The Essential von Mises

Some months back, I wrote about “The Quotable Mises”, a collection of quotes from various books and articles by Ludwig von Mises (if you blog on your own domain, or have a personal website of some kind, you can visit the Mises site and get the code to display random quotes on your site).

Time to write about another interesting book – “The Essential von Mises”. It is made up of two lengthy essays written by Murray Rothbard on the life and work of von Mises. For all his brilliance, the world of academia did not see it fit to grant him a paid professorship neither in Austria nor in the US. He therefore held a full time job and wrote his treatises in his spare time. Rothbard writes-

On the publication of his two books in economic history and on the receipt of his doctorate in 1906, Mises ran into a problem that would plague him the rest of his life: the refusal of academia to grant him a full-time, paid position. It boggles the mind what this extraordinarily productive and creative man was able to accomplish in economic theory and philosophy when down to his mid-50s, his full-time energies were devoted to applied political-economic work. Until middle age, in short, he could only pursue economic theory and write his extraordinary and influential books and articles, as an overtime leisure activity. What could he have done, and what would the world have gained, if he had enjoyed the leisure that most academics fritter away? As it is, Mises writes that his plans for extensive research in economic and social history were thwarted for lack of available time. He states wistfully that “I never found opportunity to do this work. After completing my university education, I never again had the time for work in archives and libraries.”


But it remains an ineradicable blot on the record of American academia that Mises was never able to find a paid, full-time post in any American university. It is truly shameful that at a time when every third-rate Marxoid refugee was able to find a prestigious berth in academia, that one of the great minds of the twentieth century could not find an academic post. Mises’s widow Margit, in her moving memoir about life with Lu, records their happiness and her gratitude that the New York University Graduate School of Business Administration, in 1945, appointed Mises as Visiting Professor teaching one course a term. Mises was delighted to be back at university teaching; but the present writer cannot be nearly as enthusiastic about a part-time post paying the pittance of $2,000 a year. Mises’s course was, at first, on “Statism and the Profit Motive,” and it later changed to one on “Socialism.” This part-time teaching post was renewed until 1949.

Harold Luhnow, of the William Volker Fund, took up the crusade of finding Mises a suitable full-time academic post. Since obtaining a paid position seemed out of the question, the Volker Fund was prepared to pay Mises’s entire salary. Even under these subsidized conditions, however, the task was difficult, and finally New York University Graduate School of Business agreed to accept Mises as a permanent “Visiting Professor,” teaching, once again, his beloved graduate seminar on economic theory. Mises began teaching his seminar every Thursday night in 1949, and continued to teach the seminar until he retired, still spry and active twenty years later, at the age of 87, the oldest active professor in America.

Even under these favorable financial conditions, NYU’s support for Mises was grudging, and only came about because advertising executive and NYU alumnus Lawrence Fertig, an economic journalist and close friend of Mises and Hazlitt, exerted considerable influence at the university. Fertig, in fact, became a member of the NYU Board of Trustees in 1952. Even so, and even though Mises was allowed to supervise doctoral dissertations, he still carried the stigma of “Visiting Professor.” More important, after Dean G. Rowland Collins, an admirer of Mises, retired, succeeding Deans did their best to undercut student registration in Mises’s courses, claiming that he was a reactionary and Neanderthal, and that his economics was merely a “religion.”

The Mises blog posted a high-res scan of the book’s cover in one of their posts, which you can find here (about 4mb).

The Essential von Mises (Cover)

The Essential von Mises (Cover)

A further selection from the book-

The 1920s thus saw Ludwig von Mises become the outstanding critic of statism and socialism and champion of laissez-faire and the free-market economy. But this was still not enough for his remarkably creative and fertile mind. For Mises had seen that economic theory itself, even in its Austrian form, had not been fully systematized nor had it completely worked out its own methodological foundations. Furthermore, he realized that economics was more and more coming under the spell of new and unsound methodologies: in particular of “institutionalism,” which basically denied economics altogether, and of “positivism,” which increasingly and misleadingly attempted to construct economic theory on the same basis as the physical sciences. The classicists and the older Austrians had constructed economics on the proper methodology; but their specific insights into methodology had been often haphazard and unsystematic, and hence they had not established a methodology explicit or self-conscious enough to withstand the new onslaught of positivism or institutionalism.

Mises proceeded to forge a philosophical groundwork and methodology for economics, thereby fulfilling and systematizing the methods of the Austrian School. These were first developed in his Grundprobleme der NationalYkonomie (1933) (translated much later, in 1960, as Epistemological Problems of Economics). After World War II, when institutionalism had faded away, and positivism had unfortunately totally captured the economics profession, Mises further developed his methodology and refuted positivism in his Theory and History (1957), and The Ultimate Foundation of Economic Science (1962). Mises set himself in particular against the positivist method, which sees men in the manner of physics, as stones or atoms. To the positivist, the function of economic theory is to observe quantitative, statistical regularities of human behavior, and then to think up laws which could then be used to “predict” and be “tested” by further statistical evidence. The positivist method is of course uniquely suited to the idea of economies being governed and planned by “social engineers,” who treat men as if they were inanimate physical objects. As Mises writes in the preface of Epistemological Problems, this “scientific” approach would

… study the behavior of the human beings according to the methods Newtonian physics resorts to in the study of mass and motion. On the basis of this allegedly “positive” approach to the problems of mankind, they plan to develop “social engineering,” a new technique that would enable the “economic tsar” of the planned society of the future to deal with living men in the way technology enables the engineer to deal with inanimate materials. (Page v.)

Mises developed his contrasting methodology, which he called “praxeology,” or the general theory of human action, out of two sources: (1) the deductive, logical, individualistic analysis of the classical and Austrian economists; and (2) the philosophy of history of the “Southwest German School” at the turn of the twentieth century, notably Rickert, Dilthey, Windelband, and Mises’ friend, Max Weber. Essentially Misesian praxeology rests its foundation on acting man: on the individual human being not as a stone or atom that “moves” in accordance with quantitatively determined physical laws, but who has internal purposes, goals or ends which he tries to achieve, and ideas about how to go about achieving them. In short, Mises, in contrast to the positivists, affirms the primary fact of human consciousness—of the mind of man which adopts goals and attempts to achieve them in action. The existence of such action is discovered by introspection as well as by seeing human beings in their activity. Since men use their free will to act in the world, their resulting behavior can never be codified into quantitative historical “laws.” Hence it is vain and misleading for economists to try to arrive at predictable statistical laws and correlations for human activity. Each event, each act, in human history is different and unique, the result of freely acting and interacting persons; hence, there can be no statistical predictions or “tests” of economic theories.

If praxeology shows that human actions cannot be pigeonholed into quantitative laws, how then can there be a scientific economics? Mises answers that economic science, as a science of human action, must be and is very different from the positivist model of physics. For, as the classical and Austrian economists showed, economics can begin by grounding itself on a very few broadly true and evident axioms, axioms arrived at by introspection into the very nature and essence of human action. From these axioms, we can derive their logical implications as the truths of economics. For example, the fundamental axiom of the existence of human action itself: that individuals have goals, act to attain them, act necessarily through time, adopt ordinary scales of preference, and so on.

Sometimes, one wonders about the relevance of people like Mises, and ideas like freedom, in a crooked and decaying world. From personal experiences – both off line and online – over the past many years, I can say that people simply do not care for trifles like freedom, or for their advocates. I guess Mises was aware of the fact- “The struggle for freedom is ultimately not resistance to autocrats or oligarchs but resistance to the despotism of public opinion.”

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