Short bio of ludwig von mises

Austrian–American economist (–)

Not to be confused with Ludwig Mies van der Rohe.

Ludwig Heinrich Edler von Mises^{[n 1]} (German:[ˈluːtvɪçfɔnˈmiːzəs]; 29 September – 10 October ) was an Austrian-American economist, logician, sociologist and philosopher of economics of the Austrian school. Mises wrote and lectured extensively on the societal contributions of classical liberalism and the power of consumers.^[1] He is best known for his work in praxeology, particularly for studies comparing communism and capitalism, as well as for being a defender of classical liberalism^[2] in the face of rising illiberalism and authoritarianism throughout much of Europe during the 20th century.

Mises emigrated from Austria to the United States in , fleeing from Nazis who on the first day the German Army entered Vienna rushed into the von Mises apartment in Vienna, apparently looking for him, and confiscated his library and papers. Mises was in Geneva, Switzerland at the time, but when the German invasion of France was about to leave Switzerland completely surrounded by Fascist and Nazi controlled territory, von Mises and his wife found it necessary to flee through France dodging German troops, to get to the US via Spain and Portugal.^[3] Since the midth century, both libertarian movements and the field of economics as a whole, have been strongly influenced by Mises's writings.^[4] Mises's student Friedrich Hayek viewed Mises as one of the major figures in the revival of classical liberalism in the post-war era. Hayek's work The Transmission of the Ideals of Freedom () pays high tribute to the influence of Mises in the 20th-century libertarian movement.^[5] Economist Tyler Cowen lists his writings as "the most important works of the 20th century" and as "among the most important economics articles, ever".^[6]

Mises's Private Seminar created a leading group of economists.^[7] Many of its alumni, including Friedrich Hayek and Oskar Morgenstern, emigrated from Austria to the United States and Great Britain. Mises has been described as having approximately seventy close students in Austria.^[8]

Mises received many honors throughout the course of his lifetime—honorary doctorates from Grove City College (), New York University (), and the University of Freiburg () in Germany.&#;His accomplishments were recognized in by his alma mater, the University of Vienna, when his doctorate was memorialized on its 50th anniversary and "renewed," a European tradition, and in by the Austrian government.&#; He was also cited in as "Distinguished Fellow" by the American Economic Association.^[9]

Biography

Early life

Ludwig von Mises was born on 29 September to Jewish parents in Lemberg, then in the Austro-HungarianKingdom of Galicia and Lodomeria.^[10] His great-grandfather Meyer Rachmiel Mises had been ennobled a few months before Ludwig's birth, receiving the honorific Edler (indicating a non-landed noble family), and the right to add the nobiliary particle von to his name; his family had been involved in financing and constructing railroads.^[11] His mother Adele (née Landau) was a niece of Joachim Landau, a Liberal Party deputy to the Austrian Parliament.^{[12]:&#;3–9&#;} His father Arthur von Mises was stationed in Lemberg as a construction engineer with the Czernowitz railway company.

By the age of 12, Mises spoke fluent German, Russian, Polish and French, read Latin and could understand Ukrainian.^[13] Mises had a younger brother, Richard von Mises, who became a mathematician and a member of the Vienna Circle, and a probability theorist.^[14]

Mises was educated at the Akademisches Gymnasium in Vienna from to , before entering the University of Vienna, where he studied law and the social sciences, initially in preparation for a career as a civil servant.^[15][16] There, he first encountered the works of Carl Menger, whose book Grundsätze der Volkswirtschaftslehre came to influence him significantly. Mises's father died in Three years later, Mises was awarded his doctorate from the school of law in ^[17] From to , Mises was a professor at the university, during which he mentored Friedrich Hayek.^[1]

Life in Europe

In the years from to , Mises attended lectures given by Austrian economist Eugen von Böhm-Bawerk.^[18] He graduated in February (Juris Doctor) and started a career as a civil servant in Austria's financial administration.

After a few months, he left to take a trainee position in a Vienna law firm. During that time, Mises began lecturing on economics and in early joined the Austrian Chamber of Commerce and Industry, serving as economic advisor to the Austrian government until he left Austria in ^[19] During World War I, Mises served as a front officer in the Austro-Hungarian artillery and as an economic advisor to the War Department.^[20]

Mises was chief economist for the Austrian Chamber of Commerce and was an economic advisor of Engelbert Dollfuss, the austrofascistAustrian Chancellor.^[21] Later, Mises was economic advisor to Otto von Habsburg, the Christian democratic politician and claimant to the throne of Austria (which had been legally abolished in following the Great War).^[3] In , Mises left Austria for Geneva, Switzerland, where he was a professor at the Graduate Institute of International Studies until Mises was invited to the Colloque Walter Lippmann, organized in Paris in , and was a founding member of the Mont Pelerin Society in ^[22]

While in Switzerland, Mises married Margit Herzfeld Serény, a former actress and widow of Ferdinand Serény. She was the mother of Gitta Sereny.^[23]

World War I

During World War I, Ludwig von Mises was drafted by the Austrian government, despite being ideologically and morally opposed to the war. Like many who served in the front lines,^[24] he rarely spoke about his personal experiences, and even his Memoirs () omits a detailed account of his time in the military. However, he briefly alluded to the harsh realities of war in his seminal work, Human Action ():

Nothing is fair in war. It is not just that God is for the big battalions and that those who are better equipped defeat poorly equipped adversaries. It is not just that those in the front line shed their life-blood in obscurity, while the commanders, comfortably located in headquarters hundreds of miles behind the trenches, gain glory and fame. It is not just that John is killed and Mark crippled for the rest of his life, while Paul returns home safe and sound and enjoys all the privileges accorded to veterans. It may be admitted that it is not "fair" that war enhances the profits of those entrepreneurs who contribute best to the equipment of the fighting forces. But it would be foolish to deny that the profit system produces the best weapons.^[25]

In Memoirs (), the only thing he had to say about the war was how it affected his work:

By the end of , I was no longer at the front, but worked in Vienna in the economics division of the Department of War. I wrote only two small essays during those years.^[26]

The same chapter concludes with how he coped with his involuntary servitude fighting as the aggressor in a war he wanted nothing to do with, and includes a quote from Virgil that would go on to become the slogan of the Mises Institute in Alabama:

How one carries on in the face of unavoidable catastrophe is a matter of temperament. In high school, as was custom, I had chosen a verse by Virgil to be my motto: Tu ne cede malis sed contra audentior ito ("Do not give in to evil, but proceed ever more boldly against it"). I recalled these words during the darkest hours of the war.^[27]

Work in the United States

In , Mises and his wife left Austria, by then a territory of Nazi Germany, and emigrated to New York City in the United States.^{[1][12]:&#;xi&#;} He had come to the United States under a grant by the Rockefeller Foundation. Like many other classical liberal scholars who fled to the United States, he received support from the William Volker Fund to obtain a position in American universities.^[28] Mises became a visiting professor at New York University and held this position from until his retirement in , though he was not salaried by the university.^[17] Businessman and libertarian commentator Lawrence Fertig, a member of the New York University Board of Trustees, funded Mises and his work.^[29][30]

For part of this period, Mises studied currency issues for the Pan-Europa movement, which was led by Richard von Coudenhove-Kalergi, a fellow New York University faculty member and Austrian exile.^[31] In , Mises became one of the founding members of the Mont Pelerin Society.

In , Mises received the Austrian Decoration for Science and Art for political economy^[32] at the Austrian Embassy in Washington, D.C.^[12]:&#;&#;

Mises retired from teaching at the age of 87^[33] and died on October 10, , at age He is buried at Ferncliff Cemetery in Hartsdale, New York. Grove City College houses the 20,page archive of Mises papers and unpublished works.^[34] The personal library of Mises was given to Hillsdale College as bequeathed in his will.^[35][36]

At one time, Mises praised the work of writer Ayn Rand, and she generally looked on his work with favor, but the two had a volatile relationship, with strong disagreements for example over the moral basis of capitalism.^[37] The two thinkers' disagreement reached a critical point during a dinner conversation where Mises reportedly lost his temper and called Rand a "silly little Jewish girl" after a heated argument, despite himself being Jewish.^[38]

Creation of the Mises Institute

As a result of the economic works of Ludwig Von Mises, the Mises Institute was founded in by Lew Rockwell, Burton Blumert, and Murray Rothbard, following a split between the Cato Institute and Rothbard, who had been one of the founders of the Cato Institute.^{[non-primary source needed]} It was funded by Ron Paul.^[39]

The Mises Institute offers thousands of free books written by Ludwig Von Mises, Murray Rothbard, Hans-Hermann Hoppe, and other prominent economists in e-book and audiobook format.^[40] The Mises Institute also offers a series of summer seminars.^[41]

Contributions and influence in economics

Ludwig von Mises made significant contributions to the field of economics^[42] initially by seeking to integrate the teachings of Carl Menger and Eugen von Böhm-Bawerk into the classical economic framework of his time.^[43] He recognized the need to reformulate economic epistemology,^[43] particularly in response to the challenges introduced by the subjective value theory and the subjectivity of individual agents.^[12] Later, Mises made groundbreaking contributions to economic theory,^[4] particularly in advancing the Austrian School of Economics by developing his own transformative ideas, including praxeology—a systematic framework for understanding human action^[44]—and the economic calculation problem,^[45] which challenged the feasibility of socialism.^[46][47]

In , Mises introduced the Economic Calculation Problem as a critique of socialist states which are based on planned economies and renunciations of the price mechanism.^[48] In his first article "Economic Calculation in the Socialist Commonwealth", Mises describes the nature of the price system under capitalism and describes how individual subjective values are translated into the objective information necessary for rational allocation of resources in society.^[48] Mises argued the absence of market pricing results in inefficiencies within the economic system because central planners are deprived of the crucial information regarding opportunity costs needed to make informed decisions about resource allocation.^[48] He wrote that "rational economic activity is impossible in a socialist commonwealth".^[48] Mises developed his critique of socialism more completely in his book Socialism: An Economic and Sociological Analysis, arguing that the market price system is an expression of praxeology and cannot be replicated by any form of bureaucracy.^[49][2]

Throughout his life^{[15][25][48][50]} Mises argued that only a free market system, where individuals are free to pursue their own interests, can efficiently allocate resources and maximize social welfare.^[51] He believed that laissez-fairecapitalism is the only system that allows individuals to express their intersubjective appraisals of goods and services in an open market, thereby creating a nexus of price signals based off of the relative exchange ratios between goods. These price signals are essential for coordinating the inherently incomparable^[52] subjective valuations that different individuals place on the same external objects.^[53] In a market, these subjective rankings are transformed into numerical values—prices—that can be objectively compared.^[54] This mechanism enables the continuous alignment of the open-ended coordination problem posed by millions of disparate individual preferences.^[55][56] Unlike a centrally planned system, which assumes a final equilibrium which is to be planned towards,^[57] the free market remains in constant flux,^[58] continuously adjusting to changes in preferences and conditions.^[59] Mises's praxeological approach and reformulation of the economic problem has had a profound impact on the Austrian school of economics.^[60][61]

Mises revived and expanded the term Catallactics, which originally came from the greek word katallasso, meaning "to exchange" or "to reconcile."^[62]Catallaxy explains prices as they are, rather than as they "should" be.^[63] By adopting a value-neutral stance, it does not judge whether a price is "too high" or "too low"; instead, it seeks to explain why a price exists at a particular level based on the interplay of supply and demand. This framework considers both the material conditions influencing the availability of goods and services (supply) and the subjective preferences, values, and willingness to pay of individuals (demand).^[59]Prices emerge where these factors align between buyers and sellers, reflecting the conditions for exchange at a specific time and place.^[64]

Contrast with Normative Economics: By focusing on prices as they are, catallactics aimed to avoid the pitfalls of culturally or ideologically biased assumptions, where economic policies are designed around idealized notions of what "ought" to happen, (e.g. some works that aim to prescribe the economy, not just describe it:^{[65][66][67][68][69][70]}) which Mises argued carried them outside of the realm of the descriptive (or wertfrei) sciences.^[71]

"Economics is not about what ought to be, but about what is. It describes and analyzes the reality of human action, without imposing any personal valuations or ethical imperatives."^[72]

For Mises, introducing normative judgments—such as declaring certain prices "fair" or "unfair"—transforms economics from a descriptive science into an ideological discourse.

"The ultimate decisions, the valuations and the choosing of ends, are beyond the scope of any science."^[72]

This approach redefined economics not as the study of wealth or resources in the abstract, but as the analysis of voluntary exchanges of these resources within the division of labor.^[73] His work on catallactics became a cornerstone of Austrian economics, influencing subsequent theories on entrepreneurship,^[74] knowledge,^[46] and the limits of government intervention.^[75]

Mises was also a forerunner in the movement to unite microeconomics and macroeconomics,^[59] arguing that macroeconomic phenomena have microeconomic foundations^[76]—nearly 50 years before this perspective was widely adopted by mainstream economics.^[77]

In his magnum opus Human Action (), Mises established praxeology as the foundational methodology for the social sciences,^[78] offering a systematic approach to understanding human behavior and decision-making. This work laid the groundwork for a comprehensive economic theory^[79] that accounted for the subjective nature of value and the complexity of individual choices, marking a significant departure^[18] from the objective models of classical economics.^[80][81] Mises used praxeology to further critique socialism, arguing that it is fundamentally flawed because it treats economics as a solvable, static problem^[82] akin to mathematical or engineering challenges.^[52] Instead, he argued, economics involves an open-ended coordination process that aims to align the diverse and equally valid^[83] subjective appraisals of millions of individuals.^[58] However, while praxeology has been influential within the Austrian school of economics, it is not widely adopted in contemporary economic practice,^[84] which predominantly relies on empirical and mathematical methods to analyze and predict economic phenomena.^[85] Most mainstream economists view praxeology as lacking empirical validation and testability, thereby limiting its acceptance as a scientific approach within the broader discipline.^[86]

In his book The Anti-Capitalistic Mentality, Ludwig von Mises explored the roots of intellectual opposition to the free market, particularly in American society.^[87] Mises argued that some people resent the burden of freedom, preferring the perceived security of a caste-like system where individual responsibility for one's position in the division of labor is minimized. He believed that people who are content in their position, i.e., who have forgone upward social mobility, may yearn for capitalism to be a rigid caste system, allowing them to blame "the system" or "society" for their low wages or unfulfilled ambitions. Mises also contended that throughout most of human history, wealth was often accumulated through exploitation, war, and conquest.^[88] As a result, our cognitive biases have not yet adapted to the modern world of rule of law and peaceful exchange, leading to a subconscious suspicion of wealth as being illegitimately obtained. This suspicion persists even though, in a free market, individuals can accumulate wealth through mutually beneficial exchange and technological innovation. Mises also criticized the romanticization of artisan goods, arguing that mass production, driven by consumer demand, has democratized access to goods that in previous centuries were available only to a small aristocratic few.^[89] He suggested that critics who lament the availability of inexpensive, mass-produced goods fail to appreciate the benefits these goods bring, as they enable a higher standard of living for the general population who may not be able to afford handcrafted goods.^[1]

Friends and students of Mises in Europe included Wilhelm Röpke and Alfred Müller-Armack (advisors to German chancellor Ludwig Erhard), Jacques Rueff (monetary advisor to Charles de Gaulle), Gottfried Haberler (later a professor at Harvard), Lionel, Lord Robbins (of the London School of Economics), Italian President Luigi Einaudi, and Leonid Hurwicz, recipient of the Nobel Memorial Prize in Economic Sciences.^[90] Economist and political theorist Friedrich Hayek first came to know Mises while working as his subordinate at a government office dealing with Austria's post-World War I debt. While toasting Mises at a party in , Hayek said: "I came to know him as one of the best educated and informed men I have ever known".^{[3]:&#;–&#;} Mises's seminars in Vienna fostered lively discussion among established economists there. The meetings were also visited by other important economists who happened to be traveling through Vienna.

At his New York University seminar and at informal meetings at his apartment, Mises attracted college and high school students who had heard of his European reputation. They listened while he gave carefully prepared lectures from notes.^{[91][92][n 2]}

Ludwig von Mises acknowledged that, by the time of his writing, many core concepts from the Austrian school of economics had been integrated into mainstream economic thought.^[93] He noted that the distinctions between the Austrian school and other economic traditions had blurred, making the label "Austrian" more of a historical reference than a marker of a distinct, contemporary doctrine.^[94] This integration occurred as concepts like marginal utility, opportunity cost, and the importance of subjective value became widely accepted among economists.^[77]

Philosophical views

Ludwig von Mises was a prominent advocate of methodological individualism,^[29] a principle that asserts all social phenomena result from the actions and decisions of individuals.^[95] He believed that only individuals act, and thus, collective entities such as nations, classes, or races do not possess independent agency.^[96] This perspective formed the basis of his economic and social theories, rejecting any form of collectivism that attributed agency to groups rather than to individuals.^[97]

His rejection of collectivism led him to be a vocal critic of what he termed "polylogism;" the idea that different groups of people have fundamentally different ways of thinking and thus different logics.^[98] He rejected the notion that there could be distinct sciences or truths based on race, class, or nationality, such as "Jewish science" or "German science".^[99] Mises believed in the universality of logic and reason, asserting that the principles of economics and science are objective and apply universally, regardless of the cultural or ethnic background of the individuals studying them.^[44]

Ludwig von Mises is credited^[] with transforming praxeology into a comprehensive framework for understanding economics and human behavior, making it central to the Austrian school of economics.^[44] He provided it with a clear definition and methodology, focusing on the logical structure of human action and choice.^[4] Thus, while the term existed before Mises, he is largely responsible for its current understanding and significance in economic theory.^[59] Mises argued that economics is a branch of praxeology, which studies the implications of the fact that individuals act purposefully.^[] Mises maintained that economic laws are derived from the self-evident axiom^[] that humans engage in purposeful behavior to achieve desired ends.^[][][] This approach led him to oppose empirical and statistical methods as primary tools in economic theory, arguing that these could not establish economic laws due to the uniqueness of historical events.^[]

In defense of his teleological understanding of human action, he highlighted the difference in using physics to study inanimate objects, and its application to the study of an introspective being which reflects upon and changes its reactions to receiving the same stimulus twice:

The objects of the natural sciences react to stimuli according to regular patterns. No such regularity, as far as man can see, determines the reaction of man to various stimuli. Ideas are frequently, but not always, the reaction of an individual to a stimulation provided by his natural environment. But even such reactions are not uniform. Different individuals, and the same individual at various periods of his life, react to the same stimulus in a different way. As there is no discernible regularity in the emergence and concatenation of ideas and judgments of value, and therefore also not in the succession and concatenation of human acts, the role that experience plays in the study of human action is radically different from that which it plays in the natural sciences.^[]

He would eventually go into enormous detail defending this distinction in his work Epistemological Problems of Economics (), Theory and History (), and again in The Ultimate Foundation of Economic Science () which included further explication such as:

Man alone has the faculty to build a purpose and to aim at its realization. Stones are moved by an impulse from outside. Animals, in their behavior, follow the impulses of their senses and appetites. Man is the only being who can control his impulses and passions, who can suppress a natural inclination and act contrary to it.^[]

This perspective placed him in contrast with the positivist approach, which emphasizes empirical data and observation as the foundation of scientific knowledge.^[85] This rift in epistemology has led some to argue^[] that Mises attempted to usher in a paradigm shift in the science of economics—but this is not the direction the field as a whole has since gone.^[][][][86] Because of this, most academics within the economics community implicitly consider the work which comes out of the Mises Institute and other followers of Mises, to simply not be economics.^[84] Mises's followers operate under a different paradigm and follow an opposed rule set to those operating under positivist economics.^[] His objections can be seen as an early precursor to more modern critiques such as the famous Lucas critique.^[]

Political views

Ludwig von Mises was a steadfast advocate of liberalism, particularly classical liberalism.^[15] He believed that while Marx provided a powerful critique of capitalism, he failed to offer a constructive vision^[57] of a socialist society that could be practically implemented.^[][] To learn from this mistake, after publishing his lengthy critique of socialism, Theory and History: An Interpretation of Social and Economic Evolution,^{[citation needed]} in his next book, Liberalism (), Mises articulated a positive vision of free society rooted in individual liberty, private property, free markets, and limited government coercion. He argued that these principles are essential for creating a peaceful and prosperous society.^[15]

Key aspects of Mises's defense of liberalism

Mises advocated for economic non-interventionism^[] and was a staunch anti-imperialist.^[] He viewed the Great War as a watershed moment in human history, arguing that it marked a significant departure from previous conflicts due to the advanced technology employed. His experience in the first World War led to a lifelong obsession of finding a workable doctrine of peace among nations, which at the same time would not ask any individual nation to give up their own self interest. Regarding the birth of total war, Mises wrote:

War has become more fearful and destructive than ever before because it is now waged with all the means of the highly developed technique that the free economy has created. Bourgeois civilization has built railroads and electric power plants, has invented explosives and airplanes, in order to create wealth. Imperialism has placed the tools of peace in the service of destruction. With modern means, it would be easy to wipe out humanity at one blow.^[]

Marxists Herbert Marcuse and Perry Anderson as well as German writer Claus-Dieter Krohn accused Mises of writing approvingly of Italian fascism, especially for its suppression of leftist elements, in his book Liberalism.^[] In , economist J. Bradford DeLong and sociologist Richard Seymour repeated the accusation.^[]

Mises, in his book Liberalism, wrote:^[]

It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history. But though its policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.

Mises biographer Jörg Guido Hülsmann says that critics who suggest that Mises supported fascism are "absurd" as he notes that the full quote describes fascism as dangerous. He notes that Mises said it was a "fatal error" to think that it was more than an "emergency makeshift" against up and coming communism and socialism as exemplified by the Bolsheviks in Russia and the surging communists of Germany.^[12]:&#;&#;Hülsmann writes in Mises: The Last Knight of Liberalism that Mises had been a card-carrying member of the Fatherland Front party and that this was "probably mandatory for all employees of public and semi-public organizations."^[]

However, this paragraph is also in keeping with a theme that runs through his work: he consistently refrained from imputing bad intentions to those he disagreed with, regardless of how fascistic or homicidal their policy outcomes were. He took pain to more than once explicitly acknowledge the good intentions of totalitarians and socialists of all walks, such as when he wrote:

Socialists have full right to be called righteous men. They do not wish to profit personally from their ideology. They seek nothing for themselves. They want to benefit the public. They have nothing but scorn for the riches that the capitalistic order of production offers them. They live for their idea, and if they sacrifice anything it is their own well-being. They are the idealists among our contemporaries.^[]

Mises, in his book Liberalism, also wrote of fascism:^[]

Repression by brute force is always a confession of the inability to make use of the better weapons of the intellect—better because they alone give promise of final success. This is the fundamental error from which Fascism suffers and which will ultimately cause its downfall. The victory of Fascism in a number of countries is only an episode in the long series of struggles over the problem of property. The next episode will be the victory of Communism. The ultimate outcome of the struggle, however, will not be decided by arms, but by ideas. It is ideas that group men into fighting factions, that press the weapons into their hands, and that determine against whom and for whom the weapons shall be used. It is they alone, and not arms, that, in the last analysis, turn the scales. So much for the domestic policy of Fascism. That its foreign policy, based as it is on the avowed principle of force in international relations, cannot fail to give rise to an endless series of wars that must destroy all of modern civilization requires no further discussion. To maintain and further raise our present level of economic development, peace among nations must be assured. But they cannot live together in peace if the basic tenet of the ideology by which they are governed is the belief that one's own nation can secure its place in the community of nations by force alone.

In his earlier work, Socialism (), Mises also made a similar remark with more context, saying that Mussolini did his best to prop up Austria-Hungary as a means of protecting Italian speaking minorities, but regardless concludes that he was one the most wretched figures in history:

Only those Italians are free to blame Mussolini who begin to understand that the only means of protecting the Italian-speaking minorities in the Littoral districts of Austria against the threatening annihilation by the Slavonic majorities was to preserve the integrity of the Austrian state, whose constitution guaranteed equal rights to all linguistic groups. Mussolini was one of the most wretched figures of history.^[]

In regards to Nazism, Mises called on the Allies in his book Omnipotent Government to "smash Nazism" and to "fight desperately until the Nazi power is completely broken".^[]

In his Notes and recollections, Mises wrote of his experience being personally persecuted by the Nazis for his attacks on Italian Fascism and the National Socialist party: