Mises in His Prime

0:00Welcome to our sixth lecture in the seminar on the lifetimes and work of Ludwig von Mises. We are dealing with an entire part now of the Mises biography with the title Mises and his Prime. This part covers the years 1920 to 1934. And so Mises was 39 years old and at the end of the period 53 years old. These are the prime years of a man's life, as I'm all the more inclined to believe, as I find myself in those years. Now, we cannot, of course, cover all the material that I cover in the biography. And what we'll do now in the next 90 minutes or so is to just speak a little bit about three main areas.

0:54First I'll talk about some crucial people that were important for Mises in those years. Then we'll talk about his intellectual contributions. And finally we'll talk about various other activities that show him as a public intellectual. Okay, so first people. That's of course in a way more interesting and entertaining than pure and great theory. And we have a selection of four or five or six persons. First of all, Frederic August von Hayek, who Mises met in the early 1920s. Then Fritz Machlop, the same thing, also a student at the University of Vienna in the early 1920s.

1:39Then we'll talk a little bit about the crucial impact and role of colleagues, such as Friedrich von Mises and Ottmar Spann, whose presence explains the limited impact that Mises had on the fourth generation of Austrian economists. Then we'll talk about his connections to the London School of Economics, in particular to Lionel Robbins and Theodore Gregory. And finally, we come to speak about his future wife, Margaret von Mises, whom he met in the mid-1920s. Mises met Hayek in the context of his work for the government.

2:25I told you already that he was running an office, the mission of which was to settle financial claims or financial obligations of German Austria as compared to other nations. So we'll talk a little bit about this office first and then come to speak about Hayek. During the war already, one of Mises' friends with whom he had set up the economics club by the name of Emil Perls had founded an office for the protection of Austrian assets abroad. The purpose of this office was to protect the private claims of the citizens of Austria-Hungary and to establish records of existing claims of these citizens on those of enemy countries.

3:12After the ratification of the Treaty of Saint Germain in the fall of 1920, the Austrian government transformed this organization into a new office by the name of Abrechnungsamt, a governmental bureau for claims settlements. Settlements. Perls remained the chief executive and several other men were also appointed to its board, Mises among them. The two comma secretaries, that is Mises and Perls, shared a predilection for efficient organization and kept the new office as small as possible. There was a German equivalent in Berlin which had more than 1,000 employees by 1922.

3:57Of course, as we know now from the modern theory of bureaucracy, it's a natural result. It's what you should expect. Bureaucrats trying to achieve ever greater competences because this gives you rise in your compensation and so on. So the Berliners behaved exactly as described by the economic theory which highlights the impact of economic incentives. In June of 1922, Peralds left the Bureau for a more prestigious appointment, and Mises succeeded him as the head. Two and a half years later, Mises quit the position too, ostensibly because his new position as a vice-director of the Kama, in 1922, he was appointed as the head of the Bureau. Two and a half years later, Mises quit the position too, ostensibly because his new position as a vice director of the Kama and his research agenda did not leave him enough time to shoulder the responsibilities of the office.

4:53His former employees praised him for using his contacts in industrial and banking circles for the successful floating of a bureau bond. Abrechnungsschuldverschreibung, which was used to finance the payments resulting from the settlement process. But the newspapers reported on conflicts between Mises and the finance ministry concerning payments of pre-war debts, which the ministry had delayed. So we can infer that the problem was that Mises had persuaded certain people to finance his government, and now the same government refused to pay them back. Mises wanted no part of such an organization. For Mises himself, the time spent at the Bureau for Acclaimed Settlements was especially memorable because it brought him in touch with a young student who would eventually become his most important intellectual ally and a friend for many years.

5:49By December 1921, Friedrich August von Hayek had received his first doctorate in law in Law when he applied for a position at the Bureau. Mises himself conducted the interview. Hayek presented a letter of recommendation from Friedrich von Mises, who praised him as a promising young economist. Mises smiled and said he had never seen Hayek in his lectures. But given Mises' letter, it would have been rude to reject the young man and so he hired him nevertheless. Nevertheless, Mises assigned Hayek to research money and banking theory and Hayek quickly showed himself a useful assistant, alerting Mises in particular to the case for free banking.

6:36More than any of his fellow students, Hayek was an adventurer. His peers, Habela and Voegelin, were anxious not to leave the well-chosen career route. They eventually left Jena to study in the United States when prestigious Rockefeller stipends became available for Austrian students in 1924. But Hayek was curious enough to travel to New York on his own, with no money and only his capacity and readiness for intellectual hard work. Mises encouraged and supported the project. Upon receiving his second doctorate, this time in economics, Hayek left for New York City in March 1923 and stayed until May 1924.

7:22He found employment as a translator for economics professor Jeremiah Jencks, whom he had met in Vienna in the spring of 1922. Later, Hayek also worked for Professor Wesley Mitchell at the National Bureau for Economic Research, collecting data for his book on business cycles. Mitchell was a great admirer of Mises and Hayek provided him with background information that Mitchell used in his preface for the American edition of Mises textbook. Hayek also talked to him about Mises. To Mitchell's mild astonishment, Hayek put Mises in the same class as Voltaire, Montesquieu, Tocqueville and John Stuart Mill. This must have been very astonishing because he had never heard about this Austrian economist.

8:15When Hayek returned to Vienna, he was thoroughly acquainted with American methods of business cycle research, knowledge that would prove to be highly useful two years later When Mises established an Austrian Institute for Business Cycle Research mainly to provide Hayek and others with suitable positions. We have a photo of Hayek in those years.

8:56Here he is, let me turn on some of these buttons, this does not work, maybe this one here, ah, okay, here he is, long and beautiful. and he was in fact a very handsome person and a tall man, so he was impressive as a person and this was always useful during the rest of his life. Now let's, we'll come to talk about Hayek later on, especially when we talk a little, we'll speak about the influence that Wieser had on the fourth generation of Austrian students.

9:49Let's go right away ahead and talk about Visa.

10:01The most important factor responsible for the absence of a school of Misesian economists in the 1920s, a school that came to exist in the 1950s and 1960s, In the 1920s it did not exist because Mises' professional standing was not paramount. When Hayek, Haberler, Machlub and Schütz first took part in one of his seminars, Mises was a respected expert on monetary economics and the author of a controversial book on contemporary political economy, namely socialism. Although he was one of the best known theorists in the German-speaking world, to his students he lacked the fame and brilliance of three other professors of the Department of Law and Government Science at the University of Vienna.

10:53These three others were Hans Kelsen, Mises schoolmate and professor of law, Carl Grünberg, Mises former professor, was still there, and Ottmar Spann. Carlsen was the celebrated creator of the Austrian Republican Constitution and pioneer of the pure theory of law. Grünberg was the chief Vienna intellectual of the social democratic movement and Spann, the author of the most successful social science textbook ever published in the German language. and that holds true until now. So his principal textbook had the title Der wahre Staat, the true state, and this made it actually into German colloquial language, so whenever we say something that's not really how it should be, and how it should be. We say, well, that's not the, that's is nicht der wahre Staat. That's not the true state.

11:55And so, Spann published, actually his publisher sold far more than 100,000 copies of this book until the early 1950s. I don't know how many editions, some 30 editions or so and he sold more than 100,000 copies. In 1919, Spann had obtained Filipovitch's position, which had been vacant for two years. Filipovitch had died during the war in 1917. Among the professors of economics, he attracted by far the greatest number of students. His theory of universalism, universalism is the catchword, was a sophisticated development of the older organic, and the so-called organic theories of society which were widespread and deep-rooted in Catholic countries such as Austria.

12:50In the crisis-torn years after the war, universalism was not only more accessible for most people, it also accommodated a deep longing for security and authority. Whereas Wieser and Mises dealt with relatively narrow economic subjects and the technicalities of the Austrian school's marginal value analysis, Spann confronted the students with a broad picture of social life. His lectures and seminars attracted students whose emotional life was steeped in Catholicism, romanticism, idealism and nationalism. Spann's best known student was the later Austrian Chancellor Engelbert Dolfus, but he also impressed young scholars of the Austrian School, such as Hayek and Morgenstern.

13:42Morgenstern was actually an assistant to Spann. He had far less success with his colleagues at the University of Vienna. of Vienna. Initially, he was invited to the sessions of the Economics Club, but it soon became obvious that a productive debate with members of the Austrian School, Wieser, Mises, Mayer, Weiss and Striegel, was impossible. This was not primarily a question of different political orientations. The main problem was that Spahn's intuitive approach was diametrically opposed to the analytical approach of the other members. Spahn believed the task of social theory was to grasp the meaning of totals, whereas the others thought that such undertakings were unscientific.

14:33The students who did not share Spahn's aesthetic, epistemological and political orientations, which were a minority, found a ready alternative in the classes of Friedrich von Wieser. In the years after World War I and up to his death in 1926, Wieser was the unquestioned authority in general economic theory in Vienna. With the winter semester of 1922, Wieser's devout disciple, Hans Mayer, succeeded his master, while Wieser himself continued to lecture as an honorary professor on the sociology of power. Because of Mayer's presence and the successful second edition of Wieser's textbook, the Wieserian paradigm reigned dominant in Vienna long after his death.

15:23Even Schumpeter was the number two Austrian economist after Mises. Mises was only number three. Even Schumpeter was not in the eyes of the profession the number one theorist in interwar Germany. That rank belonged to a Swedish economist by the name of Gustaf Kassel, whom we have already mentioned when we talked about the mathematician-turned-economist. Kassel's core mission was to promote Walrasian mathematical economics. His textbook quickly became the most widely used interwar textbook on economic theory and its success became international through translations in virtually all languages of the civilized world.

16:20Kassel was famous for his rejection of value theory and utility theory as a foundation of price theory. Wieser, Schumpeter and Kassel had one thing in common. All the three of them were verbal Walrasians. Their books championed the ideas of Walrasian economics without going into mathematical detail. Therefore, verbal presentation. Single-handedly, they not only kept the Valerian paradigm alive at a critical juncture of its history, but also managed, in what amounted to a revolution, to make it the dominant approach in economic theory within the German Reich.

17:08Within only one decade, they turned a large number of the younger German economists away from the historical school and converted them to the Lausanne School of Mathematical Economics. Through translations of their major books, this influence radiated far beyond the German speaking world. Now, this was only general economic theory, but even in the narrower fields of the theory of money, banking and business cycle, and of the theory of socialism, Mises was not the very highest authority. The great authority in monetary theory was, again, Friedrich von Mises, who had pioneered the Austrian theory of the value of money and would write the entry on money for the standard German language dictionary.

17:58Mises' endorsement of banking school principles and of the assignment theory of money was reinforced through the writings of Schumpeter, the other surviving pre-war authority on theoretical economics. Although Mises' views on money and business cycles found ever more advocates in the course of the 1920s, especially among the younger economists, he lacked the power and influence of the top academic economists. Those who sought to make a career as professional economists were well advised to immerse themselves in the thought of Wieser and Schumpeter, not in the writings of Mises. And that's exactly what the younger economists did. The fourth generation of the Austrian School was introduced to Austrian economics primarily through the works of Wieser.

18:50And this formative experience shaped their own approach to economic analysis long after the master's death. Today, Hayek is often considered Mises' most famous student. In fact, however, his Visarian intellectual heritage is striking. In 1922, 1923, under the direction of Hans Kelsen and Ottmar Spann, Hayek had written his doctoral dissertation in economics on the theory of imputation. The work was based on the Viserian approach to problems of value and price theory, which as we have seen is incompatible with the Mises approach to socialist calculation. When Hayek updated his thesis three years later for an article in Konrads Jahrbücher, he knew Mises' calculation thesis, but he had not changed his mind on the question of amputation.

19:49Imputation means to explain the value of a factor of production. The factor of production must be valuable because it helps to produce a valuable product, which is truly cherished by a consumer. Therefore, value imputation means to say, well, the value of the factor of production is dependent on the value of the product. The question is, can you impute the value of the product back onto the value of the factor of production? According to Mises, this is possible because value is conceived to be an extended something. So you can impute this back onto the factor of production. According to Mises, it is not possible because value is just a preference relationship.

20:37So you cannot impute value onto factors of production, but you can only impute prices back onto factors of production. And Mises says you calculate always in prices, not in terms of value. The complement in the field of imputation theory is you can only impute prices, not value. is not value. Now Hayek held the opposite. Hayek defended the Vizierian position. All the while he knew he was acquainted by now fully with Mises' position. This is what Hayek wrote on the topic without mentioning Mises, without quoting Mises by name. He says the following, Of course, in so far as one believes that a completely satisfactory solution to the problem of imputation has not yet been found, we cannot exclude the possibility from the very outset that the determinants of the prices of the factors of production are to be found in the exchange economy alone, that's Mises' thesis, and therefore that an imputation of value is not applicable, a view held by several younger authors.

21:50Nevertheless, if this view were regarded as valid, the result would be that we would have no satisfactory explanation of economic processes based on the subjective theory of value. And it would also follow that these authors too would lack any basis for many of their investigations. So, what Hayek says is, well, he doesn't say Mises is wrong. He says, well, if this is true, then subjective value theory no longer applies to most things. Well, that's of course true. Hayek went on to explain and develop Visarian imputation theory, which in his view was still today the fundamental and most detailed treatment of the problem. Hayek explicitly rejected Mises' argument because it contradicted the Vizierian assumption that all social phenomena are explicable on the basis of value theory alone.

22:49This fact is crucial to understanding the later stages of the debate on economic calculation under socialism. Although Hayek entered the debate ostensibly on Mises' side, there was a profound disagreement between the two. They were on the same side as far as the political implications are concerned and not on the same side as far as the analytics were concerned. Mises rejected socialism because factors of production could only be appraised in a market economy. Hayek did not endorse this argument because it contradicted the fundamental framework of his Visarian economic thought. His own opposition to socialism was not yet formulated, but the paper on imputation theory, a 1925 paper, already indicated the future cause of the argument. Hayek's main criticism of Boehm-Bawerk's imputation theory was that the latter treated the value of future consumer goods as ultimate givens, where in fact they depended on present choices about the use of factors of production. According to Hayek, only a general equilibrium model could account for these multifarious interdependencies and solve the intricacies of the

24:09imputation problem. Hayek concluded his 1925 paper mentioning that the The Walrassian School of Mathematical Economics had already successfully tackled problems of a similar nature. But he cautioned against practical problems of applying mathematical imputation theories. Although they could possibly demonstrate by means of a simplified case that the subjective theory of value is in principle applicable, The complexity of the problem may make it impossible in practice to apply imputation to any large economic system." Now this is exactly the line of argument that Hayek later stressed in the 1930s in his critique of socialism.

25:00It was just a more detailed exposition of an argument that was already there in 1925. As a Viserian value theorist, Hayek could not endorse Mises' argument that a rational socialist economy was impossible, because there was no such thing as value imputation. What then were the real reasons for the empirically far better performance of market economies? The solution that Hayek eventually presented in the late 1930s and the 1940s was based on an argument that was already prominent with some writers of the 18th and 19th centuries. These writers had argued that prices contain information about market conditions, shortages, surpluses, and that they steer production in a market economy.

25:51Hayek embedded this argument within a general theory of knowledge, explaining the role of information in human action and economic theory, and argued that market prices have crucial importance in transmitting information between the market participants. Hence, the factual superiority of the market economies over centrally planned economies resulted from their communicative superiority. Market prices were a better means of transmitting information. The seeds of these later theories were sown in the early 1920s. That's the fundamental fact.

26:41Hayek's liberalism came from Mises, but the analytical framework of his economic thought was nurtured through the books and classes of Wieser. It was no accident that Hayek became the editor of a posthumous collection of Wieser's most important papers, and that he published his first book with Hölder Pichlatemsky, which had published all of Wieser's pioneering studies. All of his life Hayek perceived himself quite consciously as a member of the Wieserian branch of the Austrian School. In 1978, a few years after Mises had died, Hayek regretted that this Wieserian branch had been almost entirely displaced by what he called the Mises School.

27:29I quote now from an introduction that Hayek wrote to Mises, the original manuscript of Mises' notes and recollections, so his autobiographical recollections in German. So here Hayek says, in today's world, Mises and his disciples are with some justice regarded as representatives of the Austrian School, albeit he represents only one of the branches into which Menger's teaching had split already among his disciples, the close personal friends and relatives Eugen von Boehm-Bawerk and Friedrich von Wieser. I admit this only with some hesitation because I expected much to come from Wieser's tradition with his successor, Hans Meyer, which his successor, Hans Meyer, tried to develop.

28:27But these expectations have so far not been fulfilled even though that tradition may yet prove to be more fruitful than it has been hitherto the case. The Austrian School that today is active almost exclusively in the United States is basically a Mises School that goes back to Boehm-Bawerk's approach. By contrast, the man on whom Mises put such great hopes and who had taken over his chair, Maier, has never made good on the promises. A year after Mises' death, 1973, Mises dies, 1974, Hayek received the Nobel Prize. Nice picture here, the young king of Sweden, and so the prize. Attracting new interest to his work and giving the Viserian paradigm a second lease of life.

29:26That's the significance of Hayek's Nobel Prize. In the early 1970s there was no Viserian paradigm left. The Austrian School to the extent that it existed was a Mises School and Hayek then resuscitates the Viserian paradigm. The new Viserians have been with us ever since. ever since. And the confusions and the debates that have resulted in the 1980s and 1990s over economic calculation and similar problems, epistemology, are in fact children, intellectual children, intellectual offspring of the same debates that had been led in the 1920s and 1930s between the two branches of Austrian economics.

30:18Now we come to Fritz Machlub, who was the student on whom Mises apparently had the most profound impact in the early 1920s.

30:48Here we have him, Happy Fritz. Of all the later star members of Mises' private seminar, Machlub alone had received his doctorate under Mises Direction, and Hayek was a Viserier, and his doctoral degree under Spann and Kelsen. Machlub came from a family of entrepreneurs. His father was a cardboard manufacturer and young Fritz helped him in the management of the firm while he studied economics at the University of Vienna.

31:34In 1923, he was involved in setting up a factory for the family business in Hungary, even while he was working on a doctoral dissertation under Mises. Now, that's energy. At the end of the year, the factory was running and Machloub had his doctorate. He was admitted to the private seminar of Mises and his relationship with the master became less formal. Like his mentor, Machlub was an enthusiastic skier and fencer, and they probably spent many hours together in the gym and in the mountains. Their common Jewish heritage was certainly an important factor in their unusually cordial report. In the 1930s, Roe to Machlub in the tone of true friendship, while in his correspondence with other intellectual associates, Hayek for example, there always remained a hint of formality.

32:28Being Jewish was also the most important factor hampering both academic careers. Starting around 1922, German nationalists and Catholic groups led a campaign to reduce the Jewish presence at the universities. Mises had been appointed adjunct professor under the ancient regime. In the New Republic he made no further advances, neither did his disciple. Machlub received his doctorate and that was it. This situation must have created a mutual sympathy between the two men. Bad as it was, it could not prevent the dynamic Machlub from a successful career outside the university system. A few years later he became a member of the Austrian Cardboard, CARTL, and was also appointed secretary of the Verein Österreichischer Volkswörter, the Association of Austrian Political Economists.

33:23and Economists. Machlub was a man of great ambition and of great talents. The drive of the successful entrepreneur never left him even in later years when he moved to the United States and focused entirely on scholarly pursuits. A poem that Kenneth Boulding, famous Keynesian, composed many years later in his honor testified to the fact. That's how, this is what Boulding wrote. Oh, happy is the man who sits beside or at the feet of Fritz, whose thoughts, as charming as profound, travel beyond the speeds of sound, all passing as he speeds them up, mark one, mark one, mark three, mark lup, or mark lop, with what astonishment one sees a supersonic Viennese, whose wit and vigor, it appears, are undiminished by the years.

34:20That's very nice. Mark Loeb wrote his doctoral dissertation on the gold bullion standard. He published the work as a book in 1925 for the appendix of which he also translated Ricardo's Proposals for an Economical and Secure Currency. Six years later, he published a study on the role of bank credit and the stock market in the business cycle. Both books demonstrated that their author had very well assimilated the Misesian approach to monetary analysis, and both of them were brilliant contributions extending the work of his teacher. I said already that Mises called in particular the second book a masterpiece. But it was shortly after his publication that the friendship between the two men became strained, With time strained, Machlop emigrated to the United States and adjusted perhaps a little bit too readily to his new intellectual environment.

35:17The low point was reached in the 1960s when Machlop started agitating against the gold standard. For several years his old teacher refused to speak to him. The efforts of Mrs. Mises eventually produced a rapprochement, but the old friendship was gone. Okay, so we mentioned Mises from Mises, so it's now time to talk about Margit from Mises. Who Mises met, that's an important person in his life. Mises met in 1925 as one of six guests at a dinner party.

36:02Dinner party was held by Felix Kaufmann, a young lawyer and member of Mises' private seminar. It is almost a miracle that Mises won the heart of the ladies sitting next to him, for he spent most of the meal discussing economics. On the other hand, his preoccupation gave her the opportunity to observe him. It's also a good thing. Okay, let's now see a photo. This is Margaret. This is not in 1925, but just a few years earlier. This must be the late 1910s.

36:49So can you believe this? So he sits there and talks economics. There's this lady sitting next to him. This is what she sees. Not bad. So we can forgive her. We can understand that she forgave him his rudeness. So this is how she perceived him. What impressed me was his beautiful clear blue eyes, always concentrated on the person to whom he talked, never shifting away. His dark hair, already a little grayish at the sides, was parted, not one hair out of place.

37:42I liked his hands, his long slim fingers, which clearly showed that he did not use them for manual work. He was dressed with quite elegance. A dark custom-made suit, like this one, a fitting silk necktie, like this one. His posture indicated that he must have been a former military officer. So after all there are some benefits that we see from military training. So maybe we should just have an army to educate young men and never use them and never give them weapons, just have them walk around and obey orders and so on, shape up.

38:34and shape up. Mises talked to her after dinner and they went to a dance club. Apparently, Mises was a poor dancer, at least by Margit's standards, and so they spent most of the night talking. Actually, she did most of the talking and he listened attentively. Margit was an attractive woman of 5 foot 4 or 160 with brown hair and gray blue eyes. Now as they talked he discovered that she was also a witty and warm person. He must have fallen in love with her that evening. The next day he sent her red roses and asked her out for dinner. quite a stormy approach. It was the first of many such dinners over the next two years. Margit Cereni, that was her name, was an actress from a bourgeois background in Hamburg. During the war she had performed on one of the leading stages in Vienna, the Deutsche Volkstheater. When Mises met her she was 35 years old and a very attractive widow with two children, Guido, imagine that,

39:44and Gitta. Shortly after her arrival in Vienna in early 1917, she had married Ferdinand Czerny, a Hungarian aristocrat who died in 1923, bequeathing her assets that had lost most of their value during the inflation. Now that's also, this is a caricature, it's a cliché, right? You marry this Hungarian aristocrat and then he leaves you, of course you lost all of his money, this time not in gambling but Characteristically, Mises was cautious, even when his feelings might have threatened to overwhelm him. Could he trust an actress? As Margit later pointed out, most people in polite society considered actresses to be high-class call girls.

40:41Ludwig seems to have shared this prejudice. At any rate, he took precautions. As he later confessed to his wife, probably on his knees, he had checked some of her statements about her professional development by consulting the records in the archives of the leading local newspaper, Neue Freie Presse. He probably also talked to his cousin, Rudolf Striesova, who had been Ferdinand Serrini's physician. These investigations confirmed Margit's version of things. But there were more fundamental obstacles that hampered the development of the Romans. On the one hand, Ludwig's mother Adele had great reservations about Margit.

41:30Actually, none of his girlfriends had ever met with her approval. She must have imagined a very different sort of wife for her beloved son and her opinion had a great weight for Ludwig, especially since he held certain philosophical views that would have deterred him from marriage anyway. These views concerned the nature of marriage and the possibility of being both a husband and a scholar. I'll quote for you a thoroughly unromantic passage from socialism, from Mises' book socialism. Mises, as a social institution, marriage is an adjustment of the individual to the social order by which a certain field of activity with all its tasks and requirements is assigned to him.

42:21Exceptional natures, whose abilities lift them far above the average, cannot support the coercion, which such an adjustment to the way of life of the masses must involve. The man who feels within himself the urge to devise and achieve great things, who is prepared to sacrifice his life rather than be false to his mission, will not stifle his urge for the sake of a wife and children. In the life of a genius, however loving, the woman and whatever goes with her, occupy a small place.

43:07We do not speak here of those great men in whom sex was completely sublimated and turned into other channels, Kant for example, or of those whose fiery spirit insatiable in the pursuit of love could not acquiesce in the inevitable disappointments of married life and hurried with restless urge from one passion to another. Even the man of genius whose married life seems to take a normal course, whose attitude to sex does not differ from that of other people, of other people cannot in the long run feel himself bound by marriage without violating his own self. I wonder what the empirical evidence for this was.

43:53Genius does not allow itself to be hindered by any consideration for the comfort of his fellows, even of those closest to it. The ties of marriage become intolerable bonds which the genius tries to cast off, or at least to loosen so as to be able to move freely. The married couple must walk side by side amid the rank and file of humanity, mass people. Whoever wishes to go his own way must break away from it. Rarely indeed is he granted the happiness of finding a woman willing and able to go with him on his solitary path." This passage survived all editions of the book. Ludwig was slow to allow Margit onto his hitherto solitary path, but on the other hand he was longing for the love of the true companion. Margit later surmised that a deep-seated dissatisfaction with his entirely public life was the true cause of his infamous The most terrible outbursts he reserved for the woman he loved.

45:10Now comes a quote from Margret. His temper was as astonishing as it was frightening. Occasionally he showed terrible outbursts of tantrums. I do not really know what else to call them. Suddenly his temper would flare up, mostly about a small unimportant happening. He would lose control of himself, start to shout and say things which coming from him were so unexpected, So unbelievable that when it happened the first few times, I was frightened to death. Whatever I said would enrage him even more. It was impossible to reason with him. End of quote. A few years of married life, however, and he became much more reasonable and slow to anger. So this is the beginning of their relationship. We have a couple of more photos here.

46:00This is Margaret in the early 40s and that's when they were already married, and we have this here too, happy couple. Okay, so these were persons, now we've already quite advanced in time already, but nevertheless we'll try to get as far as possible and talk now a little bit about Mises intellectual contributions in this period, 1920 to 1934. We have indeed several major contributions that we can talk about. In particular, I should raise four points. The first one is that Mises created a system of political philosophy.

46:48The second one, he refined his business cycle theory. The third one, he reconsidered the theory of value. And fourth, he developed a new epistemology of the social sciences and of economics in particular. All this falls within this period. Now, in the early 1920s, after he published his treatise on socialism, Mises had won clarity, at least for himself, on two great systems of social organization, namely capitalism on the one hand and socialism on the other hand. Both systems are characterized by clear property rights. In capitalism we have private property and in socialism we just have public property.

47:38All property is in the hands of the government. Now Mises perceived that there was just one third possibility, namely that you had partial violations of property rights through a system of interventions. So if he could fully analyze this third type of social interaction, he would have completed the analysis of all possible types of social organization. So he distinguishes three great forms of social organizations or types, capitalism, socialism and interventionism. What he does then in the 1920s, he starts off, develops a systematic analysis of interventionism and thereby develops a fully exhaustive political philosophy based on economics, based on utilitarian considerations.

48:40Because the crucial question that Mises asked for each of these systems is, does it work? He understands each of these systems as a means that can be used to attain an end. And for Mises, the universal end that human beings try to achieve through organization, through cooperation, is to improve the material well-being. Wellbeing, of course there are other ends as well, but social organization, economic organization only concerns this end, improvement of one's material situation. So the question is then, and it's a question that we can ask for each of these different systems of social organization, is it suitable to attain this end?

49:25Does it actually help increase production? Does it actually help increase the material well-being of the members of society? Now in capitalism, this was clearly the case, as Carl Menger had shown, and Boehm-Bawerk in particular. And in the case of socialism, Mises had just delivered the proof that it was not the case. Socialism was necessarily less efficient than capitalism because it could not rely on economic calculation. Therefore, socialism from a utilitarian point of view is an unsuitable means to attain the end of improving one's material situation.

50:11Now what about interventionism? Interventionism is, as Mises defines it, a punctual order or command issued by the government to private owners according to which they should use their property in a different way than the one they would have chosen spontaneously. So in other words, Mises doesn't exactly frame it this way, but that's what it boils down to. In other words, the government turns itself here into an unwanted co-owner of the individual owners, the private owners. He commands them to say, okay, you may use your property, if you want to hire people, for example, you may hire them, but only at this and that wage rate.

51:02So this unwanted co-ownership, insofar as I want to pursue this activity, I'm bound to obey the commands of the government. Otherwise I'm in conflict with the law, so I can be put into prison. Now the consequence is that people try to evade this law. If the cause of action prescribed by government does not suit them, and they still have the liberty, The Liberty is still not full government ownership of all the factors of production. Well, then these owners can use them in some other branch rather than hiring people. They may be just consuming their capital or they may use their capital to do something else with it. And as a consequence, therefore, interventionism is an inefficient type of social organization too.

51:55This is according to Mises the most inefficient of all because in socialism at least you do not have this problem of evasion. The people actually produce the opposite of what they plan to do. Now what Mises does here is to develop an analytical approach that consists essentially in comparing different types of social organization. fundamentally compares the operation of a system based on private property, individual private property, to a system based on public property and to a system based on violations of property.

52:52So the comparison is framed in terms of property rights. This contrasts sharply with how policy issues are analyzed in our days and came to be analyzed in the days of Mises. Let me give you the following example. What all students learn today in microeconomics classes are the detrimental effects of monopolies. and the demonstration goes as follows, we present an ideal economy that we call an economy in the state of perfect competition or pure competition and in this economy, this economy is characterized by a perfectly elastic demand curve for the commodity in question and by a perfect divisibility of the factors of production and so on and so on, so that in this case marginal costs always coincide with the price at which the good is being sold.

53:58Then we compare this situation to a case of monopoly. This situation is called monopoly because the demand curve is sloping downward. It's not horizontal, it has a slope. And in this case if the slope is sufficiently steep, We necessarily get a situation in which prices do not coincide with marginal cost. It cannot possibly be in such a case. And as a consequence therefore, the argument goes, in situations that are not pure competition or perfectly competitive markets, the good is sold as a price that is too high.

54:44It's no longer sold at marginal cost, but at a level superior to marginal cost, and that's inefficient, that's bad. Now, don't need to get all the details of this, but what I want to underline here is that the terms of comparison to address policy issues have radically changed. In Mises' approach, which was by and large also the approach of the classical economist, we also have a comparison. We compare the operation of a market economy, which is defined by the respect of private property rights, to another system in which property rights are not perfectly respected. This is the term of comparison that we perform. And this comparison is, of course, fully realistic, because there are empirically and practically only these two possibilities.

55:34Either you respect property rights or you do not. So, you have this alternative that fully corresponds to the practical issues. But according to the neoclassical approach, the terms of comparison, so the policy issues are still addressed in a comparison, but the terms of the comparison have completely changed. Now, it's hypothetical, we might even say fictional model, that is our point of departure. And we compare to this fictional model now the really operating market economy, because the situation which the demand curve is fully horizontal is fictional, it can never exist in reality, whereas all really existing demand curves are downward sloping to the right.

56:27So the monopolistic model according to neoclassical theory is in fact representative of all situations that we find in the real world. So what the neoclassical approach consists in is to compare the real world to an unrealizable completely fictional birth brainchild model of the economy. So the intellectual procedure is to say that first I set up my ideal standard, which is a brainchild that I just cook out of my fantasy. And then I say compare the real world to it and I find they are different. And then I say well, all the worse for the real world. Now the real world should be brought into greater conformity with the model. Because the model is the ideal, without any explanation, that's the ideal.

57:15So the significance of Mises' contribution is a clarification of that kind of policy analysis or the approach underlying the policy analysis that we find already in the classical economists and that he now puts forward in great clarity. This approach was streamrolled in the following decades by the emerging new neoclassical approach that we have just described. So Mises was the last one to resist and was then neglected except by the succeeding Austrian economists.

58:08Mises added several further clarifications also to his analysis of socialism. We might mention here two points, there are more points to be made but I will just mention two points. First of all, he insisted that for the inefficiency of socialism, it is completely irrelevant what the specific agenda of the state might be. Of course, when we think of socialism, we have in mind a system in which people have a more or less egalitarian orientation. All people should be equal and so on.

58:53and so on. But as Mises pointed out, this is from an economic point of view a secondary consideration. The economic definition of socialism is an economic system in which there is just one owner of all factors of production, common ownership of all factors of production. It does not matter for Mises' demonstration to what purpose this common ownership is used. The government might choose to pursue an egalitarian agenda, speak for example of Bolshevik socialism, but it might also pursue an authoritarian, unegalitarian agenda. Might try to promote the destiny of the master race, right, and use the common property for this purpose and fight whatever, all underlings and so on.

59:50So in this case we would have some type of national socialism or Nazi variant of socialism. So the agenda is not, the ends of economic policy are not at all important. The economic argument and the economic analysis that Mises developed turns around the means. The means necessarily has these consequences, irrespective of the intentions of the politicians. A second clarification that he brings up concerns the issue of individualism and collectivism. Before Mises, just before he published his treatise on socialism, a few authors had stressed that liberalism was the social philosophy of individualism, whereas socialism in all its varying forms is the social philosophy of collectivism.

1:00:47Statism is the social philosophy of collectivism. Now Mises does not at all agree with this. He says that's the wrong issue. It is, socialism is an inefficient system of social organization, both from the point of view of the collective and from the point of view of the individual. And he had developed this point already in previous studies that I did not mention. So as from 1916 onward, approximately, he makes this point. Even the social aggregate as a whole is not improved through government interventionism or through a system of common ownership. So whatever point of view we take, whether it's the point of view of the collective as a whole or the point of view of individual members, socialism and interventionism are inefficient.

1:01:44So the crucial issue is, does it work or does it not work? Crucial issue is not individualism or collectivism. Okay, then I said we come to the second point, and here Mises refines his business cycle theory. There are three points that he adds, most notably in a 1928 book publication, Monetary Stabilization and Cyclical Policy, that's the English translation, Geldwertstabilisierung und Konjunkturpolitik is the German title. So he makes three points. First of all, he develops a critique of Irving Fischer's theory of the stabilization of the purchasing power of money.

1:02:34Second, he develops a theory of the recurrence of the cycle. And third, he stresses the importance of free banking. Let's go through these points again in a little bit more detail. So according to Irving Fisher, monetary stabilization was necessary to improve the efficiency of the operation of the market economy. And that is because variations in the purchasing power of money modify, so to say, the measuring rod in terms of which the entrepreneurs perform their economic calculations. It's like saying I want to measure the distances within a room or on streets and so on and in the course of this measuring process I change the length of the meter.

1:03:26Then of course it cannot work, that's about the argument. Now what Mises says is that this analogy does not at all hold in the case of monetary calculation. It is not important that the purchasing power of the monetary unit be stable in order to make efficient or correct economic calculations. And the reason is that the purpose of economic calculation is to compare action alternatives. Should I do A or should I do B? Now it's easy to see that whatever the modification of the purchasing power of money through time, my calculation can be fully correct.

1:04:13Let's assume the purchasing power of money decreases in the course of time, so future prices will be higher than they would otherwise have been. Now this will have a repercussion both on the project A and on project B, so my calculus can still be correct and the same thing holds of course also true for the case in which the purchasing power of money increases and to the case in which it remains stable. What counts in all cases is the comparison. It's not the absolute, we do not try in economic calculation to assess the absolute value, whatever this might be, the absolute value of a capital asset. We want to make a way for a decision.

1:05:01We want to decide ourselves, should we do A or should we do B? So Fisher is wrong on this. In this, an economy can operate efficiently whatever the purchasing power of money is, whether it's stable or unstable throughout time. It does not a priori affect the exactitude of economic calculation. Moreover, Fisher is wrong in identifying the main negative impact of, redistributive impact of money. Fisher sees this redistribution impact in the relation between debtors and creditors.

1:05:46So if the purchasing power of money increases, that is if prices go down, well then creditors would be benefited according to Fisher and debtors would lose. Debtors would now pay back in terms of money that has a higher purchasing power than before, Whereas creditors would get money that has a higher purchasing power than before. So creditors win, debtors lose. Now it's easy to see that the story is not as easy as that. It's not necessarily the case that in this case creditors win and debtors lose because all depends on the exactitude of anticipations. If the decline of the purchasing power or the increase of the purchasing power of money has been anticipated, Well, then both parties fully get what they expected. There's no winner and no loser.

1:06:36So if we have a declining purchasing power of money, it's not necessarily the debtor that wins. It might actually be the creditor that wins. And inversely, if we have an increasing purchasing power of money, it's not necessarily the creditor that wins. It could also be the debtor that wins. All depends on the initial assumptions, initial expectations. But there is a redistribution effect that does not depend on the quality of expectations and these are the Cantillon effects that Mises had already discussed in his theory of money and credit. And Irving Fischer, as he points out, completely neglects this point, completely fails to get into the picture, the main redistributive impact of money.

1:07:23Second, Mises, as I said, develops a theory of the recurrence of the cycle. What he had done in his theory of money and credit was to explain the causal mechanisms at stake in a boom bust sequence. What is the cause that brings about an economy-wide error among the entrepreneurs and how does this error necessarily entail a bust? How does it necessarily come to an economic crisis? That's what he explained in The Theory of Money and Credit. Then in this 1928 book, he explained how it came to a recurrence of booms and busts, why there was a succession of one boom bust cycle after another.

1:08:10And he said, well, there's a common cause underlying all these boom bust sequences, namely the intention of businessmen and politicians and bankers to decrease the interest rate below the level it would have reached on the free market. And they want to do this through extensions of the money supply. And if they succeed actually in decreasing the interest rate below the market, well, then you get a Boehm-Bass sequence and next time since we haven't learned anything, you do it again, you get another Boehm-Bass sequence and so on and so on. Third, he now stresses the case for free banking as an alternative monetary system to the prevailing one, which is based on interventions by the government and by central banks.

1:09:00Again, I said at the beginning of my talk this afternoon that one of his inspirations for this was the research done by Friedrich von Hayek. Mises was aware of this debate, but Hayek and his youthful enthusiasm must have brought up this subject again and again in discussions with Mises and he certainly pressed his case and this came to be reflected in the 1928 book. Here Mises stresses not only the legitimacy but also the great utility that free banking would have in solving these problems. The boom-buzz sequence or the business cycle could be avoided in a system of free banking.

1:09:45The third intellectual contribution that Mises makes is the reconsideration of the theory of value. We've already talked a little bit about this. For those of you who are interested in this, read the recommended reading for this lecture. This is an introduction that I wrote a few years ago for a new edition of Mises' book Epistemological Problems of Economics. There I go into some detail explaining these things. Here I only say very briefly that Mises came to realize the deficiencies of his explanations in the early 1920s. And when he had discussed the socialist calculation argument, he came to realize the importance of clarifying the difference between price and value, the possibility of calculating with value, the only possibility of calculating with prices.

1:10:40And that's what he did now in order to set the record straight. He now published a series of articles on the theory of value in which he stressed this fact. I stress this fact, stress the fact that value is a preference relationship between different choice alternatives. It's not an extended quantity that could be used for calculations or for imputations and so on. And in particular, he did something that he never did again in any of his writings, never did before also, That is, he criticized Menger and Boehm-Bawerk. He criticized the value theories of Menger and Boehm-Bawerk, showing exactly where they went wrong.

1:11:25The fourth intellectual contribution that Mises made in those years was the development of a new epistemology for the social sciences and for economics in particular. And up to the present day, this has been one of the most contested elements of Misesian economics. What sets the Austrian economists apart, let's say the Misesian branch, apart today from all other schools of thought, is the insistence that economic laws are a priori laws, they hold true a priori. Now this seems to be quite removed from his earlier concerns about empirically verifiable facts and so on, his sympathy with the empirical theory of Carl Menger and so on, so how does Mises come to talk about this a priori stuff? Well actually there's no jump here at all, there's only a clarification.

1:12:24What Mises did was not to understand the word a priori in the sense of something detached from reality, but in the sense of concerning a reality that is not accessible to the human sense organs, that is eyes, ears, noses, hands and so on. and so on. There is this reality, for example, the fact of choice. We are able to make choices. It is a fact. If we do not accept, we may deny this and so on, but then, of course, all of human life would become quite senseless. Now the crucial consideration here is that human choice cannot be grasped with our sense organs.

1:13:16We know that there is choice, but we do not know it because we can observe it, because we can hear it, because we can touch it and so on. So there is a layer of reality that is relevant for economics, in effect fundamental for economics. How can we talk about economics if we do not start from choice? We do not acknowledge the fact that human beings make choices. But this layer of reality cannot be accessed with our senses. It must be accessed through inner experience or reflective meditation or whatever you call it. It's unimportant how we call this. And that's his only point. In order to understand observable things, movements of the human body through space and time, for example, we need to bring in this element that we know of not through our observations. It's a difference. I see somebody coming into the room.

1:14:14If I did not know that human beings make choices, well, I would say, well, this, some of this body was kicked in, and then he flurred through the room and then ended up on one of these seats, okay. It's only because I know also that there's this element of choice I can say well this person, it's not just a body, it is a person made a choice, came in and opened the door, closed the door, he closed the door and moved then to a place and sat down, he made choices. Now, the fact that he makes choices is not something that I observe, but it is an empirically verifiable element, nevertheless. So, that's ultimately what Mises stressed in his works dedicated to the epistemology of economics in the late 1920s, starting with an article titled Sociology and History and culminating in the first chapter of his 1933 book Basic Problems of Economics translated as Epistemological Problems of Economics.

1:15:22Here, so he stresses this fact, the theorems of economics are a priori, that is, they cannot be refuted or verified by the methods that we use in observation-based sciences. They can only be refuted or verified by reference to those facts that we know through reflective meditation on what it means to act, making choices, using means to attain ends. How can we ever observe an end? It's not possible. So, in a way then, that's the conclusion that we can make on this point is that Mises did not put into question the epistemology of Carl Menger and his earlier concern for empirical solid empirical foundations of economic analysis rather he tried to clarify the epistemological nature of these economic laws and it is very revealing that he did this only after studying economic theory for some 25 years came across economic theory by reading Carl Menger in 1903, and then he did not start off like Schumpeter writing first the treatise on epistemology, with some a priori scheme of how economics should be done,

1:16:53I mean there's still some people today who are proceeding this way, how economics should be done and then squeezes reality into this mold, but he first studied economics case by case, acquainted fully, himself fully with it, developed it, developed it, and then he tried to clarify, well, what am I actually doing? What kind of facts am I referring to? What is their epistemological nature? How do I come to know about them? And he finds, and certainly something that must have been difficult for him at first to acknowledge, well, he finds, well, it's not through observation that I come to know them. That's something else. And this layer of reality that exists independent of observation is therefore a priori relative to observation. I cannot make sense out of any observations if I do not bring in this element that I know out of other grounds. Okay, time is running out, so I come to talk Let's talk very briefly about his other activities.

1:18:10Mises was, I mentioned here briefly five activities. So first of all, Mises was involved in the introduction of the gold exchange standard in Austria. The gold exchange in Austria was as from World War I on a paper standard. The Kroner was turned from a substitute for gold into a paper money, the Kroner paper money. And so it remained until January 1st 1925. And on that day Austria introduced a new currency, namely the Schilling, which it had until very recently when the Euro was introduced. And the Schilling was introduced as a substitute for gold. At the same time, Austria went back onto the gold standard. Now I spare you the differences between the gold standard and the gold exchange standard and so on.

1:19:02What is interesting for us here are two facts. First of all, little Austria precedes in this movement Great Britain, which introduces the gold standard only four months later. And so in the second half of the 1920s we see the creation of an international gold exchange standard throughout the western world And little Austria was among the first movers and then come the other countries Second fact that is interesting here is that Mises was a central figure in this movement and the creation of the new currency and the creation of the reintroduction of the gold money just as Carl Menger had been in 1892. At the time the kroner was introduced as a substitute for gold and displaced the golden which was a paper money circulating until then.

1:20:05So just as we have two Austrian economists who did the same thing, Carl Menger in 1892 and then Ludwig von Mises in 1925. Second activity that is important, Mises gets in touch with the Rockefeller Foundation. Rockefeller Foundation had been established after 1916. I won't ask you about 1916, but that's the year when the income tax was introduced in the US. And one of the ways out of paying income taxes was to set up foundations for general social purposes. So some of the big money men of the time set up their own foundations to avoid taxation.

1:20:51And one of them was the Rockefeller Foundation. The Rockefeller Foundation then came to play a very important role in the financing of science, and especially the social sciences in the interwar period and after World War II. The Rockefeller Foundation of course was primarily active in the Anglo-Saxon countries, but also financed institutions and individuals in the form of scholarships in Central European countries. So it gave scholarships for young Austrian economists and it relied in their attribution of these funds on local scholars. The main man here was Friedrich von Mises until 1926 and in 1926 Mises dies.

1:21:38And it so happens that just in this year Mises made a trip to the US. Believe it or not, there was no causal relationship here. Mises did not die because Mises traveled to the U.S., at least that's what I suppose, right? There's no decisive proof. Oh, this Mises! So that's Mises in 1926. You see what a year of acquaintance a woman can do to a man.

1:22:23And he travels there on a mission for the Chamber of Commerce. They are representative at the meetings of the International Chamber of Commerce and he uses the trip also to meet other economists and give talks and listen to talks and also meets the people from the Rockefeller Foundation. And so they find him sympathetic and reliable and he becomes thereafter their main authority, main referee when it comes to allocating scholarships to young people from Vienna. Then Mises creates, when he returns to Vienna, he creates the Institute for Business Cycle Research, Institut für Konjunkturforschung, Modeled on similar institutions that the Rockefeller Foundation had helped set up in the previous years in Germany and other countries.

1:23:22The first institution of the sort was the Harvard Department for Business Cycle Research set up in 1919. And then came the National Bureau of Economic Research 1921 with Michel. Then we have LSE, we have similar institutes in Berlin, Hamburg, Kiel, Essen, Frankfurt and then finally Vienna. So there is Rockefeller money involved here too. Not much maybe, at least far not as much as in London, but some money is involved which certainly helped. And as I said before, the Mises idea is to provide here an outlet for young promising economists such as Hayek, because it was very difficult to get such people a position at the university.

1:24:14Now there is a full paid job which allows them to pursue scholarly interests. The Institute publishes a monthly newsletter and also after three years sets out publishing a book series, a monograph series, and in all the great contributions of the younger economists in those years, younger Austrian economists were published in the series. Hayek's first two books on monetary Policy and then Prices and Production, Striegel's book, Machlup's book and so on. Enthe and Mises takes part in the activity, well, is commissioned by the government to analyze the causes of the Great Depression in Austria, The Causes of the Economic Crisis in Austria.

1:25:13That's an official report that is now published under his name. It's an anonymous writing committee with one labor union representative, one representative of the government, and Mises as the representative of the Chamber of Commerce. So he's not fully satisfied with this report, in particular since it does not give its full due to the labor unions. and so in 1931 the same year he publishes a separate analysis with the title The Causes of the Great Depression in which he does precisely this. Here he states the following fact, well okay we have a boom-buzz sequence that was given in this case too, we had expansionary monetary policy so it had to come to an and Economic Crisis. The question now is why does the crisis last so long? He asked this in 1931, so only after two years.

1:26:14Crisis is still in full swing. Could have raised the same question again in 1934 and thereafter. So why does it last so long? And he says, well, the only explanation is that we have a second element that comes here into play, namely interventionism. We have interventionism in particular in the form of intervention into the labor market that protects the labor unions, not only through minimum wage laws, but in particular through unemployment insurance. Unemployment insurance creates unemployment, very politically incorrect at the time. And he also, now we'll conclude on this, he also refutes the argument that has become the standard Keynesian argument ever since.

1:27:02This was already present six years before publication of the general theory. Namely the argument that you could reduce unemployment by an expansionary monetary policy.

1:27:2124. Yep, here it is. Now guess who proposed this proto-Keynesian argument? Nobody less than our famous Willem Röpke. So I quote for you from Willem Röpke 1932 article. Röpke says, In the present phase of the crisis, it seems to me it is wrong to expect that a reduction of the level of wages would re-establish equilibrium. This is wrong because given the total paralysis of investment, each reduction of prices and incomes would lead to a continued sterilization of means of payment in the form of an increase of the liquidity of the banking system and thus to an extended disequilibrium.

1:28:14Mises and his fellow travelers apparently do not sufficiently take take account of the fact that today we have monstrous productive reserves that are unused. In other words, we have a gigantic capital surplus that requires credit expansion to become visible. For this reason, it is not correct that government investment would deprive the private economy of its means. The paradoxical fact, which cannot be grasped on the basis of purely static ideas, is that the means of the private economy would thereby be multiplied with everything here. We have expansionary monetary policy, we have the multiplier. Wonderful.

1:29:03Mises had anticipated this line of argument in his little booklet, The Causes of the Economic Crisis. He noticed that some economists had come up with a new theory of how inflation could be beneficial. These economists knew full well that unemployment resulted from excessive wage rates, but rather than confronting the unions with the demand to stop their harmful practices, they, quote, suggest to cheat the unions, unquote. Mises summarized the argument and identified its crucial flaw, quote, In the next inflation, nominal wage rates shall not be changed, which would be equivalent to a reduction of real wage rates. This blithely assumes that in the next boom, the unions will not demand further wage increases, but quietly contemplate a reduction of real wage rates."

1:29:56So that's a decisive consideration against this whole nonsense, which was already there in 1931. So you see, it's not necessarily because you're right that people start listening to you. But some people need to learn this lesson again and we hope that the Mises biography might help a little bit in this respect. Now I ran out of time. Sorry, there's no time for questions now. Those of you who want to ask a question can do this after the lecture and otherwise we'll meet again tomorrow morning. Thank you for your attention.