Mises's Liberalism Revisited

0:00I'm very happy to be here today addressing this great conference of the Mises Institute, especially on the occasion of its 25th anniversary and the presentation of the Gary Schlarbaum Award to my friend Bob Higgs. I feel somewhat funny about addressing you on the thought of Ludwig von Mises. As far as economics goes, most, probably all, of our speakers are in a better position to inform you than I am. And most of all, we now have Guido Hülsmann's magnificent work on the life and thought of Mises. I think you've seen it all, I hope you've considered at least buying it.

0:48has remarkably few references in the index to me that's surprising that Judy Thomason is one of the best index makers in the country besides a proofreader and copy editor and I don't know shoot well I don't believe in I do believe in My friend Murray Rothbard used to say, every conspiracy is true, and there certainly is a point to that. Nonetheless, Dieter Holtzman's magnificent work is a landmark in intellectual history and the definitive work on Mises, of course, but also on the whole history of of the Austrian School.

1:40All I can claim is that I personally was acquainted with Mises and have been familiar with his work for a very long time. You know, on the other hand, I was acquainted with Cobden and Bright, according to Dr. Thornton. I was introduced to the thought of Mises by my high school buddy George Reisman, who had I had already read Human Action when we were at the Bronx High School of Science. Then, by some chance of fate, we met Leonard Reed and his staff at the Foundation for Economic Education. Through Reed, we were invited to attend the Mises Seminar at New York University. That's where I first met Murray Rothbard, another very fateful encounter, and a friend of mine until his untimely death.

2:33As soon as we entered college, George and I began an intensive study of the German language. After a couple of years of German, George translated Mises's epistemological foundations of economics and also a work that Mises admired very much on the philosophy of history by Heinrich Rickert, which Mises had suggested to George. And I translated Mises's liberalism. Both translations were funded modestly because they didn't have much money by the William Volcker Fund. The William Volcker Fund was a small libertarian and old right foundation which also helped to support Murray Rothbard.

3:19And ever since then I followed the vicissitudes of Mises' reputation. I was interested to see that when Mises died in October 1973, and as a matter of fact just a couple of days ago, it was the 34th anniversary. Even the New York Times, and it's an obituary, called him one of the foremost economists of this century. And later Milton Friedman, though he was from a totally different positivist tradition of economics, called Mises one of the great economists of all time. Mises' scientific achievements were indeed awesome. There's his pioneering work in monetary theory and the business cycle going back to 1912, his profound work in the methodology of economics and the a priori derivation of economic truths, systematizing all of economic theory in his magnum opus, Human Action and much, much more.

4:19But I want to focus for a moment on another of his great contributions. At one time, people who called themselves socialists had an ideal and a goal. Now socialism just means constantly carping on the ever-changing critique of the free market. In my own lifetime, it was that the free market produces tail fins on cars. I don't know if you remember that. That it advertising seduces people. It goes, oh, it never ends. At that time, in the old days, the socialists had a definite program. It was a centrally planned economy. It was the rejection of the anarchy of the market. They called it the scientific wave of the future.

5:07This was the faith of thousands upon thousands of professional intellectuals in all countries, the people that my friend Hans was just talking about. One example, just read Albert Einstein's article, Why Socialism. You can easily find it on the internet. Read it, it's a short article, an unbelievable bunch of cliched rubbish. Sometimes, as with Einstein, socialists did raise the possibility that there might be some excessive bureaucracy in a socialist society. One might also wonder how it would be possible to combine a centrally established plan with a democracy which they also favored in any normal sense.

5:55But anyway, the socialists didn't deal with this. In any case, these were by no means the main problem. What of the feasibility of abolishing private property in the first place? How can there be any rational economic calculation if there is no market for capital goods, as there cannot be under socialism because the government owns all capital goods? How would the scientific socialist planners know how to allocate capital? They have to allocate capital among all the possible competing uses, as our Randian friends would say, blank out. It was Mises' accomplishment, the sign of his superb independence of mind, to have brushed aside this pious, one just doesn't speak of such matters.

6:48Instead he presented comprehensively and arrestingly the insoluble problems of socialist economic calculation. The socialists attempted some weak rebuttals. They argued for something called market socialism. where you can have a market and yet the government owns everything and there was a big debate and of course the mainstream writers all said that Mises was wrong. Socialism would work just fine. About 15 years ago after the experience of the Soviet Union in every real existing socialist system, the socialist economist As Robert Heilbrunner wrote, in the end, it turns out, of course, that Mises was right.

7:37Whoops! I love that, of course, it turns out. The consequences of neglecting Mises can be seen in the history of the 20th century, in the tens of millions of diminished and destroyed lives in Russia, Poland, Hungary, China and and elsewhere. Now, Mises lived in Vienna, which was not only the city of art and music, the great composers Haydn, Mozart, Beethoven, Schubert, whose patronage, by the way, was afforded by the monarchy and the aristocracy. But after a while, democracy arrived in Vienna and the beginning of the 20th century and Vienna became the city that three times elected a violently anti-Semitic mayor, a man named Carl Lueger, who was the original National Socialist. Adolf Hitler lived in Vienna at that time and Hitler's world view was shaped by Carl Lueger. The Viennese still in the great Ringstrasse belt of avenues and plazas that surrounds the downtown, they have a Carl Lueger plots because he was loved by the Viennese.

9:12And here is Mises in Indiana, the grandson of the high rabbi of Lemberg, not only a Jew but already the leading classical liberal, east of the Rhine, maybe the last authentic liberal in Europe. So Mises was woefully isolated. But as he wrote in his memoirs, I would not lose courage even now, I would not tire in When professing what I knew to be right, so I decided to write a book on socialism, which I had contemplated before the war, before the first world war, I now set about executing my plan. The book Mises Contemplated appeared in 1922.

9:58It was called Socialism, and that book found its remnant, as Albert J. Nock would say. Hayek explained in the introduction he wrote to the new edition of Socialism, published by the Liberty Press, when socialism first appeared its impact was profound. It gradually but fundamentally altered the outlook of many of the young idealists returning to their university studies after World War I. A number of my contemporaries who later became well known but who were then unknown to each other went through the same experience. Wilhelm Röpke in Germany and Lionel Robbins in England, about two examples, and Hayek himself, of course, but there were many others.

10:47So Mises began to find supporters of his views. His influence was spread through his famous seminar in Vienna, which included many thinkers who went on to achieve international eminence. and he continued to write for the rest of his life. One book is the one I translated, Liberalism, published in 1927. The translation has gone through a number of different names since it was published in 1962, but never gone out of print. The work is a short but excellent introduction to Mises' social philosophy. What stands out in Mises's work is that he places at the very head of the liberal program, private property.

11:36Karl Marx and Friedrich Engels had stated in the Communist Manifesto that the theory of communism can be summed up in one expression, the abolition of private property. So in liberalism, Mises begins with private property, and he maintains that all the rest of the liberal theory, liberty, peace, rule of law and all the other principles, follow from this one principle of private property. This distinguished Mises boldly from the rest of the writers, who were now calling themselves liberals in those days, as they do today. They had hijacked the name of liberal, but in reality they were nothing but social democrats in disguise.

12:22So why was Mises ignored for so many years? At his seminar at NYU, for instance, NYU did not even pay his salary. It was paid by the Volcker Fund. Just as at Chicago, the University of Chicago did not pay Hayek's salary. It was paid by an outside foundation. In fact, F. A. Hayek could not even get a job in the economics department at Chicago, the department of Milton Friedman and George Stigler, because they did not consider him a scientific economist. Instead, he taught at the Committee on Social Thought, where I studied. Still at NYU, Mises had a handful of PhD students. Among them were Hans Zenholz, Israel Kirzner, and George Reisman. What could account for this lack of respect shown to Mises? I think it was what Jacques Rouef, famous economist in his Mises never budged an inch. He never gave an inch. As all the changing fads came and went that captured the loyalty of generation after generation of the intellectuals that Hans was talking about, from militarism and imperialism, which were all a rage at one time, to fascism, considered the wave of the future in the 1930s,

13:54Agenism, every variety of socialism. Lew Rockwell wrote an excellent article a few years ago called Heart of a Fighter, which you can find in the archive of the Mises Institute. And the thought of Ludwig von Mises lives on, has been spread today to many new thousands by the work of Lew Rockwell and his wonderful staff at the Mises Institute. It has shaped the thinking of Ron Paul, whom you've heard of, the great Ron Paul. I've shaken the hand of Ron Paul, as I did many, many years ago, shake the hand of Robert Taft. And in my view, Ron Paul is greater than Taft was even, and Mises' influence can be seen directly in the Mises Institute and the thinking of many of us, and directly or indirectly, in the heroic young fanatics who show up whenever Ron Paul is there and keep chanting Ron Paul, Ron Paul.

15:17I love those guys. And I think the influence of Mises' ideas will be spread even further by this great work of Guido Hülsmann. This is a great work. You don't have to read it all the way through, it's kind of like an encyclopedia, dip into, no you couldn't, if you want to read it all the way through. But you can dip into it, check out the references to me. Mises The Last Night of Liberalism When I first learned of the title, Mises The Last Night of Liberalism, I was a little puzzled, but eventually understood.

16:23It has come down to us from the late Middle Ages the phrase, night without fear and without reproach. and that was what Mises was, a night without fear and without reproach, filled with courage from beginning to the end, with an intellectual integrity that remains an inspiration to us all and will inspire those who come after us.