7. Friedrich von Wieser: From Economist to Social Scientist

0:00Chapter 7, Frederich von Wieser, From Economist to Social Scientist His tall, lean and slightly stooping appearance, his narrow bearded face, his blue eyes and his hair whitened with age always made a lasting impression on students and listeners. As a lecturer he spoke calmly and at a leisurely pace, without notes, and expressed himself and Classical Style. His admirers classed him among the greatest stylists of academic prose. In the culturally aware cities of Prague and Vienna, he was regarded as a connoisseur of art and good music, who would sometimes sit down at the piano himself to give society a sample of his ability. Even in his lectures, Friedrich von Mises, whose stature and demeanor in a single distance and aloofness, rarely tolerated questions and interruptions. A student who wished to have personal contact with him would have to pose some interesting questions.

1:04If this met with success, he dominated the conversation in truly royal fashion. The born thinker avoided disputing other people's writings and ideas directly. Managing without footnotes and bibliographies in his publications, Mises spoke and wrote on the results of his His own intense observations above all. One would think, not infrequently, he was witnessing the escapist inner monologue of a brooding mind. Come the end of his academic career, like a learned narcissist whose cognitive paths circled around his own ego, Wieser's reflections on his own intellectual development took up only slightly less space than all of his references to other authors put together. Friedrich von Mises was born in Vienna in 1851, the fourth of nine children. His father, Leopold, was initially the Director of Supplies in the War Ministry and later Vice-President of the Audit Office. He was knighted in 1859. Friedrich attended the Viennese Schottengymnasium at the same time as the young Eugen von Boehm-Bawerk. The Schottengymnasium, an institute for secondary The education at the Benedictine Monastery, Schottenklooster, was founded by imperial

2:19decree in 1807. This would result in a lifelong bond between the two and later Boehm-Bawerk would marry Friedrich von Mises' sister Paula. Coming to grips with Roman law while studying law at the University of Vienna introduced him to the problems of economics. The writings of the English sociologist Herbert Spencer, 1820-1903, directed his attention to the great Impersonal Forces of Human Society. But only upon reading Menger's principles did he find the perspective he was looking for, one he would perceive later in life as liberation from cognitive distress. After finishing his doctorate in 1875, Mises was able, as a result of Carl Menger's mediation, to gain a scholarship and hone his expertise under the great minds of Economics in Heidelberg, Leipzig and Jena. Thereafter, he spent a number of years in the State Finance Authority of Lower Austria until he presented his Habilitationthesis über den Ursprung und die Hauptgesetze des wirtschaftlichen Wirtes, 1884, on the origin and main laws of economic value. Going further than Carl Menger and William Stanley Jevons,

3:35He interpreted costs as foregone use or as opportunity costs and introduced the term Grenznutzen, marginal utility to economics. Mises' first publication met with little response outside Vienna. Nevertheless, in 1884 he received, as Emil Sachs had before him, a non-tenured professorship in Prague. Due to national disputes, the local university had just been split into a German and a Czech University. But Wieser was able to quickly settle into the small-scale structures of the Deutsche Universität, which only had 12 university lecturers and 572 students. In 1886 he married the daughter of a Prague architect. The marriage would remain childless.

4:25Wieser finally earned a tenured professorship with the publication of Die Naturliche Wirt, 1989 Natural Value In this work he applied the marginal utility theory not only horizontally, that is, to trading and exchange, but also vertically, that is, to production processes. He defined the value of higher order goods, productive goods, in light of the value of the consumer goods produced alongside them, thus developing his imputation theory. Mises, who possessed a certain obsession with compulsive computability, Mises recognized as one of the first economists to realize the information value of prices. His analysis of economic processes was soon considered a kind of standard model of the Austrian School. It was presented comprehensively for the first time in Theorie der gesellschaftlichen Wirtschaft 1914, Social Economics. Mises' notion of an economic equilibrium, which he conceived as an image of reality, ran distinctly counter to the principal ideas of Menger and and Boehm-Bawerk. Looking back to Wieser, Ludwig von Mises would later explain that without market activities the subjective valuations of the market participants could not be transformed

5:40into prices. In the 1890s, Wieser revealed a measured German nationalist position when he published several economic, historical and statistical analyses of the Crown Lands, Bohemia and Moravia. As president of the Deutsche Gesellschaft für Kunst und Literatur, German and Society for Art and Literature, he played an important role in the cultural life of Prague. He was even elected President of the Deutsche Universität Prague in 1901. Despite all of this, Wieser seized the longed-for chance of returning to the beloved homeland after Menger's withdrawal from his Viennese professorship. He participated actively in cultural life in Vienna too. His house in Döbling became a treasured meeting place for Artists, Politicians and Academics, De Bring is a former suburb of Vienna, incorporating it into the town in 1892. Even early on he had given composers like Hugo Wolff and Anton Bruckner considerable encouragement in their work. After the turn of the century, having written quite a few works on monetary theory, Mises turned more and more to sociological questions. In his Theorie der Gesellschaftlichen Wirtschaft, 1914, although remaining formally

6:56He nevertheless created an image of the individual which was more like a feeble caricature than a self-determining and rebellious actor, as described by Carl Menger. Mises saw people as thoroughly tamed creatures, even the sense of self is bred by the forces of society and is thus oriented in a way which is no longer purely personal. is thus nothing more than a selfishness of powerlessness. The First World War erupted only a few weeks after his Theorie was published. He was one of the very few Austrians to write several pieces that were moderate in tone, but nevertheless decidedly in favour of war. At the height of the war and transition economy, old Austrians experimented with central planning, the convinced statist Friedrich von Mises became a member of the Herrenhaus. In the three In the three last governments of 1917 to 1918, he held the office of Minister of Trade and for a while also the office of Minister of Public Works. The disintegration of the monarchy hit the staunch German-Austrian particularly hard.

8:07After retiring from his lecturing duties in 1922, Mises lived partly in seclusion in Vienna and partly in his summer residence in Brunnwinkel by the Wolfgangsee. Today Brunnwinkel is a Mises and Mises, a part of St. Girgen at the Lake Wolfgangsee in Salzburg, Austria. He put together his work on sociology and political science in his magnum opus Gesetz der Macht, 1926, the Law of Power. In a rather disjointed manner, according to Menzel, appraised differently by Morgenstern, he presented a medley of comments, clever observations and sociological and historical Analyses. On the other hand, Wieser here showed too many character traits of a nebulous mind. Anti-Semitic statements and an abstract Führerkult can also be found in the book, as well as sources indicating the contrary. Wieser was later labelled a fascist for this reason. Führerkult roughly translates as leader worship or literally leader cult. Wieser died in July 1926 at his summer residence after contracting pneumonia.

9:13During his time in Vienna alone, the sophisticated, cultivated teacher had educated an estimated 15,000 male law graduates and, starting in 1919, female law graduates as well in economics. Apart from this, he left no mark worth mentioning, neither as a minister nor as a sociologist. As doyen of the Austrian School, he paved the way for his replacement, Hans Mayer, who was, however, not capable of following in the steps of his great predecessor. As an economist, Mises built upon a strongly qualified subjectivism. His value calculation failed due to his notion of imputation. The following generations of the Vienna School would largely consider him not a part of their camp, but rather as belonging to the Lausanne School, which can be traced back to Léon