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NOTE 1. Roots

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Part 1 Young Ludwig

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Chapter 1 Roots

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On September 29, 1881, Ludwig Heinrich Edler von Mises was the first in his family to be

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born a nobleman. A few months earlier, the Austrian Emperor had ennobled Ludwig's great-grandfather

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Meyer Rachmiel Mises. The family would henceforth bear the new name von Mises. The Emperor also

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Ludwig's birthplace was the city of Lemberg, the capital of the bygone Kingdom of Galicia

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and Ludomeria. For centuries Galicia had belonged to Poland before it fell to the House of Habsburg

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in 1772, when large chunks of Poland were divided among its three mighty neighbours,

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Russia, Prussia and Austria The Kingdom of Galicia and Lodomeria had

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not existed before the division of Poland. The Habsburgs chose this name as a quasi-historical

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justification of the annexation. In the late Middle Ages the Hungarian King Andrew had

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been a Rex Galiciae et Lodomeriae, that is, a king of the old Ruthenian principalities

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of Hallitsch and Vladimir. Even though the Habsburgs were the emperors of the German

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Reich, they never incorporated Galicia into Germany, but kept it the northernmost province

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of Austria, the Habsburgs' personal dominion. At the time of Ludwig's birth, the Habsburg

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Empire was the second-largest political entity in Europe, second only to Russia. Until the

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end of the seventeenth century, the Habsburg dynasty had also ruled Spain and its overseas

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These Colonies All Around the World Not long before Mises was born, the Habsburgs

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had ruled northern Italy, as well as Belgium and the Black Forest region in Germany. By

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1881, the Empire had lost these latter dominions, but were still composed of twelve major ethnic

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groups and hosted six large religious bodies. Young Ludwig grew up in a powerful nation

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were the rich mix of cultures and a diverse ethnic heritage.

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In 1918, Galicia fell back to Poland, and today, Lemberg and the adjacent lands belonged

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to Ukraine. Other historical names of Lemberg were Lviv, Lvov, Lviv, Lviv, Lvov, Lviv,

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Lviv, Lviv, Lviv, Lviv, Lviv, Lviv, Lviv, Lviv, Lviv, Lviv, Lviv, Lviv, Lviv. Even

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Given by Austrian standards, Galicia was an extreme case of ethnic richness. Most of its

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citizens were Poles, Ruthenians, Jews and Germans, but there were also substantial numbers

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of Armenians, Greeks and Italians. While Jews were an often tiny minority in virtually all

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other Habsburg lands, Eastern Galicia's Jews represented an actual majority. At the time

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From the time of Ludwig's birth, they were nearly the largest group in the city of Lemberg,

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second only to the Polish majority. In 1848 the Galician population totalled 5.2 million.

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Among them were 2.2 million Roman Catholics, essentially Poles, but also Germans, 2.2 million

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Greek Catholics, Ruthenians, 333,000 Greek Orthodox, and 333,000 Jews.

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The city of Lemberg had some 63,000 residents in 1840, of which 30,000 were Roman Catholics,

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4,500 Greek Catholics and 25,000 Jews. The Jews had come to the country because the Catholic

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rulers of Poland, for more than 500 years, had been more tolerant to a Jew than had any

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other government. Legal protection for Jews started with the statue of Carlitz in 1264

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the 14th century King Casimir the Great and his successors upheld and extended these rights

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during the next 200 years, at a time when Jews were expelled from virtually all other

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countries of Europe. Over the centuries the Jewish community in Poland gained ever greater

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legal autonomy, and by the end of the 18th century there was virtually a Jewish state

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within Poland. This country had become a homeland for the Jews of the entire world, a new Holy

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By 1750, some 70% of all Jews lived in Poland, a number that grew even during the Polish

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partitions. By 1780, Poland was home to more than 80% of all Jews worldwide. Because the

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early influx of Jews was from Germany, the German-Jewish dialect of Yiddish became the

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A simulation to the Polish language and culture was slow, if it happened at all. The strongest

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assimilation occurred among the Jewish intellectual and economic leaders, who shared business

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ties and other common interests with the Polish ruling class. The eminent Austrian historian

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and political philosopher Erich Ritter von Kuhnfeld-Ledin claims that this Polish background

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had an important impact on Ludwig von Mises' early development.

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Konrad Ledin argues that young Ludwig was influenced by Polish political thought and

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political institutions, which cherished an aristocratic ideal of republican liberty.

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Movements for liberty, as a matter of fact, have typically been carried on by the nobility

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which always opposed centralising pressure and control. We saw this in England with the

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by the Magna Carta, in Hungary with the Golden Bull, in Aragon by the stubborn Grandes, and

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in France by the Front. In this respect Poland went further. It became an elective monarchy

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in 1572 and called itself a republic. One of the slogans of this very independent nobility

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was, Menace the foreign kings and resist your own. Political power rested with the nobility,

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which, before the partitions, had no titles, and its claimants comprised a fifth of the

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population. It was a nobility without legal distinctions, and a proverb said, The nobleman

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in his farmhouse is equal to the magnate in his castle, and since all noblemen were equals,

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they could not be ruled by majorities. In the Parliament, the same, the opposition of

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This Polish political tradition permeated the culture of the Polish upper class in

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Galicia and must have had a considerable impact on families such as the Miseses, who strove

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to be received into the higher social strata at the turn of the 18th and 19th centuries.

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While his Polish heritage had its impact on the political thought of Ludwig von Mises,

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The cultural aspirations of his ancestors pointed in a completely different direction.

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Throughout the 19th century, in fact, the Mises family helped spearhead the Germanisation

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of their native Galicia. In their eyes, German culture was the embodiment of social progress.

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The liberal policies pursued under Joseph II at the end of the 18th century promised

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to bring greater liberty for the Galician masses and emancipation for the Jews. This

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This was exactly what left-wing secular Jews had been striving for. At the turn of the

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18th and 19th centuries, these groups became pro-German under the determined leadership

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of wealthy merchants such as the Mises family. They supported the new political administration,

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they welcomed immigration of non-Jewish ethnic Germans, and they promoted the infusion of

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secular German culture into Jewish circles. Members of the Mises family played a leading

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Heinrich Gretz reports

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Since the wars with Napoleon, there had arisen small circles in the three largest Galician

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communities of Brody, Lemberg and Tarnopol, banded together for self-culture, the promotion

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of education and a war of annihilation against racism. In Lemberg, a kind of literary circle

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After 1772, the Habsburgs imposed a cast of German-speaking bureaucrats on the country,

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had also encouraged German settlements on land confiscated from the Polish kings, the

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Jesuit order and various monasteries. The Germanisation of Poland went on for almost

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a century, during which the Polish aristocracy repeatedly tried to shake off Austrian rule.

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After a failed attempt in 1863, the old political establishment of Poland finally came to terms

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with the Habsburgs, promising loyalty of its Kolopolske, Polish club, to the Austrian crown

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in exchange for a free hand in ruling Galicia.

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In 1867 the Polish aristocracy obtained a Galician resolution in the Austrian parliament

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which granted them a large degree of autonomy in this easternmost part of the empire.

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The Polenklub in Vienna became one of the main factions supporting the Austrian governments

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until the eventual disintegration of the empire in 1918. At the same time, the Germanisation

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of Galicia was rolled back and eventually died out. Only the traditional pillars of

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German language and culture remained – civil servants and secular Jews.

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In 1880 there were some 324,000 Galicians whose first language was German. In 1910 only

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Until 1867, pro-German orientation was the basis of the Mises family's influence in

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local political affairs.

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had made their influence felt even in national circles once the appearance of railroads brought

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Galicia into ever closer economic ties with the rest of the Habsburg Empire.

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It seems that railroad construction was a spin-off of Jewish initiatives to promote

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the industrialisation of Austria.

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Thus, William Johnson states that a few years after 1831, Solomon Rothschild persuaded Metternich

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to promote industrialisation in the Habsburg domains.

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In the second half of the 19th century, railroads were an advanced technology that profoundly

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transformed economic, political and social relationships. Railroad companies paid the

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highest salaries, provided opportunities for rapid career advancement and attracted the

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most energetic and best-trained young men of the time. Virtually all these men belonged

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to a new intellectual class that had emerged during the 19th century, the engineers. Typically,

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the children of bourgeois families, engineers epitomised intelligence, hands-on pragmatism,

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goal orientation and success.

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Railroads came to Austria in the 1820s, and by the early 1840s the government was trying

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to take them over. During the next ten years many Austrian lines were socialised until

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until the cataclysmic events of 1848 to 1849 brought the state finances into such disarray

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that, starting in 1854, a re-privatisation became necessary.

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Once again under private ownership, the railroads reached Galicia. The Mises family was strongly

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involved in both of the two major Galician railroad ventures, serving as board members

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A generation later in the 1870s and 1880s, Ludwig's father Artur Edler von Mises, born

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on September 6th, 1854, worked for the Czernowitz Railroad Company while his uncle Emil was

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an engineer for the Karl Ludwig Company. Artur von Mises had married Adele Landau, born

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on June 4th, 1858, from Vienna. Her family came from Brody, an almost exclusively Jewish

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A few years later, they had a third boy, Carl, but he died of scarlet fever when Ludwig was

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twelve years old.

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There's native Brody was in those days a free trade zone for commerce with Poland and Russia.

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Her family had made good use of the profit opportunities and become affluent and influential.

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Her marriage with Arthur was not only a matter of love, it was also meant to cement a more encompassing alliance between two of the leading families of Eastern Galicia.

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Significantly, at the 1873 elections to the Austrian Parliament, all three Jewish MPs from

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Galicia had family ties. Joachim Landau was elected for the city of Brody, Natan Kallia

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joined the Parliament as a representative of the Brody Chamber of Commerce, and Ludwig's

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uncle Herrmann was elected for the county of Drohobitz. Joachim Landau was the brother

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Father of Ludwig von Mises' grandfather on the maternal side. Ludwig's grandmother

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on the maternal side was a cullier, his grandfather a landal.

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More than any other male family member of this generation, Hermann Mises featured the

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virtues that had made the Mises family so successful, and which a generation later would

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also characterise his nephew Ludwig – enthusiasm, determination, intelligence, love for his

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fatherland, leadership and unpretentious and clear writing. After directing a branch office

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for a large insurance company and exploring for petroleum in Galicia, Hermann moved to

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Vienna in the early 1870s to work for a major newspaper, the Morgan Post. In 1873 he became

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a one-term member of the Reichsrat, the Austrian parliament, for the Galician district of Sombor

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Strych Drohobitsch, then returned to journalism, writing for another major paper, the Wiener

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Allgemeine Zeitung, where he was a tireless advocate for the industrialisation of Galicia.

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There seems to have been an oil boom in what came to be called the Galician Pennsylvania,

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Hermann's election district around Drohobitsch, an area south-west of Lemberg. At the turn

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of the 19th and 20th century, Galicia was the number four producer of petroleum worldwide,

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of Russia, the United States and the Dutch West Indies.

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Hermann and his brothers and cousins continued a tradition of achievement that can be traced

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back at least to their great-grandfather Ludwig's great-great-grandfather Ephraim Fischl Mises.

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Fischl was a large-scale fabric merchant and real estate owner in Lemberg. After the Polish

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partition of 1772, the inhabitants of this poor rural area greatly profited from the

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The new Austrian rule, which brought unprecedented liberties for the rural population and also

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for the cities, even though Maria Theresa, Empress at the time of the partition, was

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not a champion of Jewish liberties. Some of her most important consultants, the famous

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Sonnenfelds, for example, were of Jewish origin, but she would not tolerate Jewish residents

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in Vienna. Jews are expelled from Vienna under Leopold I in 1669-1670. A few years later

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these measures were rescinded rather half-heartedly, and so things remained as in 1670.

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As far as Maria Theresa is concerned, cultural historian Robert Cahn states, Within the first

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five years of Maria Theresa's reign, the Jews were driven out of Bohemia, 1745, and

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Less than three years before her death, less than five years before Joseph II issued the

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famous tolerance patent in 1777, she wrote these words,

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In the future no Jew shall be allowed to remain in Vienna without my special permission.

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In the cities that did tolerate Jewish residents, such as Lemberg, Jews were forced to live

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within special areas, the Judenviertel, they were generally prohibited from trading in

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and the forbidden districts of the Empire, and even those who had permission to trade

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there on business days could not stay overnight. So it remained from her reign well into the

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19th century. Despicable as the system of regulations was,

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it allowed for exceptions. Thus the city of Lemberg would authorise Jewish residents outside

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of the Judenwörter if the person in question fulfilled three conditions. He had to be wealthy,

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He had to be educated, and he could not wear traditional Jewish clothes. A case in point

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was Fischer in Mises, who enjoyed the privilege of living and trading in the forbidden district

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of Lemberg, where he also acted as the president of the secular organisation of local Jews,

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the Jewish Cultural Community, Israeletische Kultursgemeinde.

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On June 23, 1800, Fischer's wife gave birth to the true founder of the Mises dynasty,

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The inexhaustible polymath Meyer Rachmiel Mises. The boy quickly proved to be successful

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in many fields, and his father made him a partner in his firm early on. He also arranged

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a suitable marriage with Rosa Halberstam, whose father ran an important German-Russian

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export business. Barely thirty years old, Meyer became president of the Lemberg Jewish

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When his father died in 1842, he set up his own trade firm. Still in his forties he was

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not only a successful businessman, but also an influential social leader, elected several

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times into the Lemberg City Council, founder of an orphanage, of a Jewish school and a

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and a Jewish kitchen for the poor. He also created several institutions providing funds

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for scholarships and other public welfare-oriented purposes. These activities must have played

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a decisive role in his eventual ennoblement. Throughout Franz Josef's reign, contributions

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to public objectives or the creation of public welfare-oriented funds were instrumental in

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the ennoblement of wealthy industrialists, merchants or bankers. Mayer was the leader

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of the Secular Pro-German Wing within the Lemberg Jewish Religious Community, in which

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he held various positions beginning in 1840. The top three items on the agenda of the enlightened

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Jewish faction under Meyer were 1. spreading the German language, 2. creation of a Deutsch-Israelisches

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Beethaus, a progressive synagogue in which services were held in German, and 3. the creation

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of a German-Language Jewish School. The main stumbling block for these projects was the

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local rabbi, a leader of the Orthodox Ashkenazi. After the death of this man in the early 1840s,

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the Mises faction brought in Rabbi Abraham Korn, who was well known for his progressive

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views. Once in Lemberg, Korn was adamant in pursuing his agenda and must have driven his

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In September 1848 he was murdered. Gretz remarks,

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In almost every large community there arose a party of the Enlightenment or the Left which

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had not yet broken with the old school, but whose action bordered upon secession. By the

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ultra-orthodox they were denounced as heretics on account of their preference for pure language

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and form, both in Hebrew and European literature.

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Meyer Rachmiel Mises was probably among those who, after 1846, successfully led the country's

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bloody insurrection against the Polish nobility. These aristocrats had tried to re-establish

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the ancient custom of robot, part-time serf labour for the nobility that had slowly declined

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after the Austrian takeover of Galicia at the end of the 18th century. Two years later,

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when revolutionary insurrections broke out in Paris, Berlin and Vienna, Meyer helped

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bring the fight to Galicia. He was one of the four Jewish signers of a March 1848 Galician

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petition to the Emperor, demanding, among other things, legal equality for all social

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classes, emancipation of the Jews, the creation of a Galician militia and of a Galician parliament.

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The petition had been initiated by the Polish politicians Smolka, Tymilkowski and Kulczycki.

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It also demanded the introduction of the Polish language in public schools and civil service.

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As an initial result, all forms of serfdom in Galicia were affirmatively abolished on

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April 17, 1848, though the Polish aristocrats received some compensation from the public

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treasury. In the same year, Mayer Rachmiel Mises was elected to the Galician parliament.

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He had now become a visible member of the unofficial Jewish nobility and was actively

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He may even have been one of the democratic agitators who caused such headaches for the

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defenders of the monarchy.

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This was more than enough for a lifetime, one would think, but the most active and challenging

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part of his life still lay ahead.

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It came when the railways which had begun crossing the European continent in the 1840s

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Reached Galicia in the mid-1850s. Meyer and his son Abraham positioned themselves in this

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business and were contracted by the Austrian army to transport wheat from Galicia in 1859.

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The army was preparing for its Italian campaign. The wheat deal brought them in touch with

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the financial empire of the Rothschild family. In 1855 Anselm von Rothschild had established

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The Credit-Anstalt Bank, which specialized in financing industrial ventures and would

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soon become the largest bank on the Vienna stock exchange. One of its first major operations

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was to finance the Italian campaign. The deal must have gone well for in 1860 Abraham accepted

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a position as director of Credit-Anstalt's new Lemberg branch office.

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Meyer had moved to banking three years earlier, becoming a director of the Lemberg branch

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Anselm von Rothschild's son, Albert, became a general counsellor to the Austrian-Hungarian

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Bank and was commonly regarded as the key figure in the Austrian financial market. It

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is likely that his father played a similar, though less publicised, role in the National

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Bank The thorough repositioning of the Mises family

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was complete when Meyer's younger son Hirscher, Ludwig von Mises' grandfather, became a

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partner and managing director of the Hallerstein and Nierenstein Bank, and his firstborn grandson

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Hermann rose to the directorship of the Lemberg office of the Phoenix Insurance Company. Hirscher

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Mises was married to a member of the Nierenstein family, Marie Nierenstein.

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The Mises' economic interests, starting in a provincial trade company, had now shifted

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to the most profitable national industries, railroads and banking.

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In April 1881 Emperor Franz Josef granted Meyer a patent of nobility, and in September

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of the same year granted him and his lawful offspring the right to bear the honorific

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Eidler, a lonely patriarch, Meyer Rachmiel Eidler von Mises survived both of his sons

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and his youngest daughter Kara. When he died on February 28, 1891 in Lemberg, all of his

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grandsons had left for Vienna. This exodus was by no means exceptional. Tens of thousands

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of Jewish families from the eastern provinces had seized the opportunities provided by the

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The liberal post 1867 regime, which had abolished all legal impediments to Jewish migration,

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and established themselves in Vienna. Most of them held more secular views than those

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who remained in Galicia. Liberal Vienna held the promise of escape from the restrictions

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of small religious communities and of secular integration into the larger world. Before

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After 1867, city life in Lemberg and other major towns could offer similar prospects

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in Galicia, but by giving cultural supremacy in Galicia to the Polish club, the Galician

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resolution had quickly destroyed these prospects.

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The Polish aristocracy was adamant in suppressing any threat of social change. Liberalism and

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capitalism were not welcome. Neither were German language schools, the great harbingers

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of Social Change in the preceding decades. In the Lemberg Jewish community, the rollback

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of German cultural supremacy was completed in 1882, when a pro-Polish president was elected

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to the Jewish cultural community. In the case of Ludwig's father Artur, however, the crucial

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circumstance prompting his departure for Vienna may have been more prosaic. Austrian state

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Finances had recovered in the 1870s and in the 1880s the government again took control

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of the railroad industry. The lines that had the greatest military importance were nationalised

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first including those connecting Vienna with the borders of Russia in Galicia. In the wake

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of this takeover Artur von Mises was accepted into the civil service as a construction councillor

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to the Railroad Ministry in Vienna. Other family members had followed in the same path.

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By the 1890s, at least three of Arthur's brothers and cousins, Emil, Felix and Hermann,

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had left for Vienna too. Felix was a chief physician at the Vienna General Hospital and

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Hermann was a reputable journalist and politician. In those days, joining the civil service in

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in Vienna was a big improvement in any man's career. Employment in public administration

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was comparatively rare and far more prestigious than any other field of activity.

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The family moved into an apartment at Friedrichstrasse 4, its home for the next 15 years. Adele had

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a maid and a cook to assist her in running the household, standard in bourgeois families,

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while her main duty and passion was the education of her sons. This involved most notably placing

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The Miseses had become a typical Jewish family for the Vienna of that time, as described

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by cultural historian William Johnston. It was characteristic of them that a businessman

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father would marry a wife who was more cultivated than he was. Together the couple would settle

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in Vienna, often in the Leopoldstadt district, where he established a career while she supervised

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and the education of the children. The cultural ambition of the wife was then passed on to

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the sons who aspired to excel their fathers by entering one of the liberal professions.

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By all human standards, Adele von Mises did an outstanding job educating her two sons.

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Each did far more than just surpass his father. They both turned out to be scientific geniuses

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Studies, Ludwig in the Social Sciences and Richard in the Natural Sciences.

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Ample administrations of motherly love provided the foundation for their astounding achievements,

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but there was more. Adele taught her sons to care for others. Charitable works were

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a quintessential part of her upbringing. She taught them to be modest and frugal. Ludwig

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was a rigorous bookkeeper throughout his life. He kept track of his income and daily expenditure

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in a personal ledger. She taught them to honor truth and virtue more than the encomiums of

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the world. She taught them the art of writing, and she taught them always to strive for excellence.

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In all of their later endeavors Ludwig and Richard would be thorough and systematic.

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In their professional lives this was a matter, of course, but it also permeated all their

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other activities. Ludwig, for instance, sought instruction even in popular sports, such as

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Mountain Hiking, and when he played tennis it was always with a trainer. Like their mother,

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Ludwig and Richard wrote with a clear and unpretentious style. From childhood they set

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for themselves the highest standards, and as they developed taste and expertise, they

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would judge their own achievements and those of others in the light of these standards.

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Ludwig was especially adamant in his refusal to allow social or political considerations

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As a mature man, he would openly despise the

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great majority of his professorial colleagues, not for their errors, but for their dilettantism.

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About the typical German economist, he wrote, such studies of economic state science necessarily

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They repelled young people with intelligence and thirst for knowledge. Instead, it strongly

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attracted simpletons. They were deletants in everything they undertook. They pretended

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to be historians, but they scarcely looked at the collaborative sciences, which are the

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most important tools of the historian. The spirit of historical research was alien to

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them. They were unaware of the basic mathematical problems in the use of statistics. They were

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were laymen in jurisprudence, technology, banking and trade techniques. With amazing

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unconcern they published books and essays on things of which they understood nothing.

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His complete inability to suffer fools would make him many enemies and almost ruin his

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career. It gained him the reputation of a stubborn doctrinaire. Mises nevertheless got

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were not along on his rocky road, thanks to his outstanding gifts, among them the natural

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gifts from his native Galicia. In this respect, too, he was a typical case. Jewish lawyers,

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doctors, professors and journalists abounded after 1880, and there were not a few ranches

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like Stefan Zweig or Otto Weininger. These men, who had attended gymnasium and university

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Society in Vienna often had grandparents who had lived in villages in Galicia or Moravia,

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close to the soil and to traditional Jewish culture. However ardently these young sophisticates

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might try to secularise themselves, they could not cut off all the roots in the Jewish villages.

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They retained an earthly energy, a love of nature, a breadth of horizon that served them

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well and accorded with Vienna's traditions. After 1860 Vienna's Jews were not products

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Newcomers of generations in an urban ghetto like that of Berlin or Frankfurt. They were

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newcomers to the city who brought an energy, an ambition, an appetite for culture that

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made them capable of astonishing innovations. Earthly energy, breadth of horizon, ambition

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and appetite for culture also characterised young Ludwig and these qualities would lead

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him to astonishing innovations. The next chapters show how this newcomer conquered first Vienna

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and eventually the world of ideas.