Ladies and gentlemen, Mrs. Mises, Hayek, Professor Hayek, Dean Kelly, on behalf of the GBA Economics Department, I welcome you all.
Unfortunately, one of the really co-sponsors and one of the people thought up of this, I think, very happy occasion, unfortunately can't be with us today.
Dean Taggart asked me to express his very deep regrets that he was unable to be here this afternoon, but as you see, Dean Kelly has honored us with his presence.
The high point, I hope, of this little get-together is to ask one of our most illustrious and I would guess our most senior colleague, if he wouldn't give us a few words, some reminiscences, about his days at the University of Vienna.
What may make this especially interesting, I don't know if it was arranged this way,
but our speaker's most famous pupil, I think, is with us today, Professor von Hayek of the University of Chicago.
Our speaker came to us in February of 1945.
and been with us a long time, we hope he'll be with us a long time more.
Today, he's going to tell us a little bit about his days back in what perhaps he may call the old country, I don't know.
And after he finishes, he will welcome a few questions if you have any.
It's with great pleasure that I present Professor von Mises.
Thank you very much, Professor, and I want to thank Dean Taggart, who is absent for the kind invitation.
Mostly, in talking about economics in Vienna and Austria, one uses the term Austrian school.
And many people misunderstand the meaning of the term, believing that there was a special
economic school in Vienna, an organized institution in the way in which we have law schools, for
instance.
Now, the fact is this that the term school in connection with the Austrian economics
means merely a certain trend in doctrines. It is a doctrinal term and it was given originally
to these economists, to this small group of Austrian economists, by their adversaries in
Northern Germany, the German Reich, and it was given with a pejorative meaning, you know.
It was certain contempt when the term was first used in the 80s of the 19th century in Germany
against the Austrians.
This is a great difference as against the name given to the two other Austrian groups
or groups that originated from Austria or Vienna, who are internationally known as scientific groups.
These two other groups choose themselves their name.
One is the psychoanalytical movement,
and the other is the so-called Vienna Circle or logical positivism that in fact today dominates
the teachings of philosophy in the universities of the Anglo-Saxon countries.
Not in France, not so much in France, but first of all in England and in the United States.
Now what all these three groups have in common is that they were not, as people sometime
may assume that they were not very popular with the authorities of the official Austrian
hierarchy of teaching and learning.
All universities in Central Europe, continental Europe, are state universities.
Even the idea that a university could be a private institution is foreign to most of these countries.
And the universities are operated by the government and, of course, there is a fundamental difference between these universities and the other governmental institutions.
The difference is academic freedom. Academic freedom means that while all government employees
and functionaries of the government are bound to obey in the exercise of their functions
Strictly what has been ordered to them by their superiors, the teachers at the universities,
all teachers at the universities and schools of the same rank, technological universities
and today also commercial universities, are government employees who have no superior.
They, nobody, not even the cabinet member representing the duties of the supreme manager
and the teacher of instruction has the right to interfere in any way with their teaching.
This is of very great importance, of course, because there were in these countries again
and again tendencies to influence the teaching of war and still more the teaching of economics
and political science, social sciences in general.
Now, the important fact was that these three groups about which I spoke and I don't want
to issue any judgment or value about psychoanalysis or about logical positivism.
I am an economist and do not deal with these problems, but I want to say all these three
Three schools had one thing in common. They were, at least in the post-war period, represented
not by the professors appointed to teach, but by the privato-cents. A privato-cent,
A private center is an institution that is unknown to the universities in the Anglo-Saxon countries.
A private center is a man admitted as a private teacher at a university.
He does not receive any payment on the part of the government.
He has the practically very unimportant right to get the fees paid by the students.
For most of the privates in Vienna, it made about the equivalent of $5 a year or $10 a year.
Therefore, he had to find some other way and means of making a living, and he was practically free to do what he wanted.
Now, when I came back from the war, I was admitted as a privata sent one year or 15 months
before the outbreak of the First World War. The war interrupted for many years my teaching.
And when I came back, I found that there were many young men very much interested in the
study of economics and that they wanted not only to pass the examinations, they wanted
to become an economist and to contribute something to the teaching and to the research work in the field of economics.
In one regard, the preparation that the students in Austria got
But for economic and legal studies, which were combined at the university, was very unsatisfactory.
In this regards the study of modern languages, the Austrian gymnasium, like the gymnasium of the other Europe,
and the Lycée in France and the Gymnasium in Germany gave rather good instruction in
Greek and Latin, but the modern languages were neglected. And during, those people who
who knew French or English had acquired their knowledge privately. During the war, this
was not so easy. And after the war, the young men who came to my seminar, they had a privata
were practically not familiar with any foreign language.
A professor, one of the men who today teaches at one of the best known and biggest American universities,
tells me every time I meet him,
Do you remember, when you gave me a list of books for paper, I had to prepare for your seminar,
and in this list dominated English language books.
And I told you that these are English books, and then you answered,
I had already at that time, immediately after the war, I had already also my first American student.
This American student came to Vienna not as a private citizen.
He came as a lieutenant in the American army as the aide-de-camp of other American civilians
who had the rank of the coronel and all the men, and who had in Vienna an assignment of
which he practically didn't know what to do.
The Colonel had a lot of leisure time and the young man who was his assistant had still
more leisure time and he decided to use this leisure time in a way that would make it possible
for him to bring back to the United States, to Harvard University, after his return from
the Army, already ready-made doctoral dissertation.
And he wrote his doctoral dissertation in my seminar, as you want to say, on taxation,
direct taxation in Austria.
There was a lot to learn from Austria for Americans at that time because the Austrians
had by far exceeded the American experience of the income tax and the corporation tax.
In the United States, the income tax was at that time very new.
In Austria it had already a history of 100 years and this young man is today also a retired
professor, Professor van Sickle from Babes College, very well known author of books.
At the university I had two hours a week, a seminar, once a week, but very soon this method
appeared as impractical because in the seminar there were students who had already acquired
a very good knowledge of economic problems and wanted to make research work, serious
Research Work, and then there were younger students, and so I started very soon something
which is considered at the German and French and Austrian universities as the most important
work a professor can do, a Privatseminar.
The Privatseminar has practically no, and officially and legally, no connection whatsoever
with the university.
It is just an institution that a member of the faculty meets with his students regularly
and that they work together, discuss problems together in a serious way.
Now in my... I started such a Privatseminar and I must say that looking backwards today
I can say this Privatseminar was a success. It was a success. If I look around here in
In the room, I see one of the oldest members of my private seminar, Professor Hayek.
And there are others in this country teaching Haberler.
I have written down a few names in order not to forget.
There is Haberler, Machlub, Morgenstern, the two last, both in Princeton.
There is at Marquette University, Fröhlich.
There is a lady, Dr. Mintz, the professor at the School of General Studies of Columbia University.
But there are not only economists in my Privatseminar, where we dealt with all the problems connecting economics with other social sciences.
There were in my private seminar many students who were less interested in economics as such
than into general problems of the social sciences and the sciences of human action.
And I want to name, one of them was Fogelin, the name is perhaps known to you,
Lewis, he has acquired a great fame as author of philosophical books. He was twenty years
professor at Louisiana University in Baton Rouge and he is now professor of philosophy
at the University of Munich, then two professors of the new school who unfortunately died already,
Dr. Schütz and Dr. Kaufman, then there is, you will be perhaps astonished, one member
Dr. Wintornitz was a practice law in Vienna. When he came to this country, he was almost
He was immediately appointed by the Metropolitan Museum in his specialty as dealing with the problems in which the painting and music come together, a very special field.
Then there were others, I don't want to mention all, I want only to mention a few foreigners who came to Vienna for a shorter or for a longer time and who attended not very regularly but often enough my seminar.
Perhaps, as you know, that I am not very much in favor of, let us say, Marxism and so on.
You will be astonished to hear that one of these men was, for instance, Luke Gateskell,
the present chief of the British Labour Party.
The German was, again you will be astonished, a Japanese, Professor Araki, who when in the
time later, in the time of the axis, was the Japanese professor at the University of Berlin
Teaching Japanese Economics and the Economic Problems of the Axis in Berlin.
He was also a nice man. Unfortunately, he died too.
And another whom I want to mention is the present professor of economics
at the Collège de France, the most renowned institution of French learning,
and François Perroux and so many others. The problems for the European students in general
and for the young students in Austria were at that time most to a great extent financial
problems due to the inflation and unfortunate development of economic conditions in Europe.
And it would have been, it was, even the regular study of economics was rather difficult for
people who couldn't afford to buy textbooks and other books and who couldn't, and who
had to face the fact that even the official libraries didn't have the money to do this.
It was therefore of a very great importance that one should find means and methods to
to give to these young men the opportunity to go to foreign countries.
The first student of mine who went in this way into a foreign country was again Professor Hayek.
This was due to a special arrangement.
There was a distinguished professor of NYU, Jeremiah Jencks, who had written very good
studies on the gold exchange standard in the Far East.
One could say the man who made the gold exchange standard known to economists came to Vienna
and wanted to study European conditions, to write about them and I introduced to him Dr. Hayek and Dr. Hayek was then later for some time his secretary in New York.
This was an exceptional case and an exceptional man, both exceptional men, Jeremiah Jencks and Hayek, but it was necessary to find some other methods and there came an American institution, did an excellent job in this regard.
Technically, it was the Laura Spellman Foundation, but it was better known as the Rockefeller
Foundation.
You know, Laura Spellman was the wife of the original Rockefeller, and there was a Rockefeller
and the Laura Spellman Foundation that made it possible for European scholars, for young
men, to spend one or two years in the United States and to do in the United States what
they wanted.
They could attend the universities they wanted and they could visit all parts of the country
I want to give you the name of one German, Laura Spelman, student. This was Professor Röpke.
Now, in Austria, the man who represented the foundation was a professor of history, Francis
Pübram, and Pübram took all those economists whom I recommended.
And in the course of these years there were Haberler and Morgenstern and Machlup and several
others went to the United States and spent here two years and they came back as, I would
say, as perfect economists and wrote, as you know, some of them wrote very interesting
and wood books and so on.
Another thing that developed out of the Privatseminar and of my activities as the economic advisor
of the Austrian Chamber of Commerce was that we started in 1926 in Vienna an institute
for business cycle research.
It still exists in Austria in spite of the fact that in the meantime it had some unpleasant
and experiences with the Nazis. It has only changed its name. It's no longer called Institute
for Business Cycle Research, but General Institute for Economic Research. The first manager of
the institute was again Professor Hayek, as you have to know him. And when Hayek left in
In 1931, to go to London to teach at the London School of Economics, Morgenstern, now professor
in Princeton, succeeded.
It is very interesting to realize that the students who studied in the 20s at the Austrian
Universities, and wanted to do a good job as, let us say, researchers, who wanted to
contribute to the development of the sciences, who wanted to choose a scientific career,
These students had at that time very slim chances of making money, or earning money, sufficient money, in this capacity as students that they mostly had to know, and knew it very well,
that they will have to work in some other field and will only be able to devote their leisure time to the study of economics which they like.
And, nevertheless, they chose it. At that time, they couldn't know what will happen later.
They didn't know that when Austria was invaded by Nazi Germany, many of them will be able
to find teaching positions in foreign countries, and especially the ability to go to the United
States, and to find here a field of activities much broader, I would say, even than the fields
they could ever find in Europe.
And therefore I must say that what I consider as the real success of my work as a teacher
of economics, as a professor of economics in Vienna, is that I made it possible for
There are a number of very gifted and able men to find a way to devote their lives to scientific research.
And this, of course, was not my merit. It was something that I would say developed.
And as far as individuals are to be considered as the authors of this thing, I must say,
It was the general attitude of this country that accepted these people as teachers
without making any distinction between, or let us say, without any regard to the fact
that they were not born Americans and were educated and reached their manhood in Europe
under very different positions, but I think that what this country got from these former students of mine is not bad.
They are certainly today among the teachers of economics in this country
in a very good position in a situation in which they have contributed
to the success of American universities and the specialist of those departments in social sciences, economics, and other fields.
There are also in other branches of academic business, many foreigners working, and I want to say this.
There is a lot of talk today about international cooperation and international friendship among
the nations and so on.
In fact, nothing has been done in this regard and on the contrary, we know very well that
the world is today divided in hostile terms and conditions is very unfortunate.
But what really developed in the world is an internationalism of science and teaching.
And I am proud that I could a little bit contribute to this internationalization and that the
The fact that today there is international cooperation between the members of the same field of research
is one of the most important developments of the last ages.
and we all can be proud of the fact that we contributed a little bit to its development.
Thank you very much.
Might there be any questions?
Peter, you are an old man in his hands.
I was fascinated by you there.
I was very fascinated.
Do you have a question?
No, no.
Well, how about tea anybody?
I know the spa, I'm sure, is available.
Can you get the spa?
Is there a panning room?
Thank you very much, Professor von Mises. It was a pleasure. I think I can make this a gratitude of all of us. Thank you very much.