According to the 2019 edition of The Heritage Foundation’s Index of Economic Freedom, the economy of Mexico is the 66th freest in the world—anemic but still above the regional and world averages. In the most recent Economic Freedom of the World Report from Canada’s Fraser Institute, Mexico fared marginally lower, earning a ranking of 82.
Mises' Magnum Opus
Somewhere between a third and a half of the world’s economies are freer than Mexico’s. If the country’s leaders and intelligentsia had followed the advice of a distinguished visitor almost 80 years ago, Mexico might well be in the top five today—right up there with Switzerland and Singapore. Some Mexican politicians might even be calling for a border wall to keep out all those California job-seekers.
Who was that distinguished visitor who gave the Mexicans such good advice in January and February 1942? It was none other than Ludwig von Mises. His magnum opus, Human Action, debuted on the world stage 70 years ago this very week in 1949—seven years after his first visit to Mexico—but by 1942, he already had more than two prolific decades behind him as an insightful thinker of international renown. In my view, Mises
remains not only the pre-eminent economist of the Austrian school, but also a towering figure within the science of economics itself. It is a tragic oversight that a Nobel Prize never came his way while the award has often been bestowed upon individuals of fewer insights and lesser consequence. If only the world appreciated how he brilliantly and thoroughly demolished socialism nearly a century ago, millions of early deaths and untold misery could have been avoided in the decades since. Fifty Nobels would be insufficient to appropriately honor the man, but the world we know is hardly fair.
If everything goes according to plan, Mises will get the documentary film he deserves when Mises the Movie premieres in late 2020. (You can help the project with a financial contribution.) In preparing for an interview with the film’s makers last week, I re-read the 1976 book, My Life with Ludwig von Mises, by the great economist’s wife, Margit. A short chapter titled “Two Months in Mexico” captured my attention in a way it didn’t when I first read it over 40 years ago, probably because of my more recent interests in Latin America and my involvement with the exciting new initiative, FEE en Español.
As Hitler’s onslaught engulfed one nation after another in the summer of 1940, Ludwig and Margit von Mises departed Europe. They had plenty of good reasons to flee given the hostility of the Nazis to Ludwig’s world stature as a defender of classical liberal ideas, his withering critiques of socialism and, of course, his ethnic Jewishness.
Montes de Oca's Story
The following winter in New York, the couple met with a gentleman from Mexico City whom they came to regard with immense affection. His name was Señor Luís Montes de Oca, a prominent bank official and former secretary of the treasury (1927 to 1932) under three presidents of the republic. Margit wrote of him admiringly.
Though he was of small stature, he was a great man, and bore himself as such. He had an all-encompassing knowledge of politics, economics, and world affairs, spoke four languages fluently, was widely read, and knew everything Lu had ever written. He immediately invited Lu and me to come to Mexico for a series of lectures at the university, which he would sponsor.
In her 2016 book, The Origins of Neoliberalism in Mexico: The Austrian School, Maria Eugenia Romero Sotelo cites prominent Mexicans who knew Montes de Oca personally as “an enemy of official interventions to influence the national economy” and “a man of extraordinary culture.” He strongly opposed government budget deficits, knowing that they burden a country with dubious spending and debt.
He courageously defended freedom and capitalism, and Mises was his hero for doing the same. Montes de Oca believed that, in his own words, “the inevitable consequence” of interventionist central planning was “the creation of disturbing conditions that do not solve the problem that was to be remedied and instead raise others that complicate and make the situation worse.”
It was a marvelous time, with Lu delivering many university and public lectures.
From Margit’s description, Montes de Oca was the perfect host. Life in the US for the first year or so after she and Lu arrived in New York was tough. Lu’s spirits were low. He had lost not only much of his personal property but his Austria, as well. Finances were troublesome. After German, his second language was French, not English.
But starting with a reception at the Mexico City airport that “almost befitted royalty,” the nearly two months the couple spent in Mexico marked a turning point. It was a marvelous time, with Lu delivering many university and public lectures. The Miseses were entertained almost every day by stimulating conversations, cultural events, and site-seeing excursions. Margit later reflected:
I shall always remember Montes de Oca as one of the finest men I ever met. And I shall always be grateful to him for his hospitality and his great understanding with which he advanced Lu’s work in Mexico and South America and, without knowing it, helped re-establish Lu’s confidence and optimism after our trying escape from Europe.
Montes de Oca promised Lu that he would arrange for a Spanish edition of Lu’s extraordinary 1922 book Socialism. Nearly a century later, that book remains today perhaps the most incisive challenge to socialist theoreticians ever written. It kicked off the great “calculation” debate in which Mises roundly criticized socialism as economically irrational—a charge still essentially unanswered.
Montes de Oca's Legacy
Unfortunately, Montes de Oca did not live to see the appearance of the first Spanish edition of Socialism in 1961. After a period of ill health, he died in 1958. He deserves to be remembered for his service to his country, for his love of liberty, and for his exceedingly generous relationship with the 20th century’s greatest economist and his wife.
I’ve said little here about what Ludwig von Mises told his Mexican audiences in 1942. As those acquainted with Misesian thought might expect, he spoke eloquently on a wide range of topics—socialism, capitalism, sound money, economic development, and more. For details, I refer readers to “Mises on Mexico” by Eduardo Turrent, published by FEE in March 1999. It’s a thoughtful tribute to the man and his ideas from a Mexican who deeply appreciated both.
In Mexico especially—that thanks to a man named Montes de Oca, there’s Misesian history and tradition in America’s southern neighbor.
September 14, 2019, will mark the 70th anniversary of Ludwig von Mises’s most remarkable volume, Human Action. The occasion will likely be noted in different ways by the many people and institutions influenced by this remarkable genius. FEE, which Mises regarded as almost his second home from 1946 until his death in 1973, will be one of them.
In the meantime, I just wanted our readers to know—in Mexico especially—that thanks to a man named Montes de Oca, there’s Misesian history and tradition in America’s southern neighbor. And it’s never too late for new generations of Mexicans to get acquainted with him. We hope that in the coming months and years, FEE en Español will assist toward that end.
(The author wishes to thank Mexico City students Daniel Buenrostro and Edwin Arturo Portillo for their assistance with this article and for their good work on behalf of liberty, free markets, and FEE in Mexico.)
For Additional Information, See:
- The Origins of Neoliberalism in Mexico: The Austrian School by Maria Eugenia Romero Sotelo
- Mises: The Last Knight of Liberalism by Jörg Guido Hülsmann
- "Understanding Austrian Economics" by Henry Hazlitt
- The Essential Von Mises by FEE
- "Mises Never Gave In to Evil" by Dan Sanchez
- "Ludwig von Mises (1881-1973): A Prophet Without Honor in His Own Land" by Bettina Bien Greaves
- "Mises was Right: The Hampered Market Is Unsustainable" by Sandy Ikeda
- "The Significance of Mises’s 'Socialism'" by Peter Boettke
- "Salute to Von Mises" by Henry Hazlitt