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Friday, December 19, 2008

Mission to Moscow: The Mystery of the “Lost Papers” of Ludwig von Mises

The following is abridged from a speech delivered at “Evenings at FEE” in June 2004.

Ludwig von Mises was one of the most important free-market economists and philosophers of freedom in our time. Born in Lemberg in 1881, in the old Austro-Hungarian Empire, his professional career spanned the first seven decades of the 20th century. In two dozen books and hundreds of articles and speeches, he shattered every one of the prevailing collectivist dreams and statist delusions.

Mises proved that socialist central planning was bound to fail at a time when the false ideal of social engineering was near its zenith. He showed how and why interventionist policies and the welfare state undermine men’s freedom, prosperity, and morality. He explained that government control and mismanagement of the monetary and banking system cause inflations and depressions. He irrefutably demonstrated that only a free-market economy can protect individual liberty, assure rising standards of living, bring about entrepreneurial innovation and successfully coordinate a world of never-ending change.

Intellectual Powerhouse of Freedom

In the Austria of the 1920s and early 1930s, Mises was the intellectual powerhouse of freedom. As a senior economic analyst for the Vienna Chamber of Commerce, he tried to hold back the tidal wave of interventionist and socialist legislation being implemented by the Austrian parliament. At the University of Vienna he taught a popular and well-attended seminar every semester. At his Chamber of Commerce office and at his home he organized a “private seminar,” bringing together many of the best young minds in Vienna for discussions of the social, economic, and philosophic issues of the day. In 1926, he founded the Austrian Institute for Business Cycle Research, with a young Friedrich A. Hayek as the first director.

Both fascists and communists hated him. After all, as a leading intellectual opponent of all forms of collectivism, he had systematically pointed out all the fallacies in their evil utopian fantasies. When the Nazis assumed power in Germany in 1933, Mises realized that the political and economic future of Austria was bleak. As an uncompromising classical liberal and a Jew, he knew that the inevitable Nazi takeover of Austria would threaten not only his work but his life as well. In 1934, Ludwig von Mises accepted an invitation to become a professor of international economic relations at the Graduate Institute of International Studies in Geneva, Switzerland, and left Austria.

The Nazi Looting and Soviet Capture of Mises’ Papers

After his mother’s death in early 1937, Mises returned his Vienna apartment at 24 Wollseile, District III, to the landlord, but sublet what had been his room from the new tenants. There he stored his family and personal items, his voluminous correspondence with many of the great thinkers of his time, his manuscripts and unpublished papers, his professional and military documents (he had served in the Austrian Army in World War I, and had been three times decorated for bravery under fire on the Eastern Front), materials relating to his university teaching, and private seminar, as well as a significant portion of his large library.

On March 12, 1938, the German Army marched into Austria, and Mises’ homeland was absorbed into Hitler’s Greater German Reich. Within a few days, the Gestapo came looking for Mises at his Vienna apartment. He was safe in Switzerland, but the Nazis boxed up and hauled away all of his possessions. He had friends intercede on his behalf in a futile attempt to get his papers and family items back, but the Gestapo insisted that everything was “misplaced.” Until his death in New York in 1973, Mises believed that all of his property had been destroyed, either by the Nazis or in the cauldron of violence in the Second World War.

But in fact his papers had not been destroyed. They had been preserved by the Nazis and were eventually stored in a small town in western Bohemia in Czechoslovakia, along with millions of other documents looted by the Nazis from private individuals and governments as the Wehrmacht occupied one country after another in the turmoil of the war.

In May of 1945, Bohemia was “liberated” by the Soviet Army. In a train station the soldiers discovered 24 railway boxcars prepared for evacuation. Stuffed inside were papers and nothing else. After the NKVD – later renamed the KGB – arrived on the scene, they rapidly surveyed what was there and realized that they had discovered a treasure. Stalin was immediately informed, and he ordered the boxcars to be brought to Moscow. A deceptively undistinguished building was quickly constructed to secretly archive more than 20 million pages of captured documents, from 20 formerly Nazi-occupied countries. And there the papers remained, in Moscow, organized and cared for by KGB archivists for almost half a century. Only the Soviet secret police and the Soviet Ministry of Foreign Affairs had access to this secret archive.

In one of the great ironies of history, the papers of Ludwig von Mises, the foremost intellectual opponent of socialism in the 20th century, ended up in the tender care of the Communist Party of the Soviet Union!

On the Trail of Mises’ “Lost Papers”

I first heard that Mises’ “lost papers” might have survived the war in the summer of 1993. My wife, Anna, and I were in Vienna doing archival research on Mises. A friend of mine in the Austrian Chamber of Labor mentioned that some German diplomats had recently been to Moscow looking for material about anti-fascist Germans from before the Second World War. In one of the archival indexes they came across a reference to Ludwig Mises, but because he was an Austrian, not a German, they did not pursue the matter further.

In spite of countless efforts we were unable to track down any additional information. In summer 1996 we made a trip to the Holocaust Museum in Washington, D. C., to see if, by chance, any Gestapo file on Mises might have survived the war. But researchers at the museum were not able to find any record of such a file in their database. “What about Moscow?” I asked, “Might there be anything related to Mises in Moscow?”

We were then introduced to Karl Modek, the museum staff member responsible for researching the Holocaust in the former Soviet Union. He told us that a formerly secret Soviet archive, containing foreign papers and document collections captured during the war, had recently been declassified and was now available to researchers. The name of the archive was the Center for Historical and Documental Collections. In fact he had just received an index to the archive’s collection. He began to turn the pages of the index. One page after another, and . . . there it was! Printed on the list of collections was “Fund #623” with the name “Ludwig Mises” next to it. And nothing else.

At the time, I was the Ludwig von Mises Professor of Economics at Hillsdale College. When we returned to the campus, I told Dr. George Roche, what we might have found. Dr. Roche, before being named the president of the College in 1971, served as the Director of Programs and Seminars at FEE and had known Mises rather well and admired him greatly. He immediately arranged the funding for my wife and me to travel to Moscow and to the formerly secret archive housing the “lost papers of Ludwig von Mises.”

Our Mission to Moscow and the Secret Archive

My Russian-born wife, Anna, arranged the paperwork and the visas for the trip to Russia. One of her friends in a prominent position in the Russian Academy of Sciences arranged for our access to the archive, and on October 17, 1996, we arrived in Moscow. For the next ten days we meticulously went through the whole multilingual collection of Mises’ papers. The KGB archivists had carefully catalogued and arranged his papers into 196 separate files—totaling over 10,000 pages of material.

Neither the director of the archive nor any member of his staff understood the importance of those documents. They kept asking us, why Mises? Nobody has ever shown any interest in him! Why not the diary of Hitler’s Minister of Propaganda, Joseph Goebbels, or letters of Albert Einstein and manuscripts of Immanuel Kant? What about original scores by Mozart? They even offered us the entire archive of the French secret police that the Nazis had captured when they occupied Paris in June 1940. But all we wanted was Ludwig von Mises.

In fact, we were the first Westerners to request and to actually look through Mises’ papers. The archive’s director at the time, Dr. Mansur Mukhamedjanov, said in his speech at Hillsdale College in March 1997: “The Ludwig von Mises Fund was accessible to researchers for several years. But from the time when the archive was declassified, not one researcher showed interest, looked into or worked with the materials of this fund.. . . Foreign researchers were interested in anything but Mises. Some of them probably saw the index and knew that such a fund existed. . . . But our careful records show that no researchers ever requested ‘Fund 623 – Ludwig Mises’ until Richard and Anna Ebeling.”

We came back to the United States with over 8,000 pages of photocopies from Mises’ collection. Shortly after our return, Liberty Fund of Indianapolis contacted me and expressed an interest in arranging for the translation and publication of a large selection of the “Lost Papers.” Two of three volumes in the series have already been published, with the last volume nearing completion, under the general title Selected Writings of Ludwig von Mises.

The Legacy of the “Lost Papers” of Ludwig von Mises

These thousands of pages of archival material, bring to light a new side of Ludwig von Mises. Here we see Mises as more than just the brilliant economic theorist demonstrating the unworkability of socialist central planning and the inherent contradictions of the interventionist state, or as the grand expositor of a universal theory of human action and the market process.

We see Mises as serious and methodical policy analyst in the twenty years between the two World Wars – one who explains how to save a society facing a hyperinflation by introducing an alternative currency in place of the debased government money; how to bring an economy out of a great depression; how to rein in an interventionist bureaucracy that is strangling a market economy; how to end foreign exchange controls that are distorting and hindering international trade; or how to construct a fiscal policy so it no longer stifles investment and capital formation.

In other words, the discovery of the “lost papers” of Ludwig von Mises lifts the veil from the life and work of this great free-market economist and advocate of liberty. Through these thousands of pages Mises emerges as even more influential and important than any of his strongest admirers have imagined.

  • Richard M. Ebeling is BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel in Charleston, South Carolina. He was president of the Foundation for Economic Education (FEE) from 2003 to 2008.