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Monday, November 24, 2014

Mises’s Century

A lifetime of scholarship

Over the last nine weeks, it’s been my privilege to conduct a series of weekly seminars on the main works of Ludwig von Mises (1881–1973). I thought I knew his works very well, having put them all online and written about them individually for so many years.

And yet there is something very special about doing a compressed rereading of a lifetime of literary output. What I discovered was the intellectual biography of an amazing thinker. Mises's assessment of the prospects for freedom ebbed and flowed over the course of a century, as he subtly adapted his outlook given what he was learning about the world around him.

Going through this process has been so revealing, and has confirmed to me that the worst fate of any thinker of Mises’s stature and significance is for him to become a symbol, a slogan, a meme, and nothing more — as if we already know what he thinks by memorizing a few words and phrases.

It’s preposterous. Mises was monumental, and his works deserve to be studied and learned throughout a lifetime. He wasn’t just one thing: he was a human being with changing views, moods, missteps and corrections, contributions that have been lost, and many underdeveloped insights that others can flesh out.

We might think we know his works, but we do not. It takes an open mind and serious study to come to terms with who he was and what he did.

His first major published work, The Theory of Money and Credit, came out in 1912. It was a technical book on monetary theory, but it also contained a strong political warning against central banks. Mises squarely saw the potential for massive abuse by governments in three areas: creating inflation, which distorts business calculation and discourages saving; generating cycles of booms and busts through manipulating interest rates; and increasing the size and scope of government power. All three predictions came true.

Following the First World War, his next and most underappreciated work appeared: Nation, State, and Economy (1919). Here is where he began to reveal the fullness of his political vision. Riffing on the popular notion of self-determination, Mises saw the cause of human liberty as bound up with people’s rights to choose the form of government under which they lived. Nations, he wrote, were more enduring than governments, and it makes sense that people will organize themselves politically according to nationhood. Democracy was part of the idea of liberty itself, the application of the market principle to the institution of government.

Even after such a terrible war, he was optimistic that the next crisis could be avoided through a consistent application of the idea of self-determination. If this idea could be brought down to the individual level, so that every person could choose his or her own form of government, it would have to be done. Later in the work, he provided a broadside against socialist economic planning. Then he issued a firm directive to Germany in particular to move toward liberalism rather than plot political acts of vengeance for the country’s war losses.

His next three works dealt with political systems. Socialism could not work in any form, he wrote in 1922 in Socialism, because it creates nothing, violently attacks the core institutions of civilization, and disables the capacity of people to cooperate to their mutual advantage. This book offers a theory of ownership and social order that looks completely different from the English tradition of laissez-faire thought — but in a way that is remarkably compelling. His next book remains the best single tract for the free society ever written: Liberalism (1927). The final book in the trilogy, Critique of Interventionism (1929), was on the failings of mixed economic systems such as fascism.

In the following decade, his academic work was focused on business-cycle studies and ending the global depression, but he was also in the midst of personal upheaval. The rise of Nazi ideology in Austria and the growing power of Germany led to a diaspora of his circle. As a Jew and a liberal, he was in danger. He found sanctuary in Switzerland, where he stayed until he emigrated to the United States in 1940.

These were his darkest days. None of his warnings had moved history in the direction of liberty. His early faith in the idea of nationhood as a principle of political organization had entirely waned. Even his faith in democracy had been shattered. The world had been devoured in anti-liberal frenzies: war, inflation, immigration controls, socialism, and ever-growing government. His anger and loss of faith were incredibly evident in his 1944 work Omnipotent Government (which is probably the most anti-Nazi book ever written, no exaggeration). Here he declared liberalism a failure because it had overestimated the capacity of people to think rationally.

Even so, his masterwork, Human Action, was released at the end of that decade. It became a surprise hit and very quickly. He went from being just another intellectual émigré struggling to save a legacy to being an intellectual rock star in American political and intellectual life. It lifted his spirits and inspired his incredible work, Theory and History (1954). Here we begin to see the light, and he works his way toward seeing how a future of liberty could work itself out.

For Mises, it was no longer about the possibility of political reform from the top down. Mises’s hope was in the creativity of the human spirit against all attempts to suppress it.

There have always been attempts to curb the individual’s initiative, but the power of the persecutors and inquisitors has not been absolute. It could not prevent the rise of Greek philosophy and its Roman offshoot or the development of modern science and philosophy. Driven by their inborn genius, pioneers have accomplished their work in spite of all hostility and opposition. The innovator did not have to wait for an invitation or order from anybody.

Mises did not wait. Neither are today’s entrepreneurs who are developing disruptive technologies. They are challenging the authority of the regulators, looters, and rulers.

Mises wrote one last work in 1962. It was The Ultimate Foundation of Economic Science. Here was his final plea for a scientific understanding of the logic of human choice — a plea to release society from the bad science of political imposition to the good science of freedom.

It’s remarkable to consider how Mises’s legacy stretches over the course of a century. His literary output made enormous contributions, but he also became the narrator of decline. In the end, he found hope in the genius of the human person against all attempts at control.

Note: A version of this post appeared at