The Free Market

Home | Mises Library | Memoirs of Ludwig von Mises

Memoirs of Ludwig von Mises

The Free Market

Tags BiographiesHistory of the Austrian School of Economics

05/01/1987William H. Peterson

The Free Market 5, no. 5 (May 1987)


I look back with special pleasure and deep respect on that giant of our age, Ludwig von Mises (1881–1973). How he shone in his students' lives and minds, gently schooling us in the meaning of human action and the free market.

Today we glory in the truth of Misesian economics, and marvel at his lonely and courageous struggle against heavy odds. As the 20th century's uncompromising defender of laissez-faire economics and human liberty, and as the leader of the Austrian school, his spirit is still very much alive—and growing more influential day by day.

I was privileged to take three courses from Lu Mises at New York University's Graduate School of Business Administration in the early 1950s: "Socialism and the Profit Systern," "Government Control and the Profit System," and "Seminar in Economic Theory." So eye-opening were they that I continued to participate in his seminar even after graduating and joining the faculty myself.

In these courses he developed a theory of individual action and the indispensability of freedom in the marketplace. He focused on social cooperation springing from individual action, which came from the human condition, subjective valuations, and limited means.

Man is a unique being, Mises said, because he alone has a vision of the future, possesses abstract reasoning power, integrates thought and action, and acts with particular purposes in mind. Simplistic notions like Homo economicus miss the richness of Misesian economics.

Mises's seminar, first held in the Wall Street area and later on Washington Square, always attracted his great students like Murray N. Rothbard, Henry Hazlitt, Lawrence Fertig, Israel Kirzner, Ralph Raico, Hans Sennholz, Leonard Liggio, and many others. Sometimes a graduate student would ask a less-than intelligent question, but Mises would always respond with kindness and understanding. One such question in the 1960s followed his discussion of the inflationary implications of deficit finance, in which a student asked why President Johnson couldn't have both "guns and butter." Mises smiled and replied: "Ah, President Johnson can have both," but added with a twinkle in his eye, "if he is willing to pay for them."

Because of Mises's uncompromising stand for liberty, the rest of the business school faculty and NYU itself isolated him. They dismissed him as an ideologue and an iconoclast. But Mises was always a very tolerant and courageous man. Although attacked by other people in the department and in the profession, Mises continued to read, study, teach, and write—quite content all the while.

Sometimes Lu and Margit would invite my wife Mary and me, and sometimes our children, to dinner at their warm and lovely apartment on West End Avenue. There we enjoyed the company of the Fertigs, Hazlitts, Reads, Petros, and others. The parties were always sparkling affairs, graced with the enchanting beauty of Margit and the courtly charm of Lu.

When the Mont Pelerin Society met, Mises's students were always among those attending, including EA. Hayek, Gottfried Haberler, Fritz Machlup, and Wilhelm Roepke. Also attending were scholars who had read and admired Mises's writings—men like James Buchanan, W. H. Hutt, George Stigler, Gordon Tullock, Warren Nutter, and many others.

Mises's courage and integrity showed at one meeting when he expressed concern that some of Mont Pelerin members were becoming infected with the virus of interventionism, approving of State ownership of transport, government social insurance, minimum wage laws, countercyclical policy, and other interventions.

One member asked, "But what would you do if you were in the position of our French colleague, Jacques Rueff," who was present at the meeting and responsible for the fiscal administration of Monaco. "Suppose there were widespread unemployment and hence famine and revolutionary discontent in the principality. Would you advise the government to limit its activities to police action for the maintenance of order and protection of private property?"

Mises stood fast: "If the policies of nonintervention prevailed—free trade, freely fluctuating wage rates, no form of social insurance, etc.—there would be no acute unemployment. Private charity would suffice to prevent the absolute destitution of the very restricted hardcore of unemployabIes." 

The academic world did not take kindly to Ludwig von Mises. Many economists felt he was too impolitic, too adamant, too pure, too uncompromising. Then, like now, the conventional wisdom was in fashion.

Because of his staunch adherence to liberty, Mises never held a regular professorship at the University of Vienna. And it was no different in America. He was a "visiting professor" at New York University for 24 years, with his modest salary paid not by the university but by foundations and friends.

His prolific writings and magnificent contributions to economics were largely ignored by the profession. Among these contributions, he pulled together monetary theory and the theory of marginal utility, proved that socialism cannot calculate rationally and therefore couldn't work, and systematically developed the science of economics as a major subset of the science of human action, praxeology.

Mises set an example for us. He held that it is the duty of everyone to read, think, and speak about the importance of freedom. The preservation of civilization depends upon it. Lu Mises would be happy to know that the torch he lit is burning brighter than ever.


William H. Peterson

William H. Peterson (1921-2012) was the winner of the 2005 Schlarbaum Prize for Lifetime Achievement in the Study of Liberty. He was an adjunct scholar of the Mises Institute and distinguished Lundy professor emeritus of business philosophy at Campbell University in North Carolina. A "Tribute to Mises's Student and Colleague William H. Peterson" panel was held at AERC 2018.

Cite This Article

Peterson, William H. "Memories of Ludwig von Mises." The Free Market 5, no. 5 (May 1987): 1, 3–4.

Shield icon library