History of the Austrian School of Economics

The fascinating history of this great body of thought, through all its ebbs and flows, is the story of how great minds can advance science and oppo

The Frederick L. Maier Lecture, recorded at Mises University 2007.

Birth: By the late 1940s, Mises was recognized in libertarian centers, but overnight in 1949 he became a central intellectual figure by his publication of Human Action.

This work of six years of labor appeared in 1940. It was the predecessor to Human Action published nine years later. Epistemology and value theory were the two central problems.

Arriving in New York in 1940, Mises found many friends from Geneva there, but no income or assets at the age of 59. Mises began writing in English. During this time, Leonard Read created FEE – the Foundation for Economic Education- which later on turned into a forum for Austrian economics.

Mises left Vienna for six years in Geneva, 1934 – 1940, to write his treatise and leave behind the Austrian branch of the Nazi Party. In Geneva, Mises held the Chair for International Relations.

Mises was in his prime from 1920-1934 while he was 39-53 years old. Three main areas in these years were certain people, his intellectual contributions, and other work.

Mises was not surprised by WWI, 1914-1920.  He was posted on the Northern Front of the Austro-Hungarian towns as a Lieutenant in an artillery unit.

This 1912 book is Mises’ first great theory. Mises agreed with Menger about the spontaneous emergence of money. No government is needed. Mises used a logical proof called the regression theory. It explained why money is demanded in its own right.

Carl Menger (b. 1840) dared to create something he called the Austrian School of Economics. His was a new way of doing economic analysis. He sided with Aristotle’s realism.