On Freedom and Free Enterprise: Essays in Honor of Ludwig von Mises

If Carl Menger may be called the father of the Austrian School of economic thought, Ludwig von Mises is his most famous descendant. Since the beginning of the first decade of this century, it is he who has combined and greatly developed the economic teaching of Menger, Böhm-Bawerk, and Wieser. But while his great predecessors lived and wrote at a time in which the growing forces of socialism and interventionism were just gathering to assault the capitalist social and economic order, Ludwig von Mises witnessed their offensives and triumphs. Surrounded by hostile forces and often alone, he refused to surrender. With his great courage and power of reasoning he counterattacked, always bearing the brunt of the battle. For almost half a century he has been the rallying-point for the forces of freedom and free enterprise, and for the courageous remnants of liberalism.

Ludwig von Mises was born on September 29, 1881, in Lemberg in what was then Austria-Hungary. Together with his younger brother Richard, who lived to become a great mathematician, he received a thorough education. From 1892 to 1900 he attended the “Akademische Gymnasium” in Vienna to prepare himself for the university. Upon graduation he studied law and economics at the University of Vienna. On February 20, 1906, the University conferred upon him the degree of Doctor of Law and Social Sciences, or, as the traditional Latin title goes, of Both Laws, i.e., of Roman and Canon Laws. In commemoration of this event in the life of Ludwig von Mises some of his friends and disciples have prepared this volume the title of which indicates his greatest concern: freedom and free enterprise.

After a short occupation with the administration of justice, his increasing interest in social and economic matters induced him to accept the position of economic adviser of the Austrian Chamber of Commerce. For almost thirty years he endeavored to stem the tide of interventionism and socialism from this post, until Austria became a part of the German Reich. And for more than two decades he taught the economics of free enterprise at the University of Vienna until he left for Geneva, Switzerland, to become professor of international economic relations at the Graduate Institute of International Studies.

The political and economic world changed rapidly and materially during this period. The forces of interventionism and economic nationalism gnawed at the foundation of the Austro-Hungarian monarchy which had united the smaller nations in Central Europe and on the Balkan Peninsula in peaceful coexistence and cooperation. Undermined and weakened by the ideology of interventionist dissension and conflict, the Union finally collapsed on the occasion of its military defeat in World War I. Ludwig von Mises witnessed this grave hour of his nation as a captain of the Austrian artillery.

As early as 1912 Dr. von Mises had vigorously opposed those doctrines whose application was bound to destroy Austria-Hungary and peace and prosperity in Europe. In his book on the Theorie des Geldes und der Umlaufsmittel he had exploded the most important economic element in the rising ideology of destruction: inflationism. His inquiry into a field which his predecessors had largely neglected drew upon it passionate attacks by the advocates of government spending and omnipotence. But the events during the ensuing decades bore out the validity of his keen criticism. His book is as revealing and significant for the student of present-day political and economic phenomena as it was more than four decades ago.

At the end of World War I collectivism triumphed in large parts of Europe. Nationalism and socialism were the accepted ideologies, and liberalism and capitalism were decried as the sources of all vice and evil. To Ludwig von Mises these notions merely constituted “a revolt against reason” and a denial of two hundred years of economic thought. In his two books, Nation, Staat und Wirtschaft, which is a restatement of his liberal convictions and a devastating analysis of collectivism, and in Die Gemeinwirtschaft, which is a comprehensive critique of socialism, he uncompromisingly attacked and rejected the prevailing ideologies and their disastrous application by governments. In nearly every respect he ran counter to the main stream of contemporary thought.

In Austria he was fighting a losing battle. In spite of his prodigious labor and relentless counterattacks, the cause of freedom and free enterprise failed to hold its ground. In 1934 he left for Geneva to occupy a chair at the Graduate Institute of International Studies. In the Swiss atmosphere of peace and serenity he observed the rise of nationalist-socialist Germany and the outbreak of World War II. It is here that Professor von Mises wrote his magnum opus, Nationalökonomie, Theorie des Handelns und Wirtschaftens, which is a comprehensive treatise on economics. Its revised American edition is known under the title Human Action. His disciples hail it as “the most uncompromising and most rigorously reasoned statement of the case for capitalism that has yet appeared.” For a theoretical treatise of its size it has attained a remarkable circulation.

In 1940 Ludwig von Mises immigrated to the United States where he had spent some time twice before. In 1926 he was a visiting professor sponsored by the Lama Spellman Rockefeller Foundation, and in 1931 he attended the Congress of the International Chamber of Commerce in Washington, D.C. Now he came to stay and make America his country of choice. He continued to write and lecture. His book, Omnipotent Government, is a most penetrating history of the rise and fall of Germany during the last one hundred years. It analyzes the collapse of German liberalism and its substitution by the ideologies of nationalism and socialism. Since 1945 he has been lecturing as a visiting professor of economics at the Graduate School of Business Administration of New York University. It is here that his young disciples gather for discussions and seek his inspiration and guidance which his seminars have been providing for over forty years.

Ludwig von Mises’ work and influence will be judged by the economic historians of future generations. His contemporaries at first were inclined to ignore or scoff at the writings of this “reactionary” Viennese professor. There was no place, no recognition for him in this era of “new economics.” But he never hesitated to point out that the collectivist road chosen by modern governments was bound to lead to further economic distress and infringement upon man’s liberty. Again and again he correctly anticipated the ultimate outcome of socialist and interventionist measures. While the large majority of people continued to clamor for more intervention to cure prior intervention, an ever-widening circle of scholars and writers began to recognize the cogency of his teaching. His influence on contemporary social and economic thought has been growing constantly. Today his writings are familiar to the liberal schools in various countries. He has lectured at universities and other learned institutions in Great Britain, Germany, the Netherlands, France, Italy, Mexico, and Peru. Indeed, he has been incessantly exerting his great strength and ability that the truth be known. When the nations once again prefer reason and freedom to instincts and bondage, every student cannot fail to recognize the invaluable service Ludwig von Mises has been rendering to the social sciences.

In their New York City apartment, Dr. and Mrs. von Mises, who has been his inseparable companion and indefatigable collaborator since the days of Geneva, are the frequent hosts to libertarian friends and scholars from many parts of the world. The authors of this volume sincerely hope and wish that they will be with us and further guide us through their wisdom and example for a long time to come.

MARY SENNHOLZ