Tuesday, September 29, 2015

Happy birthday Ludwig von Mises - Economist Extraordinaire

Ludwig von Mises would be 134 today. The grandson of an East-European (Galicia) cum Austrian rabbi in a rabbinic dynastic family which became prominently involved in finance and was ennobled by Austro-Hungarian emperor. He studied economics at the University of Vienna with teachers from the original Austrian School of Economics founded by Carl Menger. He was always swimming against the stream of political short-sightedness in a turbulent age. He was advisor to the minister of finance in Austria in the inter-war period and helped Austria avoid the ravages of hyperinflation. He was economist to the Chamber of Commerce in Austria and, though always controversial, was quite influential.

With rise of the Nazis, he was personally targeted as they advanced into Austria with the signing of the Anschluss – he was a Jew and a prominent liberal (in the true European sense). He fled literally hours before they arrived for him. After a few years in Switzerland, during which time he wrote his famous Nationale Ekonomie, he was persuaded to leave for the United States (people feared that the Nazis would invade Switzerland). He lived the rest of his life in New York. He remained a visiting professor at NYU for that time. In both New York and Vienna he had weekly seminars. In Vienna these were attended by many of the most prominent scholars of the time. His junior colleague Friedrich Hayek had gone to London in the 1930’s and won the Nobel prize in 1974. Mises died at the age of 93 in 1973. During his years in America he wrote profusely – in English – including the English version of his Nationale Ekonomie, Human Action.

When the Nazis arrived at his apartment in Vienna they packed up his voluminous library, including some of his work and work-in-progress, and put it in storage. Years later my friend and colleague Richard Ebeling, who had married Anna who is Russian, discovered Mises’s library in Moscow – the Russians had shipped it back from Vienna. Richard has now compiled, translated and published three volumes of Mises’s hitherto unknown early papers, which provide a precious account of the economics of the interwar years.

It is hard to overstate the magnitude of Mises’s intellect and his achievements. He was one of the greatest economists ever, and maybe the greatest. For him economic knowledge was indispensable to the understanding of civilization and economic ignorance was more than regrettable, it was positively dangerous, a matter of the life and death of civilization.

"The body of economic knowledge is an essential element in the structure of human civilization; it is the foundation upon which modern industrialism and all the moral, intellectual, technological, and therapeutical achievements of the last centuries have been built. It rests with men whether they will make the proper use of the rich treasure with which this knowledge provides them or whether they will leave it unused. But if they fail to take the best advantage of it and disregard its teachings and warnings, they will not annul economics; they will stamp out society and the human race." (Human Action)

No comments: