Austrian Economists as Denizens of the Popular Press
War and continued economic contraction underscore the reality that involvement in public affairs is crucial for the survival of liberty. As Mises wrote, "Economics must not be relegated to classrooms and statistical offices and must not be left to esoteric circles. It is the philosophy of human life and action and concerns everybody and everything. It is the pith of civilization and of man's human existence."
The main theorists of the Austrian tradition have put this principle into practice.
In 1923, a 24 year old F.A. Hayek wrote a letter to the editor of The New York Times in which he detailed incipient inflationary forces in Germany that had already devalued the mark to 1/500 of its value. "It is a matter of common knowledge," the young Hayek wrote, "that Germany's middle classes, including the small merchant and manufacturer, have lost almost everything."
While in itself not a striking letter, it does highlight what was to become a common trend throughout the darker periods of the 20th century: Austrian economists as denizens of the popular press.
While not particularly well known for their work in newspapers, Austrians from Mises to Machlup, Morgenstern to Hayek all made numerous appearances in the Wall Street Journal and The New York Times, among other well-known periodicals and newspapers. Through op-eds and letters to the editor, the Austrians helped to propagate ideas of economic sanity and liberty when socialism and economic planning were ascendant.
Henry Hazlitt, who had come under the influence of Mises in the 1930s, held a post as a daily editorial writer for the New York Times from 1934 to 1946, writing thousands of unsigned pieces (that they were his was revealed in Henry Hazlitt: A Giant of Liberty) as well as signed pieces in the book review section. While holding this position, he wrote what is the biggest selling Austrian book ever: Economics in One Lesson.
Hazlitt was instrumental in encouraging others to publish in the popular press. Mises had done so in Austria, and continued the practice after coming to the U.S. in 1940. In a series of letters to the editor of The New York Times, for example, Mises outlined the socialistic nature of the Nazi regime. In a 1942 letter, he wrote that in Germany, "Market exchange and entrepreneurship are thus only a sham. The government, not the consumers' demands, direct production; the government, not the market, fixes every individual's income and expenditure. This is socialism with the outward appearance of capitalism ¾ all-round planning and total control of all economic activities by the government."
The need to overcome economic nationalism through trade and commerce, an important theme throughout the work of Mises, was the subject of a 1943 letter to The New York Times. In this letter, entitled, "Super-National Organization Held No Way to Peace," Mises writes that, "The building up of a lasting union of the peace-loving nations is not a technical problem of conventions, constitutions and bureaucratic organizations. Economic nationalism cannot be eradicated by measures of a purely institutional character. What is needed is a radical change in political mentalities and social and economic mentalities." Liberalism, the embrace of capitalism and liberty, was undoubtedly the ideology Mises hoped for.
In a series of New York Times op-eds published in the 1950's, Oskar Morgenstern championed the capitalism of Hong Kong and noted the failings of the "third way" in Sweden. A 1954 piece entitled "Capitalist Oasis" details the remarkable progress made by the tiny island of Hong Kong, "a paragon of capitalist freedom."
What would be of particular interest to Austrians, and indeed was for Morgenstern, was the regulation of money, or lack thereof. "The money market is remarkable in that three private banks are still allowed to issue banknotes of their own, which constitute the local currency in circulation apart from government coins. There is no central bank, but whether because of this or in spite of this, the money system is very stable. Every currency can be transacted freely and there is no control over capital movements in and out."
In "We Must Control Credit," a 1947 letter to The New York Times, Mises essentially synthesizes his theory of credit creation and money into five paragraphs. "The emergence of a depression," he writes, "is the necessary outcome of endeavors to expand credit in order to lower the rate of interest, to make prices and wage rates rise and to finance Government expenditures." For those without the time, nor the intellectual capacity to read his "Theory of Money and Credit," this short work by Mises introduced to the layman the Austrian business cycle theory in an accessible form.
In a remarkable four-part series appearing in the Wall Street Journal beginning December 12, 1949 and ending four days later, Mises condensed his critique of socialism and addressed it to the masses. The four op-eds were published under the titles "The Socialist Society," "The Socialist Planner," "Socialism's Unique Problem" and "Socialism in Disguise."
For those already familiar with Mises's work, the articles offered nothing new, if only a re-acquaintance with the impossibility of socialist calculation. But one can hardly imagine the shock felt by an individual who, after opening his morning copy of the Wall Street Journal, reads the work of Mises for the first time. With irrefutable logic and economic clarity, Mises destroys one's faith in socialism.
Hayek, for his part, took to the offensive in articulating the ideas of freedom. In a response to Professor Harold Laski, appearing in The New York Times, on the question of "Is the World going to the Left?" Hayek reiterates the need for individual thought and freedom in the face of totalitarian pressures.
"The century from 1848 to 1948 will probably come to be known as the century of Socialist delusion, a century during which, as a result of sheer intellectual error, so much good-will was canalized into efforts which very nearly succeeded in destroying the values the people most wanted to preserve."
As for Mises's student Murray Rothbard, he wrote for just about any publication that would publish him. Indeed, his first publication was a letter to the New York Times and his last was an op-ed in the Washington Post. (See his complete bibliography.) Both his scholarly and popular writing offers keys to the influence of his ideas.
In Socialism, Mises wrote that, "Only ideas can overcome ideas and it is only the ideas of Capitalism and of Liberalism that can overcome Socialism. Only by a battle of ideas can a decision be reached."
Ideas of economic logic and clarity need not remain trapped in dusty tomes and esoteric academic journals. By working and disseminating ideas through the popular press, the Austrian economists have provided the front line of defense against statism and socialism.