The Last Knight of Liberalism

Chapter 22. Fragmentation of the Movement

1New York Times (June 21, 1956).

2 Already in 1956–1957, he had not felt well for many months. In May, at the end of the academic year, he looked forward to spending a long vacation in Austria and Switzerland. See Mises to M.E. Constantacatos, letter dated May 16, 1957; Grove City Archive: Constantacatos files.

3 Mary Sennholz has argued that Read was underestimated as an intellectual figure. See Leonard E. Read: Philosopher of Freedom (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1993).

4 Ernest C. Hasselfeldt, letter to the editor, Wall Street Journal (February 24, 1955); copy in Grove City Archive: NAM files.

5 See Sigmund Diamond, Compromised Campus: The Collaboration of Universities with the Intelligence Community, 1945–1955 (New York: Oxford University Press, 1992).

6 See Buckley’s mass-mailed letter, dated November 4, 1955; Grove City Archive: Buckley file. The letter contains no definition of “conservatism.”

7 Mises to Muthesius, letter dated October 3, 1957; Grove City Archive: Muthesius files.

8 Mises to John Belding Wirt, letter dated October 23, 1954; Grove City Archive: Conservatism files. See also similar statements in Mises to Richard Cornuelle, letter dated November 1, 1965; Grove City Archive: Richard Cornuelle file.

9 Mises, “Economic Freedom in the Present World,” Economic Freedom and Interventionism: An Anthology of Articles and Essays (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1990), chap. 47. See also Henry Hazlitt’s call for a change of the too “rigid” U.S. Constitution in his long letter to the editor of the New York Times (February 8, 1942); Grove City Archive: Hazlitt files. See also Henry Hazlitt, A New Constitution Now (New York: McGraw Hill, 1942)

10 Mises to Richard Ware, letter dated October 24, 1957; Grove City Archive: Earhart Foundation files.

11 Jeffrey A. Tucker, “Mises as Mentor: An Interview with George Reisman,” Austrian Economics Newsletter 21, no. 3 (Fall, 2001): 4.

12 Mises to Hayek, letter dated February 18, 1960; Grove City Archive: Hayek files. See also F.A. Hayek, The Constitution of Liberty (Chicago: University of Chicago Press, 1960), postscript.

13 Mises to Rand, letter dated January 23, 1958; unknown provenance. Before he read Atlas Shrugged (New York: Random House, 1957), Mises had not counted Ayn Rand among the foremost contemporary artists and philosophers. See Mises, Anti-Capitalistic Mentality (Princeton, N.J.: Van Nostrand, 1956), chap. 4, p. 2.

14 Rothbard to Mises, letter dated July 17, 1958; Grove City Archive: Rothbard files.

15 See Murray N. Rothbard, The Sociology of the Ayn Rand Cult (Port Townsend, Wash.: Liberty Publishing, 1987).

16 On Branden and Rand see Barbara Branden, The Passion of Ayn Rand (New York: Doubleday, 1987).

17 The symposium took place in 1959 at Emory University. The Volker Fund sponsored it. Helmut Schoeck, a professor of sociology at Emory, organized the event. Schoeck also wrote the most scathing indictment of the charges made against Rothbard. About Rand and Barbara Branden he said: “They clearly suffer from a serious case of what Sorokin (Fads and Foibles) calls the discoverer’s complex. They seem to think that they, the female innovators of unique ideas, were robbed by a bad male.” Schoeck’s letter to unknown recipient, dated August 13, 1958; Grove City Archive: Rothbard files.

18 Nymeyer to Lipsett, letter dated October 9, 1961; Nymeyer to Mises, letter dated December 27, 1961; Grove City Archive: Nymeyer files. Another organization that was very successful in selling Mises’s books was the Intercollegiate Society of Individualists.

19 Nathaniel Branden to Mises, letters dated January 16, 1961 and May 26, 1961; Grove City Archive: Branden files.

20 It goes without saying that he did not avoid socializing with (honest) socialists. Cases in point were the Bauers until their fallout with Mises in 1919, as well as his critic Carl Landauer, whom he probably met in 1952 in Berkeley. See Landauer to Mises, letter dated June 16, 1952; Grove City Archive: Ernest Offen file. And he wrote letters of recommendation for interventionist professors. See for example the letter he wrote for Alexander Kokkalis, dated January 4, 1954; Grove City Archive: Kokkalis file.

21 Yeager to Mises, letter dated June 26, 1955; Grove City Archive: Buck Hill Falls file.

22 Nathaniel Branden to Mises, letter December 15, 1961; Grove City Archive: Branden files.

23 It was not their first personal meeting. They also met in early July 1961 and they discussed “the problems which we both consider as vital.” Mises to Rand, letter dated July 10, 1961; Grove City Archive: Rand file. It is possible they stayed in touch in the 1960s. In June 1970, Mises promised his Mexican friend Velasco that he would talk to her about him and his work. See Mises to Velasco, letter dated June 27, 1970; Grove City Archive: Rand file.

24 For example, Mises did not believe that scientific value theory could establish an objective ranking of choice alternatives. He also had recently asserted in print that the essence of art and beauty is “that which pleases.” See Mises, Theory and History: An Interpretation of Social and Economic Evolution (New Haven, Conn.: Yale University Press, 1957), p. 62. On the other hand, he certainly did agree with Rand’s writings in most other respects. In correspondence with Muthesius he said that Ayn Rand was the most energetic opponent of anti-trust policy. See Mises to Muthesius, letter dated March 22, 1962; Grove City Archive: Muthesius files.

25 Mises to Russell Kirk, letter dated July 5, 1962; Grove City Archive: Branden files. See also Hazlitt, to Kirk, undated letter; Grove City Archive: Hazlitt file # 9.

26 Kirk to Mises, letter dated July 13, 1962; Grove City Archive: Kirk file.

27 For the list of the beneficiaries of membership subscriptions, see Hazlitt to Mises, letter dated December 21, 1953; Grove City Archive: Mont Pèlerin Society files.

28 Mises named among the French economists: (1) Louis Baudin, (2) Daniel Villey, (3) François Trevoux, and (4) Bertrand de Jouvenel; among the British: (1) Jewkes, (2) Plant, and (3) Dennison; as well as the Irishman Duncan. See Mises to Richard Cornuelle, letter dated June 4, 1954; Grove City College Archive: Mont Pèlerin Society files. Mises did not attend the Venice meeting because he had to undergo gallbladder surgery. Two years later, he approved the funding of Coase, Nutter, Alchian, Philbrook, and Yeager. See Mises to Luhnow, letter dated December 7, 1956; Grove City College Archive: Mont Pèlerin Society files.

29 “There are within the Mont Pèlerin Society, on the whole, two antagonistic camps: the laissez-faire liberals... and the neoliberals.... Everybody knows that.” Albert Hunold, “How Mises Changed My Mind,” The Mont Pèlerin Quarterly III, no. 3 (October 1961): 17.

30 Hamilius to Mises, letter dated February 26, 1952; Grove City Archive: Hamilius files. At that point Hamilius was 29 years old.

31 He also suggested invitations for Fertig, Cortney, and Nymeyer. These three men were admitted as new members in a Council meeting of Hayek, Rappard, Jitta, Mises, and Hunold. See Mises to Hunold, letter dated June 26, 1953, and the protocol of the Council meeting of September 9, 1953; Grove City Archive: Mont Pèlerin Society files.

32 Hamilius to Mises, letter dated October 11, 1953; Grove City Archive: Hamilius files.

33 His contribution was eventually published under the title “market.” See Mises, “Markt,” Handwörterbuch der Sozialwissenschaften (Stuttgart: Gustav Fischer, 1959), part 27, pp. 131–36. He delivered the work before the end of March 1955. The publishers “improved” his article after having received the proof pages from him. See Mises to Hermann Bente, letter dated January 15, 1960; Grove City Archive: “B” file. A translation of this piece by Edmund A. Gibson is in Grove City Archive: “G” file. See also Haberler’s letter dated May 19, 1953 in Grove City Archive: Haberler file.

34 Mises to Muthesius, letter dated June 1, 1955; Grove City Archive: Muthesius files. It must be said, however, that he supported them whenever common ground could be found. Thus in June 1950, he recommended the translation of Röpke’s textbook Die Lehre von der Wirtschaft to the University of Chicago Press. See correspondence in Grove City Archive: Röpke files.

35 Muthesius, who was based in Frankfurt am Main, ran two successful journals: Zeitschrift für das gesamte Kreditwesen and Monatsblätter für freiheitliche Wirtschaftspolitik.

36 Hellwig to Mises, letter dated January 12, 1962; Grove City Archive: Hellwig file. Hellwig had expressed such views in published writings from 1955 onwards. In a piece for Muthesius’s journal, he had argued that antitrust policies were counterproductive and that the champions of such policies—most notably Eucken, Miksch, and Böhm—could therefore not properly be called classical liberals. Moreover, he had the indelicacy to point out that Böhm’s and Miksch’s monographs had been published in the Nazi era, and could only have been published at the time because the Nazis did not perceive neo-liberalism as a fundamental threat. On the contrary, quite a few of them took a liking to the idea of government imprinting its “order” on competition. Hellwig knew what he was talking about: he had been a Berlinbased journalist during those very years. But Walter Eucken’s widow, Edith, and Wilhelm Röpke protested with great vehemence and recrimination to Muthesius for publishing such politically incorrect views. Mises sided with Muthesius. See the May 1955 correspondence in Grove City Archive: Muthesius file.

37 Mises to Hellwig, letter dated January 19, 1962; Grove City Archive: Hellwig file. Mises also knew well the pro-inflationist views of Erhard’s undersecretary of the economy, Alfred Müller-Armack. In 1932, Müller-Armack had published a book amplifying the case for inflation presented by Joseph Schumpeter. He had argued that credit expansion had the character of a self-fulfilling anticipation of growth. See Alfred Müller-Armack’s Entwicklungsgesetze des Kapitalismus (Berlin: Juncker & Dünnhaupt, 1932).

38 Hayek to Mises, letter dated October 25, 1955; Grove City Archive: Hayek files.

39 A few months later he wrote: “I hope that this year’s Mont Pèlerin meeting will be more interesting than the Berlin meeting.” Mises to Pierre Goodrich, letter dated April 3, 1957; Grove City Archive: Goodrich files. Goodrich’s company (Indiana Telephone Corporation) issued annual reports highlighting the consequences of the ongoing inflation for the American economy and for corporate accounting (the problem of “illusory profits”). Mises liked them very much and urged Goodrich to seek wider circulation of his message.

40 See Hayek’s circular letter dated November 27, 1956; Grove City Archive: Hayek files.

41 In the early 1950s, the American libertarians tried to hold a Mont Pèlerin Society meeting in the United States, but for financial reasons (the Europeans had no money) this project materialized only in 1958, when Jasper Crane managed the fundraising. The outbreak of tensions at the Princeton meeting is stated in Hunold to Röpke, letter dated April 4, 1960. About that time, Mises’s student from his Geneva years, Stefan Possony, had difficulties being accepted into the society. See his inquiry in a December 1958 postcard to Mises; Grove City Archive: “P” file.

42 Bettina Bien Greaves, Austrian Economics: An Anthology (Irvington-on-Hudson, N.Y.: Foundation for Economic Education, 1996), pp. 77–82. A digital file of the audio is available at http://www.Mises.org/Media/.

43 See the correspondence in the Cortney, Fertig, Hunold, and Leoni files. Hunold presented his view on the events before the Kassel meeting in a letter to Röpke, dated April 4, 1960, a copy of which he also sent to Mises. Hayek then declared in another open letter, dated July 3, 1960, that Hunold’s replacement as secretary of the Society would be the most important task of the forthcoming general meeting. After careful examination of the evidence, Röpke became more and more convinced that several of Hayek’s charges against Hunold were baseless and that, on the contrary, Hayek himself had occasionally overstepped the bounds of his authority. Hunold in turn believed that Hayek had come under the bad influence of Machlup and others (Friedman?) who sought to abuse the Society for their personal purposes. After the Turin meeting, member Wolfgang Frickhöffer concurred; he had the impression that a group around Friedman had poisoned the atmosphere with intrigue and pettiness. In early January 1962, Bruno Leoni presented his negative experiences with Röpke and Hunold in an open letter to all Mont Pèlerin Society members. See Grove City Archive: MLS files. And he went into more (ugly) detail in a confidential letter to Koether, which of course reached Mises. See Leoni to Koether, letter dated October 14, 1961; Grove City Archive: Leoni file.