A Personal History of the Mises Institute

0:00Since this is the 25th birthday, I thought we'd talk about the origin and the early years of the Mises Institute, because I've been there from almost the very start of the Institute in 1982. This will necessarily be an abbreviated version because of the time limitations, and I'm sure many people are going to be left out, but I do think it's important to know exactly how Lew Rockwell came to create the Institute and some of the original people that were involved in it. Of course, everyone here tonight is responsible for the great success he's had over the years, and I'm going to cut this off with just the origin of the Institute. But 15 years ago, here in New York, we were celebrating the 10th anniversary, and Lew gave me a plaque commemorating the fact that I was one of the founders of the Institute, which I've always valued and kept on my wall, but really, in fact, there's only one founder of the Institute and that's Lew Rockwell.

1:13Two of the most important and earliest people to the Institute, of course, were Margaret von Mises and Murray Rothbard. Let me recite some of the background of Lew and how he came to know the people to put it all together. Lew was a senior editor of Arlington House Publishers, one of the great publishers of conservative, classical, liberal and libertarian literature. Unfortunately, they are no longer in business. Business. But Luther held a position in the late 60s and one of his assignments was to serve as editor for the works of Ludwig von Mises and Henry Hazlitt. And in this connection he spent most of his time involved with the works of Ludwig von Mises. It was his emphasis on Mises that led him to request having a dinner in New York with Ludwig von Mises and Mises Mises and so they met here and discussed his work and this was in 1968.

2:17This meeting of course will prove to be very important later to the creation of the Mises Institute. Also his editorship was Henry Hazlitt and of course he met Hazlitt and again this proved later to be important to Mises Institute. After At Arlington House, Lew became connected with Hillsdale College and was in charge of their ideological activities and papers. And the college is justly famous for the fact that it did not accept any government funding. Following Hillsdale, Lew became Chief of Staff for Congressman Ron Paul in the late seventies.

3:06And again, you can see that that proved very beneficial to the Institute later. But for some time after the death of Ludwig von Mises in 1973, Lew became concerned that Mises' ideas and his works would not get the attention that they deserved and that some volumes might go out of print. So in 1982, Lou made an appointment to come to New York and meet with Margaret von Mises and she, they knew each other of course from the dental meeting previously. He, she gave him her consent to start the Institute only if, and she would support it, she gave her commitment to support it, only if he would first give her his personal commitment, that he would devote the rest of his life to promoting the Institute and Ludwig von Mises' ideas and Lew made that commitment to her.

4:05This was a very risky commitment on his part because at that point in time it was just him and he had no contributors, no one to help him and immediately he first turned to Murray Rothbard and got Murray's commitment to serve with the Institute and Lou got his commitment to be the academic advisor and then Lou became president and Murray became vice president. Lou began talking with various people to try to get support and there were a lot of people that tried to discourage him from creating the Mises Institute because Because they said that Ludwig von Mises was just too uncompromising. To me, one of the endearing commitments or parts of Ludwig von Mises was his integrity and his courage to stand by his principles and be uncompromising when others did compromise and gave up on their ideas.

5:02So I think that's one of the great commitments that Ludwig von Mises had was to stay true We recognize that he needed to establish a commitment with a connection to a major university and an economics department to get the thing started. He wanted, of course, to have an economics department that was at least sympathetic to free market ideas, but hopefully had some sort of connection to Austrian economics. As you can imagine, at that time, there were not many possibilities. But after considering all of the possibilities, he decided on Auburn University.

5:50Lew had learned that Auburn University had an outstanding faculty of free market economists that had been carefully put together by department head over a period of about 20 years. And he had actually met one member of that faculty, Roger Garrison, who was not only sympathetic to Austrian Economics, but very much in favor of Ludwig von Mises' ideas. Lew also had a commitment, one of his earliest financial commitments, from Catherine Dixon Rowland, whose family lived in Alabama, and they were very strong supporters of Auburn University, and she strongly encouraged Lew to come to Auburn University. Lou also learned from a person named Marsha Friedman, who I think she was invited to be.

6:40I don't know if she's here tonight. Is Marsha Friedman here? She had been with the Cato Institute and I had met her in 1980 and she recommended me to Lou that I was a trustee of Auburn University, that I was not only sympathetic to libertarian ideas but actually to Austrian economic ideas and the Ideas of Ludwig von Mises. So, Lew contacted me in 1982 and got a call from Lew, and I've often thought about the excitement I had at that time is comparable to what Henry Hazlitt used to talk about. He answered the phone and the voice on the other side said, this is Ludwig von Mises. I'm here in New York.

7:26I'd like to talk to you. and of course Henry Hazlitt had been talking about Mises and his work for some time and they had that meeting but Lew came to my house in 1982 and we had a long conversation about what his dreams were for the Institute, what he thought the Institute could do for the University and what I thought the University could do for the Institute. so following that I met with the president of Auburn University and got his commitment to enter into a contract with the Ludwig von Mises Institute to give them space and then I took that matter to the Board of Trustees and in presenting this to the Board of Trustees they wanted to know what this Institute was and I told them it was for free market economics and I remember Well, one member of the board said, well, I'm fully in support of free market economics as long as you don't impose it on the field of agriculture where I have some investment.

8:28He said, I'm fully satisfied with the subsidies from the federal government. I said, we'll leave you alone. So, very briefly, I'll tell you a little bit about my background at that point. I was a refugee from the political system. I had been very active in the Republican Party. I had been an alternate delegate to the Republican Convention in 1968 and a delegate to the National Republican Convention in 1972. And I gave up on the Republicans with Richard Nixon at that point, tried the Libertarian Party. I was a delegate to the 76th convention and the 1980 convention, which occurred really in 1979.

9:15And a friend, a close friend of mine, he'd been elected governor of Alabama in 1978, and I told him that I was through with politics, that I thought the way to promote the ideas of freedom and the free market economic system was through education, and that that's what I wanted to do. so he appointed me to the Board of Trustees in 1980 and it was in that year also that I went to a conference in at Dartmouth College that Cato had put on and I was interested in that because I thought that that was the right way to go to have some Institute that would promote education and ideas and one thing that attracted me about that at that time Murray Rothbard was connected with Cato and he had actually I think suggested the name of Cato to them and that was part of what I had been reading was the correspondence of John Adams to Jefferson and others to the effect that the American Revolution did not begin in 1775, it began many years before

10:24in the hearts and minds of the American people due to what they had read in the pamphlets and the newspapers from Cato's letters by Trenchett and Gordon and the ideas of John Locke. So that was what I thought the way to go was. And so when I went to the Cato Conference, I wanted to see how they ran things. And also I wanted to go hear Ralph Rico speak on World War I. Tell you a little bit about the facilities at Auburn. Some of you may have visited, but I don't I think many of you came to the first facility. Auburn immediately gave Lew a place to have, and it was in the basement of a thatch hall, a classroom building. Lew only had two employees, but he was in a very, very small room in the basement, and not too attractive and not very impressive.

11:17But after a time, we got a new president, and he provided a small building that was actually literally in the shadows of the football stadium and it was very small but I think Lou had about four employees at that time. But after some time that same president gave me a commitment that the Institute would have the best facilities possible. So they built a new business school and I met with the architect and told him what all the Institute needed and when they built This beautiful building, the Mises Institute had the prime spot just as you go in to the right. He had about eight employees at that time, had access to conference rooms, the classrooms, and it was a really great facility. From the beginning, Lew and I agreed that the Institute would make donations to the economics department, not to the university generally, but just to the to the Economics Department.

12:19And Lew did that in lieu of any rent. And even though today there's no official connection with the University, the Mises Institute still makes donations to the Economics Department. Near the end of my last term on the Board of Trustees in 1999, I advised Lew that I thought that he should investigate the possibility of becoming independent from the university and get his own facilities. and so he began to look and he found a piece of property just across the street from the university about a block away from the business school and I don't know how many of you have been to the facility recently but it's a state-of-the-art facility built with contributions from many of you that are here.

13:05It is the, it's world famous, people are all over, I don't know if any of you have read the article in the Wall Street Journal about the Mises Institute, but it's an impressive facility and Lew now has the apartments back of there that are available for the students and visiting professors, so it's almost a whole block now, so it's a long way from that little bitty basement classroom up to what is there today. I think it would be interesting to you to hear who the first board of directors or board of advisors were. Mrs. Mises, of course, was the chairman. I was vice-chairman. But one of the other four very prominent people and the first, Frederic Hayek, who had been a student of Mises, It was a Nobel Prize winner in economics in 1974, the year after Mises died.

14:05As you know, he was the author of A Road to Serfdom, which was condensed in Reeder's Digest and became really popularized the free market ideas in one of the first books I read about Austrian economics and libertarian ideas. Secondly, there was a member of Congress by the name of Ron Paul, who is obviously the most qualified person to be President of the United States that's running this year. If this was a world of perfect justice, he would be elected. Ron assumed the position also at the very beginning to be called the Distinguished Counselor which is a position he still maintains. Ron has been very active in fundraising for the Institute. He's been a wonderful advisor. He comes to the meetings in Auburn often and of course he was a featured speaker here today.

15:08I want to insert one little footnote here that I think is extremely important that you probably will not see anywhere else in any of the media about Ron Paul. And he won't see it in the minutes of the Congressional Committee by the name of the International Relations Committee. But this event occurred at a meeting of his committee in October 2002, a full five months before the invasion of Iraq. Republican Congressman and Committee Chairman Henry Hyde of Illinois had a discussion with Congressman Ron Paul to the effect that Ron stated he knew that the administration was moving towards initiating military action against Iraq. And Ron announced he was planning to make a motion that Congress declare war against Iraq and then he would immediately vote against it.

15:59He said he was opposed to going to war without a declaration of war, which the Constitution clearly required. Ron's position was that it was a violation of the separation of powers for Congress simply to delegate that power to the President. And he said that there needed to be a debate, there needed to be a resolution, and he intended to vote against it. Henry Hyde, the chairman responded by stating the following and it's important to listen to this and what this means. Here are the words of Henry Hyde. Quote, there are things in the Constitution that had been overtaken by events, by time. The declaration of war is one of those. There are things that are no longer relevant to a modern society. We're just telling the president use Use Your Own Discretion and Judgment About the War."

16:55Think what that means. That's a congressman who swore to uphold the Constitution and just say it without an amendment. We ignore him. That part of the Constitution. He asked Ron not to offer the resolution because, quote, it would be inappropriate. It would be anachronistic. It just isn't done anymore, end quote. It's my understanding that Congressman Hayek had all that removed from the minutes of that committee meeting so that the public would not be able to see the flagrant violation of the Constitution that was taking place. And as you know, Congress has not declared war since December 1941. And since 1945, over 400,000 American servicemen and women have been casualties, that is, dead and wounded in undeclared, unconstitutional wars since that time.

17:48Think what it would be like if Ron Paul was president. Almost daily you'd have vetoes coming out of the Oval Office. You'd have radio and TV coverage every day of his speeches to the American people on the benefits of a free market economy, honest money backed by gold, a non-interventionist foreign policy and the need for Congress and the President and the Supreme Court to follow the Constitution in the future. Ron Paul could truly make a difference as President. Now continuing with the remaining two advisors to the Mises Institute, the other was Henry Hazlitt, and of course, as I mentioned earlier, Ludwig come in contact with Henry Hazlitt through being in Arlington House.

18:46It was Hazlitt's book entitled Economics and One Lesson that I read in 1961, which started by me on the road to the ideas of Mises and the Austrian economics in general. He had been one of the most outstanding promoters of the ideas of Mises from the beginning through his editorials in the New York Times and his articles in Newsweek magazine. He wrote so well that people like me that were not trained in economics could understand what he was talking about and that was true for so many other people. He continued to be an outstanding supporter of the Institute, and several years ago the Institute gave him a birthday party here in New York. Finally, at his death, he left a sizable portion of his estate for the support of the Mises Institute.

19:34Finally, the sixth member of the Board of Advisors was Professor Hans Schinholz, who died in June of this year. He was the first student of Mises in the United States to write a dissertation and receive He received a Ph.D. under the guidance of Ludwig von Mises. He was a long-time professor at Grove City College and was primarily responsible for that college requiring Mises papers, where they now are guarded treasure. Dr. Schinholtz was the 2004 recipient of the Gary Schlarbon Prize for lifetime defense of liberty, which is the highest honor that the Mises Institute bestows on anyone. I can't leave without making just one brief comment about the cost of war. During the first 15 years of the Institute, Lew and I probably had lunch together at least twice a week, talking about what was going on, what the problems were, and what the plans were.

20:33And when the Soviet Union fell in one of those conversations, probably in about 1999, and I told them that this would be a window of opportunity to talk about war so that there was a time of peace when people might listen to some criticism about war. And I suggested that a book be written by the institute called The Cost of War, America's Period Victories, which would show that Americans had primarily lost their freedom in winning Wars, and that it was only one time that there had been massive transfer of power to the federal government in the absence of war, and that was during the time of the Great Depression and the New Deal of Roosevelt.

21:21Lew liked the idea generally, but he said he thought we ought to have a conference first, and then I would be editor and invite people to submit articles to the book. So we had that conference in Atlanta, Georgia in 1994. One of my main memories of that is the excitement and joy of Murray Rothbard. He's known as a joyous libertarian, but I can see him now, he's just almost bouncing into his chair, he was so happy during that conference. And he participated in that and submitted two papers to that book. That book is frequently cited today even in books, one good book today, The Empire Has No Close, U.S. Foreign Policy Exposed by Ivan Elin, I noticed, cites the book fourteen times in the footnotes.

22:16I want to commend Lew for the courage he showed in taking the stand, the anti-war stand that it took at that time because there are a lot of people that consider any opposition to Award will be unpatriotic and a lot of contributors and supporters of the Mises Institute may have felt that way so it was a bold stand for him to take but I think it's one that Ludwig von Mises would have taken. In this short time I've tried to cover just a brief sketch of the early part of the Institute and I've had to leave out a lot of people and there were a lot of people also in the from the beginning, Burt Blument being one, is very important from the beginning. So in conclusion, I want to take this opportunity and I hope you'll join with me in thanking Lew Rockwell for his courage, his integrity, his entrepreneurship, his commitment to Mrs.

23:12Mises and for creating the Mises Institute.

23:21Thank you very much.