WEBVTT NOTE Recollections from the University of Vienna 1 00:00:00.000 --> 00:00:15.000 Ladies and gentlemen, Mrs. Mises, Hayek, Professor Hayek, Dean Kelly, on behalf of the GBA Economics Department, I welcome you all. 2 00:00:15.000 --> 00:00:29.000 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. 3 00:00:29.000 --> 00:00:42.000 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. 4 00:00:42.000 --> 00:01:04.000 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. 5 00:01:04.000 --> 00:01:11.000 What may make this especially interesting, I don't know if it was arranged this way, 6 00:01:11.000 --> 00:01:22.000 but our speaker's most famous pupil, I think, is with us today, Professor von Hayek of the University of Chicago. 7 00:01:22.000 --> 00:01:30.000 Our speaker came to us in February of 1945. 8 00:01:30.000 --> 00:01:36.960 and been with us a long time, we hope he'll be with us a long time more. 9 00:01:36.960 --> 00:01:46.960 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. 10 00:01:46.960 --> 00:01:53.960 And after he finishes, he will welcome a few questions if you have any. 11 00:01:53.960 --> 00:01:58.960 It's with great pleasure that I present Professor von Mises. 12 00:01:58.960 --> 00:02:18.960 Thank you very much, Professor, and I want to thank Dean Taggart, who is absent for the kind invitation. 13 00:02:18.960 --> 00:02:37.040 Mostly, in talking about economics in Vienna and Austria, one uses the term Austrian school. 14 00:02:37.040 --> 00:02:45.200 And many people misunderstand the meaning of the term, believing that there was a special 15 00:02:45.200 --> 00:02:55.560 economic school in Vienna, an organized institution in the way in which we have law schools, for 16 00:02:55.560 --> 00:02:56.560 instance. 17 00:02:56.560 --> 00:03:08.040 Now, the fact is this that the term school in connection with the Austrian economics 18 00:03:08.040 --> 00:03:26.240 means merely a certain trend in doctrines. It is a doctrinal term and it was given originally 19 00:03:26.240 --> 00:03:40.720 to these economists, to this small group of Austrian economists, by their adversaries in 20 00:03:40.720 --> 00:03:50.520 Northern Germany, the German Reich, and it was given with a pejorative meaning, you know. 21 00:03:50.520 --> 00:04:01.960 It was certain contempt when the term was first used in the 80s of the 19th century in Germany 22 00:04:01.960 --> 00:04:02.960 against the Austrians. 23 00:04:02.960 --> 00:04:15.080 This is a great difference as against the name given to the two other Austrian groups 24 00:04:15.080 --> 00:04:27.080 or groups that originated from Austria or Vienna, who are internationally known as scientific groups. 25 00:04:27.080 --> 00:04:34.080 These two other groups choose themselves their name. 26 00:04:34.080 --> 00:04:39.080 One is the psychoanalytical movement, 27 00:04:39.080 --> 00:04:52.520 and the other is the so-called Vienna Circle or logical positivism that in fact today dominates 28 00:04:52.520 --> 00:05:00.120 the teachings of philosophy in the universities of the Anglo-Saxon countries. 29 00:05:00.120 --> 00:05:12.120 Not in France, not so much in France, but first of all in England and in the United States. 30 00:05:12.120 --> 00:05:22.280 Now what all these three groups have in common is that they were not, as people sometime 31 00:05:22.280 --> 00:05:36.840 may assume that they were not very popular with the authorities of the official Austrian 32 00:05:36.840 --> 00:05:41.000 hierarchy of teaching and learning. 33 00:05:41.000 --> 00:05:50.520 All universities in Central Europe, continental Europe, are state universities. 34 00:05:50.520 --> 00:06:02.520 Even the idea that a university could be a private institution is foreign to most of these countries. 35 00:06:02.520 --> 00:06:19.520 And the universities are operated by the government and, of course, there is a fundamental difference between these universities and the other governmental institutions. 36 00:06:19.520 --> 00:06:32.120 The difference is academic freedom. Academic freedom means that while all government employees 37 00:06:32.120 --> 00:06:42.080 and functionaries of the government are bound to obey in the exercise of their functions 38 00:06:42.080 --> 00:06:58.240 Strictly what has been ordered to them by their superiors, the teachers at the universities, 39 00:06:58.240 --> 00:07:07.880 all teachers at the universities and schools of the same rank, technological universities 40 00:07:07.880 --> 00:07:21.400 and today also commercial universities, are government employees who have no superior. 41 00:07:21.400 --> 00:07:37.480 They, nobody, not even the cabinet member representing the duties of the supreme manager 42 00:07:37.480 --> 00:07:44.880 and the teacher of instruction has the right to interfere in any way with their teaching. 43 00:07:44.880 --> 00:07:58.600 This is of very great importance, of course, because there were in these countries again 44 00:07:58.600 --> 00:08:06.720 and again tendencies to influence the teaching of war and still more the teaching of economics 45 00:08:06.720 --> 00:08:14.480 and political science, social sciences in general. 46 00:08:14.480 --> 00:08:27.480 Now, the important fact was that these three groups about which I spoke and I don't want 47 00:08:27.480 --> 00:08:38.760 to issue any judgment or value about psychoanalysis or about logical positivism. 48 00:08:38.760 --> 00:08:46.480 I am an economist and do not deal with these problems, but I want to say all these three 49 00:08:46.480 --> 00:09:02.760 Three schools had one thing in common. They were, at least in the post-war period, represented 50 00:09:02.760 --> 00:09:12.920 not by the professors appointed to teach, but by the privato-cents. A privato-cent, 51 00:09:12.920 --> 00:09:20.920 A private center is an institution that is unknown to the universities in the Anglo-Saxon countries. 52 00:09:20.920 --> 00:09:31.920 A private center is a man admitted as a private teacher at a university. 53 00:09:31.920 --> 00:09:36.920 He does not receive any payment on the part of the government. 54 00:09:36.920 --> 00:09:52.920 He has the practically very unimportant right to get the fees paid by the students. 55 00:09:52.920 --> 00:10:01.920 For most of the privates in Vienna, it made about the equivalent of $5 a year or $10 a year. 56 00:10:01.920 --> 00:10:21.920 Therefore, he had to find some other way and means of making a living, and he was practically free to do what he wanted. 57 00:10:21.920 --> 00:10:36.080 Now, when I came back from the war, I was admitted as a privata sent one year or 15 months 58 00:10:36.080 --> 00:10:46.480 before the outbreak of the First World War. The war interrupted for many years my teaching. 59 00:10:46.480 --> 00:10:57.760 And when I came back, I found that there were many young men very much interested in the 60 00:10:57.760 --> 00:11:13.440 study of economics and that they wanted not only to pass the examinations, they wanted 61 00:11:13.440 --> 00:11:24.440 to become an economist and to contribute something to the teaching and to the research work in the field of economics. 62 00:11:28.440 --> 00:11:37.440 In one regard, the preparation that the students in Austria got 63 00:11:37.440 --> 00:11:50.440 But for economic and legal studies, which were combined at the university, was very unsatisfactory. 64 00:11:50.440 --> 00:12:01.440 In this regards the study of modern languages, the Austrian gymnasium, like the gymnasium of the other Europe, 65 00:12:01.440 --> 00:12:13.920 and the Lycée in France and the Gymnasium in Germany gave rather good instruction in 66 00:12:13.920 --> 00:12:23.320 Greek and Latin, but the modern languages were neglected. And during, those people who 67 00:12:23.320 --> 00:12:35.440 who knew French or English had acquired their knowledge privately. During the war, this 68 00:12:35.440 --> 00:12:45.400 was not so easy. And after the war, the young men who came to my seminar, they had a privata 69 00:12:45.400 --> 00:12:53.400 were practically not familiar with any foreign language. 70 00:12:53.400 --> 00:13:07.400 A professor, one of the men who today teaches at one of the best known and biggest American universities, 71 00:13:07.400 --> 00:13:11.400 tells me every time I meet him, 72 00:13:11.400 --> 00:13:27.400 Do you remember, when you gave me a list of books for paper, I had to prepare for your seminar, 73 00:13:27.400 --> 00:13:32.400 and in this list dominated English language books. 74 00:13:32.400 --> 00:13:37.400 And I told you that these are English books, and then you answered, 75 00:13:37.400 --> 00:13:58.400 I had already at that time, immediately after the war, I had already also my first American student. 76 00:13:58.400 --> 00:14:06.400 This American student came to Vienna not as a private citizen. 77 00:14:06.400 --> 00:14:20.000 He came as a lieutenant in the American army as the aide-de-camp of other American civilians 78 00:14:20.000 --> 00:14:29.160 who had the rank of the coronel and all the men, and who had in Vienna an assignment of 79 00:14:29.160 --> 00:14:34.520 which he practically didn't know what to do. 80 00:14:34.520 --> 00:14:43.320 The Colonel had a lot of leisure time and the young man who was his assistant had still 81 00:14:43.320 --> 00:14:55.520 more leisure time and he decided to use this leisure time in a way that would make it possible 82 00:14:55.520 --> 00:15:04.560 for him to bring back to the United States, to Harvard University, after his return from 83 00:15:04.560 --> 00:15:11.840 the Army, already ready-made doctoral dissertation. 84 00:15:11.840 --> 00:15:20.840 And he wrote his doctoral dissertation in my seminar, as you want to say, on taxation, 85 00:15:20.840 --> 00:15:24.880 direct taxation in Austria. 86 00:15:24.880 --> 00:15:33.400 There was a lot to learn from Austria for Americans at that time because the Austrians 87 00:15:33.400 --> 00:15:44.960 had by far exceeded the American experience of the income tax and the corporation tax. 88 00:15:44.960 --> 00:15:50.440 In the United States, the income tax was at that time very new. 89 00:15:50.440 --> 00:16:00.520 In Austria it had already a history of 100 years and this young man is today also a retired 90 00:16:00.520 --> 00:16:17.200 professor, Professor van Sickle from Babes College, very well known author of books. 91 00:16:17.200 --> 00:16:37.080 At the university I had two hours a week, a seminar, once a week, but very soon this method 92 00:16:37.080 --> 00:16:52.680 appeared as impractical because in the seminar there were students who had already acquired 93 00:16:52.680 --> 00:17:04.960 a very good knowledge of economic problems and wanted to make research work, serious 94 00:17:04.960 --> 00:17:13.680 Research Work, and then there were younger students, and so I started very soon something 95 00:17:13.680 --> 00:17:24.480 which is considered at the German and French and Austrian universities as the most important 96 00:17:24.480 --> 00:17:28.600 work a professor can do, a Privatseminar. 97 00:17:28.600 --> 00:17:36.720 The Privatseminar has practically no, and officially and legally, no connection whatsoever 98 00:17:36.720 --> 00:17:39.120 with the university. 99 00:17:39.120 --> 00:17:55.800 It is just an institution that a member of the faculty meets with his students regularly 100 00:17:55.800 --> 00:18:03.560 and that they work together, discuss problems together in a serious way. 101 00:18:03.560 --> 00:18:12.440 Now in my... I started such a Privatseminar and I must say that looking backwards today 102 00:18:12.440 --> 00:18:19.640 I can say this Privatseminar was a success. It was a success. If I look around here in 103 00:18:19.640 --> 00:18:31.640 In the room, I see one of the oldest members of my private seminar, Professor Hayek. 104 00:18:31.640 --> 00:18:39.640 And there are others in this country teaching Haberler. 105 00:18:39.640 --> 00:18:45.640 I have written down a few names in order not to forget. 106 00:18:45.640 --> 00:18:55.640 There is Haberler, Machlub, Morgenstern, the two last, both in Princeton. 107 00:18:55.640 --> 00:18:59.640 There is at Marquette University, Fröhlich. 108 00:18:59.640 --> 00:19:10.640 There is a lady, Dr. Mintz, the professor at the School of General Studies of Columbia University. 109 00:19:10.640 --> 00:19:32.640 But there are not only economists in my Privatseminar, where we dealt with all the problems connecting economics with other social sciences. 110 00:19:32.640 --> 00:19:44.640 There were in my private seminar many students who were less interested in economics as such 111 00:19:44.640 --> 00:19:51.640 than into general problems of the social sciences and the sciences of human action. 112 00:19:51.640 --> 00:20:00.640 And I want to name, one of them was Fogelin, the name is perhaps known to you, 113 00:20:00.640 --> 00:20:15.240 Lewis, he has acquired a great fame as author of philosophical books. He was twenty years 114 00:20:15.240 --> 00:20:23.160 professor at Louisiana University in Baton Rouge and he is now professor of philosophy 115 00:20:23.160 --> 00:20:36.920 at the University of Munich, then two professors of the new school who unfortunately died already, 116 00:20:36.920 --> 00:20:45.720 Dr. Schütz and Dr. Kaufman, then there is, you will be perhaps astonished, one member 117 00:20:45.720 --> 00:21:14.680 Dr. Wintornitz was a practice law in Vienna. When he came to this country, he was almost 118 00:21:14.680 --> 00:21:37.680 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. 119 00:21:37.680 --> 00:21:58.680 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. 120 00:21:58.680 --> 00:22:08.400 Perhaps, as you know, that I am not very much in favor of, let us say, Marxism and so on. 121 00:22:08.400 --> 00:22:17.480 You will be astonished to hear that one of these men was, for instance, Luke Gateskell, 122 00:22:17.480 --> 00:22:23.640 the present chief of the British Labour Party. 123 00:22:23.640 --> 00:22:36.960 The German was, again you will be astonished, a Japanese, Professor Araki, who when in the 124 00:22:36.960 --> 00:22:48.320 time later, in the time of the axis, was the Japanese professor at the University of Berlin 125 00:22:48.320 --> 00:22:57.320 Teaching Japanese Economics and the Economic Problems of the Axis in Berlin. 126 00:22:57.320 --> 00:23:02.320 He was also a nice man. Unfortunately, he died too. 127 00:23:02.320 --> 00:23:11.320 And another whom I want to mention is the present professor of economics 128 00:23:11.320 --> 00:23:16.320 at the Collège de France, the most renowned institution of French learning, 129 00:23:16.320 --> 00:23:34.600 and François Perroux and so many others. The problems for the European students in general 130 00:23:34.600 --> 00:23:44.840 and for the young students in Austria were at that time most to a great extent financial 131 00:23:44.840 --> 00:23:53.720 problems due to the inflation and unfortunate development of economic conditions in Europe. 132 00:23:53.720 --> 00:24:04.140 And it would have been, it was, even the regular study of economics was rather difficult for 133 00:24:04.140 --> 00:24:10.900 people who couldn't afford to buy textbooks and other books and who couldn't, and who 134 00:24:10.900 --> 00:24:18.500 had to face the fact that even the official libraries didn't have the money to do this. 135 00:24:18.500 --> 00:24:34.620 It was therefore of a very great importance that one should find means and methods to 136 00:24:34.620 --> 00:24:42.620 to give to these young men the opportunity to go to foreign countries. 137 00:24:43.620 --> 00:24:52.620 The first student of mine who went in this way into a foreign country was again Professor Hayek. 138 00:24:53.620 --> 00:24:58.620 This was due to a special arrangement. 139 00:24:58.620 --> 00:25:10.220 There was a distinguished professor of NYU, Jeremiah Jencks, who had written very good 140 00:25:10.220 --> 00:25:16.940 studies on the gold exchange standard in the Far East. 141 00:25:16.940 --> 00:25:27.660 One could say the man who made the gold exchange standard known to economists came to Vienna 142 00:25:27.660 --> 00:25:50.660 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. 143 00:25:50.660 --> 00:26:12.660 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. 144 00:26:12.660 --> 00:26:21.940 Technically, it was the Laura Spellman Foundation, but it was better known as the Rockefeller 145 00:26:21.940 --> 00:26:22.940 Foundation. 146 00:26:22.940 --> 00:26:36.580 You know, Laura Spellman was the wife of the original Rockefeller, and there was a Rockefeller 147 00:26:36.580 --> 00:26:44.520 and the Laura Spellman Foundation that made it possible for European scholars, for young 148 00:26:44.520 --> 00:26:53.380 men, to spend one or two years in the United States and to do in the United States what 149 00:26:53.380 --> 00:26:55.780 they wanted. 150 00:26:55.780 --> 00:27:04.140 They could attend the universities they wanted and they could visit all parts of the country 151 00:27:04.140 --> 00:27:27.140 I want to give you the name of one German, Laura Spelman, student. This was Professor Röpke. 152 00:27:27.140 --> 00:27:42.180 Now, in Austria, the man who represented the foundation was a professor of history, Francis 153 00:27:42.180 --> 00:27:55.660 Pübram, and Pübram took all those economists whom I recommended. 154 00:27:55.660 --> 00:28:03.900 And in the course of these years there were Haberler and Morgenstern and Machlup and several 155 00:28:03.900 --> 00:28:16.260 others went to the United States and spent here two years and they came back as, I would 156 00:28:16.260 --> 00:28:24.020 say, as perfect economists and wrote, as you know, some of them wrote very interesting 157 00:28:24.020 --> 00:28:27.180 and wood books and so on. 158 00:28:27.180 --> 00:28:36.180 Another thing that developed out of the Privatseminar and of my activities as the economic advisor 159 00:28:36.180 --> 00:28:43.420 of the Austrian Chamber of Commerce was that we started in 1926 in Vienna an institute 160 00:28:43.420 --> 00:28:45.180 for business cycle research. 161 00:28:45.180 --> 00:28:51.260 It still exists in Austria in spite of the fact that in the meantime it had some unpleasant 162 00:28:51.260 --> 00:28:58.500 and experiences with the Nazis. It has only changed its name. It's no longer called Institute 163 00:28:58.500 --> 00:29:08.180 for Business Cycle Research, but General Institute for Economic Research. The first manager of 164 00:29:08.180 --> 00:29:17.100 the institute was again Professor Hayek, as you have to know him. And when Hayek left in 165 00:29:17.100 --> 00:29:27.340 In 1931, to go to London to teach at the London School of Economics, Morgenstern, now professor 166 00:29:27.340 --> 00:29:32.580 in Princeton, succeeded. 167 00:29:32.580 --> 00:30:01.380 It is very interesting to realize that the students who studied in the 20s at the Austrian 168 00:30:01.380 --> 00:30:15.680 Universities, and wanted to do a good job as, let us say, researchers, who wanted to 169 00:30:15.680 --> 00:30:22.740 contribute to the development of the sciences, who wanted to choose a scientific career, 170 00:30:22.740 --> 00:30:48.740 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, 171 00:30:48.740 --> 00:31:05.740 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. 172 00:31:05.740 --> 00:31:13.740 And, nevertheless, they chose it. At that time, they couldn't know what will happen later. 173 00:31:13.740 --> 00:31:34.380 They didn't know that when Austria was invaded by Nazi Germany, many of them will be able 174 00:31:34.380 --> 00:31:43.380 to find teaching positions in foreign countries, and especially the ability to go to the United 175 00:31:43.380 --> 00:31:57.500 States, and to find here a field of activities much broader, I would say, even than the fields 176 00:31:57.500 --> 00:32:02.460 they could ever find in Europe. 177 00:32:02.460 --> 00:32:16.500 And therefore I must say that what I consider as the real success of my work as a teacher 178 00:32:16.500 --> 00:32:25.740 of economics, as a professor of economics in Vienna, is that I made it possible for 179 00:32:25.740 --> 00:32:46.740 There are a number of very gifted and able men to find a way to devote their lives to scientific research. 180 00:32:46.740 --> 00:32:59.740 And this, of course, was not my merit. It was something that I would say developed. 181 00:32:59.740 --> 00:33:12.740 And as far as individuals are to be considered as the authors of this thing, I must say, 182 00:33:12.740 --> 00:33:29.060 It was the general attitude of this country that accepted these people as teachers 183 00:33:29.060 --> 00:33:46.780 without making any distinction between, or let us say, without any regard to the fact 184 00:33:46.780 --> 00:33:56.740 that they were not born Americans and were educated and reached their manhood in Europe 185 00:33:56.740 --> 00:34:08.980 under very different positions, but I think that what this country got from these former students of mine is not bad. 186 00:34:08.980 --> 00:34:20.980 They are certainly today among the teachers of economics in this country 187 00:34:20.980 --> 00:34:33.980 in a very good position in a situation in which they have contributed 188 00:34:33.980 --> 00:34:50.780 to the success of American universities and the specialist of those departments in social sciences, economics, and other fields. 189 00:34:50.780 --> 00:35:11.280 There are also in other branches of academic business, many foreigners working, and I want to say this. 190 00:35:11.280 --> 00:35:22.360 There is a lot of talk today about international cooperation and international friendship among 191 00:35:22.360 --> 00:35:24.440 the nations and so on. 192 00:35:24.440 --> 00:35:29.960 In fact, nothing has been done in this regard and on the contrary, we know very well that 193 00:35:29.960 --> 00:35:37.360 the world is today divided in hostile terms and conditions is very unfortunate. 194 00:35:37.360 --> 00:35:52.240 But what really developed in the world is an internationalism of science and teaching. 195 00:35:52.240 --> 00:36:04.520 And I am proud that I could a little bit contribute to this internationalization and that the 196 00:36:04.520 --> 00:36:21.520 The fact that today there is international cooperation between the members of the same field of research 197 00:36:21.520 --> 00:36:30.520 is one of the most important developments of the last ages. 198 00:36:30.520 --> 00:36:41.520 and we all can be proud of the fact that we contributed a little bit to its development. 199 00:36:41.520 --> 00:36:43.520 Thank you very much. 200 00:36:53.520 --> 00:36:55.520 Might there be any questions? 201 00:37:00.520 --> 00:37:04.520 Peter, you are an old man in his hands. 202 00:37:05.520 --> 00:37:09.520 I was fascinated by you there. 203 00:37:10.520 --> 00:37:12.520 I was very fascinated. 204 00:37:12.520 --> 00:37:14.520 Do you have a question? 205 00:37:14.520 --> 00:37:16.520 No, no. 206 00:37:16.520 --> 00:37:19.520 Well, how about tea anybody? 207 00:37:19.520 --> 00:37:22.520 I know the spa, I'm sure, is available. 208 00:37:22.520 --> 00:37:24.520 Can you get the spa? 209 00:37:24.520 --> 00:37:27.520 Is there a panning room? 210 00:37:27.520 --> 00:37:43.520 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.