germans saw the ordinance as the last straw in an ongoing series of concessions to the Czechs.

1:02:37Bardeni was not prepared for the level of animosity the Germans of Bohemia and the rest of the empire directed at him as a result of his legislation. They began disrupting parliamentary proceedings and instigated violent protests. The Emperor, frightened by the mass agitation of some of the most important segments of society, dismissed by Dany in November 1897. Socialism Austrian Style The national conflicts within the Empire were compounded by social conflicts resulting directly The liberalisation of trade, transport, banking and industry had completely transformed the Austrian economy, undermining the social and political position of the old elites.

1:03:26The aristocracy and clergy despised the emerging coterie of capitalist upstarts, and in their political rearguard action against liberalism and capitalism, they allied themselves with and the economic losers of the transformational process. The great number of people employed in traditional forms of production, including small-scale farming and those handicrafts that had become obsolete in an era of more efficient factory production. They were not necessarily losers in the sense that their income had been reduced in absolute terms. It was rather that their relative economic and social positions had deteriorated in comparison and to those of their relatives, friends and neighbours who had found employment in the new capitalist corporations. Petits bourgeois residents of fin de siècle Vienna especially resented the success of the new Jewish middle and upper classes, which most visibly represented the changes in Austrian society induced by the liberal reforms. There had been virtually no Jewish residents in Vienna before 1848 because Jews were not allowed to own land in the city or to stay longer than three days within its walls. Only about

1:04:36two hundred distinguished Jewish families, such as Rothschilds, had obtained an exemption from this policy. All others had to leave the city after three days and re-enter it at another gate to obtain a new visa. As a consequence, Jews were virtually unknown to the general population, and those who had actually met Jews in person remembered them as impoverished Talmud students in Galicia and other rural regions of the empire. Things changed radically in the wake of the revolution of 1848, when the restrictions on Jewish real estate ownership were abolished. By 1857 about 7,000 Jews had settled in Vienna. This was the beginning of a great wave of Jewish middle and upper class immigration. Starting in the 1860s, well-to-do Jewish families flocked into the capital. By the turn of the In the century there were 145,000 Jews in Vienna. By 1910 it was 175,000. Only Warsaw hosted a larger Jewish population. In a city as small as Vienna it was now impossible to overlook the Jewish presence. The new wealthy Jewish residents clearly outnumbered the Catholic

1:05:45Nouveau-Riche. For traditional city dwellers, liberalism, capitalism and Jews were all alien and intruders. These urban masses in Vienna were easy prey to the old elites where they began to organise a political backlash against the capitalist movement. Two parties were particularly effective, the German Nationalists and the Christian Socialists. As a schoolboy, Ludwig von Mises witnessed first-hand the rise of the Christian Social Party in Vienna. In 1882 the Vienna election law had been modified to extend suffrage to lower income groups. These voters eventually secured the sweeping victory of the Christian Socialists under Carl Luger in the communal elections of 1895. Luger, commonly called Handsome Carl, their Schöne Carl, was the incarnation of the modern politician. He knew how to flatter the man on the street.

1:06:40He did not count on winning by argument, but relied entirely on appeals to voters' feelings, fears and resentments. Although he had risen from lower-class origins in the liberal age, and harboured no personal ill-will to a Jew, he built his election campaign squarely on anti-capitalism and anti-semitism. The emperor despised Luger's anti-semitic tactics and refused to appoint him mayor of Vienna, but after three consecutive election victories Franz Joseph eventually gave in and Hanson Carl became mayor on April 20, 1897. Luger immediately proceeded to enlarge his power base by incorporating many suburbs into the city of Vienna. After the incorporation had been completed in 1902, Vienna became a secure dominion of the Christian Social Party. It would remain so until the end of World War I, when the Red Socialists won the majority in the city and started one of the greatest experiments in communal socialism ever, turning the capital of Austria into Red Vienna.

1:07:46Like the Christian socialists and the German nationalists, the socialist movement was ultimately an offshoot of the liberal transformation of Austria-Hungary. But whereas the former groups resisted this transformation, the socialists were carried along with it, and its leaders were quite conscious of the irony, or as they would say, dialectics, that they were children of the capitalist revolution. They were spoiled brats bound for patricide, praising the economic Socialism and Capitalism were but two faces of the same radical and rapid transformation of the economy, society and politics. For this very reason both of them lent themselves to the integration of Jewish elites into leadership positions. Just as capitalism enabled a greater number of Jewish entrepreneurs, statesmen and intellectuals such as David Ricardo, Disraeli and Ludwig Bumberger to rise to wealth and influence. So the socialist movement was a predominantly Jewish movement at the leadership level. La Salle and Luxembourg in Germany, as well as Kautzky-Bauer and the Adlers in Austria, were all of Jewish origin. In short, liberalism had paved the way for freely experimenting with new modes of production, and thus led

1:09:06to the emergence of the factory system. With the large factories came many Jewish capitalists and a proletariat with a Jewish leadership. Georg Franz has argued that the rising Austro-Jewish establishment was instrumental in promoting a homegrown brand of classical liberal doctrine. In contrast, the new urban proletariat was a largely non-Jewish group without traditions. It therefore lacked social and political institutions and quite naturally became fair game for politicians and political movements, all parties tried to mobilize the new urban masses for their causes, and until the 1880s the German nationalists and the Christian socialists had the upper hand in this endeavour. Things changed only when the socialists triumphed in German elections.

1:09:57Their popularity extended to the Austrian proletariat, winning many over to the socialist cause, but not all of them. When handsome Karl made anti-Semitic slurs at election rallies, he knew what he was doing. It was the one sure way to lure voters away from both the liberals and the socialists. Like all social democratic parties in Central Europe, the Austrian organisation was entirely under the sway of Karl Marx's doctrines. Marx had reconstructed the theory of socialism in a way that made it especially appealing to the urban proletarian masses. In his account, the proletariat was the social class that embodied the future of socialism. Liberalism and capitalism, Marx argued, were merely an intermediate phase of social evolution.

1:10:44Their main function was to give birth to the proletariat and then to impoverish it, thus inciting the working masses to the final revolution which would create a classless society and bring about the end of history. By the time twelve-year-old Mises had completed his first year of school in Vienna in 1893, Marxism had already lost much respect and attraction. Twenty-five years had passed since the first publication of Das Kapital, and events had clearly refuted Marx's predictions about capitalism's propensity to create misery among the working classes. The uncomfortable evidence induced a split among socialist intellectual leaders. Edvard Bernstein criticized Marxism and proposed a revised theory of socialism. He recognised the ability of capitalism to improve the material lot of the proletariat. Rather than seeking to overhaul capitalism, he argued socialists should strive to correct its flaws through democratically elected governments.

1:11:47Bernsteinian revisionism was part of a more general effort to turn the socialist movement away from its Marxist fixation on the violent overthrow of present social conditions. Under the leadership of the Vienna doctor Viktor Adler and of the Marxist theoretician Karl Kautsky, the Austrian Social Democrats gave a clear endorsement of the principles of non-violence and legality in political struggle. Kautsky distinguished himself by advocating a determinist brand of Marxism, that is, he believed that Marx had discovered strict laws of social evolution. Capitalism necessarily led to Socialism and Communism, and it was therefore devoid of sense to try to push things through violent overhaul. Norbert Leys argued that Kautsky thereby exercised a nefarious influence on Austrian Socialism.

1:12:38Kautsky's determinist views spread fatalism and paralysed the activities of socialist practitioners. At the Heinfeldt Party Congress in 1888-89, which united the violence-prone ideological radicals and the union-dominated moderates Adler and Koutsky, championed piecemeal social reform through universal suffrage and parliamentary legislation, Marxist radicals in other countries heaped ridicule on this affirmation of the legitimacy of the state and its organs, calling and the approach of their moderate Austrian comrades K.K. Social Democracy. German pronunciation of the letter K renders the epiphant identical to international slang for excrement. But the new strategy was undeniably successful. During his school years, Mises followed the progress of the social democratic agitation in favour of universal suffrage.

1:13:34He left first-hand the conflicts he would later spend so much time analysing. His contemporary It had been eighty-four years since the Congress of Vienna and both Europe and America basked in the long peace and looked down on the Austrians as incompetent, immature, patiently enduring a tyrant's yoke. The reality was quite different, for the big issues that were struggling over in Austria had not been dealt with in other countries. On the contrary, they had not even surfaced in those countries and were to do so only decades later. Nationalism, political While anti-Semitism, even communism were already fighting issues with us, while in the rest of the world the curious duality of liberalism and imperialism still held sway.

1:14:19While all the rest in their smug peace and quiet looked down at the Austrian turmoil as if at some curiosity, we young people felt ourselves at the very centre of political events, for our world was far more real than the other. We didn't discuss, we fought, not as outsiders imagined over the questions of the day before yesterday, but about those of the day after tomorrow. When in later decades the new barbarianism came flooding in, it surprised the West. For us, it was a familiar phenomenon. We had seen it churning with wild and uninterrupted turbulence at the heart of a highly developed and refined civilization. I say we, meaning the entire intellectual youth of Vienna at that time. We stood at a decisive turning point in history and felt it in our innermost being.

1:15:09Which Career As the nineteenth century drew to a close and Ludwig reached the age of legal maturity, he took some time to consider the path that day ahead. Austria-Hungary offered four career options for well-educated young men. These were in order of their prestige, the military, public service, the liberal arts and commerce. In liberal post-1848 Austria, industry and commerce were, with some exceptions, open to anyone, even though they were often subject to countless regulations, remnants of the pre-1848 police state. Activity in these fields attracted the educated young men of the bourgeoisie, and entrepreneurial leadership was exercised by the most daring strata of the population, including Jews who excelled as merchants, bankers and insurers. The liberal economy had given these entrepreneurs great opportunities to serve their fellow citizens and thereby earn great fortunes for themselves. They usually started in a province of the Empire and then expanded to all of Austria-Hungary and sometimes to an international scale. Once they reached this size, they transferred company headquarters and moved their families to Vienna. However,

1:16:24the great majority of the sons of provincial engineers and entrepreneurs did not aspire to follow in the footsteps of their fathers. Encouraged by their parents and with the constant personal support of their mothers, they sought to become lawyers, physicians, scientists, artists, public servants or politicians. Young Ludwig was no exception. His father's example had inspired him with respect for the civil service and with a desire to use his energies to the benefit of the commonwealth. Philosophy, politics and history were more attractive to him than the old trades of his family. He decided to study at the University of Vienna, get a degree and seek employment in the civil service. He passed the final written exam at the Akademischen Gymnasium in May 1900 and the Orals in mid-July of that year. In the fall, together with his classmates Hans Kelsen and Eugen Engel, Mises enrolled in the Department of Law and Government Science.

1:17:22He was a handsome young man with blue eyes, 5 feet 8 and a half inches tall, 171 centimeters. He came with a great education, a razor sharp mind and passion for ideas that could be applied for social progress. He was made for the university.