Ludwig von Mises (September
29, 1881 - October 10, 1973) was a notable economist and social
philosopher, was born Ludwig Heinrich Edler von Mises in Lemberg, Austria-Hungary (today, Lviv, Ukraine), the son of Arthur von
Mises, a railroad engineer and civil servant, and Adele von Mises, born Adele Landau. Von Mises was still a small boy when his
family moved to Vienna. In 1892 he entered the
Akademisches
Gymnasium, where he received a humanistic education and befriended Hans
Kelsen. Early on, von Mises was particularly interested in history and politics. After graduation, in 1900, he therefore began to study at the department of law and government science at the University of Vienna.
University Education & Influences
Studying under Carl
Grünberg, von Mises started off as an exponent of the so-called Historical School of government science, which stressed fact-finding and despised theoretical analysis.
But in the fall of 1903 he read Carl
Menger's Principles of Economics, the
foundational text of the Austrian School of economics. The book
turned him away from the historicist approach, and in the following years he deepened his studies of economic theory, especially
in the seminar of Eugen von Böhm-Bawerk, a former
finance minister and champion of the Austrian School.
Von Mises graduated in February 1906
(Juris Doctor). He started a career as a civil servant in Austria's
financial administration, but after a few months he quit in disgust with bureaucracy. For the next two years he worked as a
trainee in a Vienna law firm and also started lecturing on economics. In early 1909, he joined the Vienna Chamber of Commerce and Industry, where he worked for the next twenty-five
years. The chamber was at the time a semi-governmental organization and through its publications exercised a considerable
influence on Austrian politics.
Parallel to his pecuniary activities, von Mises pursued ambitious scholarly interests and wrote a treatise on money and
banking. In his Theorie des Geldes und der Umlaufsmittel (1912), translated into English in 1934 as Theory of Money and Credit, he made two lasting contributions to economics: he demonstrated how
Menger's value theory applied to money, and he presented a new business-cycle theory in the light of which economic crises
appeared as resulting from inflation-induced misallocations of resources. He also showed that money could not possibly be
neutral, and that increases of the quantity of money always had redistribution effects.
During World War I von Mises served as a front officer in the
Austro-Hungarian artillery and as an economic adviser to the War Department. He gained firsthand experience of the realities of
war socialism, which he would later digest in his theory of socialism, and of the
dynamics of interventionism. In the last year of the war, he received a prestigious but unpaid appointment as professor
extraordinarius at the University of Vienna.
After the war, von Mises briefly became an adjunct member of the new republican government of German Austria (the name carried by the Austrian state until September 1919). He was the authority on financial matters pertaining to
foreign affairs. But his main practical achievement in this period was to persuade socialist leader Otto Bauer, a former friend and fellow student, not to attempt a Bolshevik coup. He also published a book explaining the collapse of multicultural Austria-Hungary. In Nation,
Staat und Wirtschaft (1919; translated as Nation, State, and Economy, 1983), he argued
that German imperialism had resulted from applying the power of the State to solve the problems of the multicultural communities
that prevailed in the eastern provinces of Germany and Austria.
In the fall of 1919, von Mises wrote his most famous essay, on "economic calculation in the socialist commonwealth." He argued
that a socialist leadership lacked the essential tool for the rational allocation of resources--economic calculation--and that only the money
prices of a capitalist economy make it possible to compare alternative
investment projects in terms of a common unit. Two years later he published a treatise on socialism (Die Gemeinwirtschaft,
1922), which had a decisive impact on a whole generation of rising intellectual
leaders--men such as F. A. Hayek and Wilhelm Röpke, who after World War II would lead the
nascent neoliberal movement.
During the early 1920s, von Mises successfully fought inflation in Austria and had a
decisive impact on the monetary and financial reforms of 1922. But he could not prevent the steady increase of government
regulations and the deterioration of Austria's public finances. He developed an entire new theory of interventionism showing that
government intervention is inherently counterproductive. Practically this ruled out all variants of third-way policies and left
laissez-faire capitalism as the only meaningful option on the political
menu. In 1927, he published a concise presentation of his utilitarian political philosophy in Liberalismus.
In the late 1920s he started publishing papers on the epistemological character of economics. Von Mises argued that economic science could not be verified or
refuted through the analysis of observable data. Economics was an a priori science
like mathematics or logic or geometry. Moreover, economics was just a part of a larger social science, which he would later call
"praxeology"--the logic of human action.
Von Mises eventually found the time to synthesize the various strands of his work into a praxeological treatise when, in
1934, he was called to a chair in international economic relations at the Graduate Institute for International Studies in Geneva. He would hold the chair until 1940, the same year in which his
treatise was finally published under the title Nationalökonomie. While in Geneva, in 1938, he married Margit Serény (née Herzfeld), whose
daughter Gitta Serény later
became a well-known author. They had no children from the marriage.
In July 1940, von Mises left Geneva to avoid being captured by the Nazis or being delivered to them by the Swiss government. He moved to
New York City and started a new life, receiving U.S. citizenship in
1946. Von Mises first found employment with the National Bureau of Economic
Research, then worked as an advisor for the National Association of Manufacturers, and eventually became a visiting professor at
New York University in 1945. He would "visit" with NYU for the next twenty-four years.
Libertarianism
In the U.S. he became the spiritus rector of the renascent libertarian movement, to which he gave a distinct Austrian School flavor. Close ties to the Foundation for Economic Education, the
William Volker Fund, and the Earhart Foundation gave him
the necessary organizational and financial backing. Von Mises's influence reached a peak in the years following the publication
of the English version of his praxeological treatise under the title Human
Action (1949). In the 1950s, his NYU seminar
produced many important intellectual leaders of postwar libertarianism,
such as Murray Rothbard, Hans Sennholz, George Reisman, Ralph Raico, Leonard Liggio, and Israel Kirzner.
In the 1960s, von Mises's vigor and productivity declined very considerably. He taught
at NYU until 1969 and died at St. Vincent's
Hospital in New York City. For almost four decades, he had been the uncontested dean of the Austrian School of economics. His
legacy as a social philosopher inspired a thriving movement.
Among his published works are: Human Action, The Theory
of Money and Credit, Bureaucracy, Socialism, and The
Anti-Capitalistic Mentality.
Lew Rockwell was inspired to found the Ludwig von Mises Institute in 1982 with the consent of von Mises' widow.
Modified with permission from the Ludwig von Mises Institute.
External links
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