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NOTE 18. Émigré in New York

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Part 6. Mises in America

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Chapter 18. Emigre in New York. Mises knew that it would be hard for him to find a suitable

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position in the United States. Fortunately, he had no idea just how hard. He was thoroughly

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out of step with positivism, or as he called it pan-physicalism, which had begun to shape

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the development of American economics during the past two decades, and which at the very

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The very moment he arrived on American shores was being promoted with large grants from the Rockefeller Foundation, among others, and his political views were of course also highly unfashionable.

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In the Land of the Free, the very cradle of radical laissez-faire policies, the philosophy of the founding fathers of the American Republic was all but dead in 1940.

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A few years later, one correspondent summed up the situation. Dickens, Carlisle, Coleridge,

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Charles Kingsley, Charlotte Bronte, Byron Hood, the son of the shirt, Elizabeth Barrett Browning,

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and a host of others are still remembered and read today by millions, while the works of Adam Smith,

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Malthus, Riccardo, McCulloch, and Mill lie undusted except by scholars.

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The contemporary American intellectual world was deeply anti-capitalistic. How could a man like

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Arrival in New York On August 3, 1940 the ship docked in New York

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City. Mises had not been there since 1931 when he had attended a conference of the International

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Chamber of Commerce in the midst of the Great Depression. In that year he had come as a

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distinguished representative. Now he arrived almost empty-handed. Fifty-eight years old

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He had to start his life anew. The worst year of his life lay ahead. Friedrich Unger had

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booked him a room, and Alfred Schütz was waiting for Ludwig and Margit at the dock.

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Their happiness upon seeing him was short-lived. Schütz had the unpleasant task of delivering

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a letter from Robert Calkins, the Dean of UC Berkeley, who told Mises that the school

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had no budget to hire him. They could raise some money in the form of a stipend, but this

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Mises would be modest, and Kalkins would therefore understand if Mises chose to accept a more

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attractive position elsewhere. A few days later, Howard Ellis wrote from Berkeley, thanking

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Mises for sending a copy of Nationale Economie and wishing him good luck. And that was it

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for Berkeley.

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Mark Loup wrote from California, where he had met Dean Kalkins, and recommended that

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Mises get in touch with the Rockefeller Foundation regarding a position at UCLA. In many other

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In other cases, the Foundation had facilitated the transition of emigre scholars by co-sponsoring

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chairs for them. This, Machlou believed, should be no problem in the present case. Mises thus

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spoke to his friends at the Foundation, and they gave him the green light by August 15th.

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All hope was now on Machlou to work something out, but to Mises' great disappointment the

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attempt failed. What should they do now? Ludwig and Margit decided to stay in New York for

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For the time being, where many of their European friends and acquaintances had also found refuge

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under similar conditions, they had already found suitable accommodation in a hotel. The

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next step was incomparably more difficult, finding new sources of income. Without the

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job at Berkeley, and with much of his assets frozen in Europe, Mises could count the days

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until his money would run out. He hoped to find academic employment in New York or elsewhere,

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But there was not much of a job market for economists. A few years later the GI Bill

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would create a panoply of new positions for professors in colleges and universities, but

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in 1940 there were only a few full-time positions available. It is true that the Federal Government

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had started hiring economists for New Deal agencies such as the National Resources Planning

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Board, and after the United States entered the Second World War in December 1941, Federal

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Social employment became a boon for economists. Roosevelt signed the G.I. Bill in 1944. The

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bill provided funds to send returning soldiers to colleges and universities, thus keeping

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them off the labour market. It cost the American taxpayer some $14 billion between 1944 and

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1956. In 2003, the Federal Government employed more than 3,000 economists, or about 15% of

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Peter Klein has argued that, due to these circumstances, the Second World War radically

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changed the outlook of American economics profession, which turned statist.

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But Mises had already been found unsuitable for government employment in the First World

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War in his native Austria, at a time when he was far less infamous as an opponent of

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interventionism. Imagine Mises in the US Office of Price Administration working under the

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Many European expatriates, among them many former Mises students and associates, such

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During the 1930s, US universities had absorbed many communist and social-democrat economists from Germany. For example, Emil Lederer, Adolf Löw and Edward Hyman found employment at the Graduate Faculty of Political and Social Science, New School for Social Research in New York, and Karl Lundauer became a professor at Berkshire University.

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To get into the private market for economists would take time, however, and time he did

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not have. It is true he enjoyed an excellent international reputation as a theoretician,

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but he lacked demonstrated experience in the American economy, and he was about to turn

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fifty-nine.

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I've already passed the age limit, wrote Mises in a letter to Mahlup dated August 7, 1940.

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This alone cannot have been a decisive obstacle. Richard Schiller, some ten years older than

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Mises, found a position at the New School for Social Research. Margit called on Machloub

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for help, stating that her husband was deeply depressed. He is able to serve and fight for

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an idea, but not for his personal destiny. Nevertheless, he had to find the job. He used

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his old contacts to arrange talks at various organisations in New York. On November 7th,

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For example, he addressed the banking seminar of Columbia University's School of Business

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on the problem of post-war reconstruction of Europe. Published in Trusts and Estates January

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1941, the publishers of Trusts and Estates distributed some 3000 copies over and above

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our usual circulation to leading educators and economists as well as institutional investors.

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Two weeks later he gave a presentation on his contributions to economic theory before

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the New York University Department of Economics. He lectured at Princeton University on December

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The 19th and, at the turn of the year, attended a meeting of the American Economic Association

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in New Orleans. The NYU address was eventually published as

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My Contributions to Economic Theory, Planning for Freedom and Sixteen Other Essays and Addresses.

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The Princeton invitation came from Morgenstern. In New Orleans, Mises met Erwin Fischer and

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his German assistant, Hans Corson. And on February 11, 1941, he gave a talk to the exclusive

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Accountants Club of America in a parochay suite of Manhattan's Waldorf Astoria Hotel.

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The invitation came from John T. Madden, the Dean of NYU's School of Commerce, who also

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told him that for the first time ever the club had consented to pay a honorarium, $50.

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The subject of the talk was post-war economic conditions in Europe. The club did not seem

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to be under the spell of academic economists, for it advertised for the talk by pointing

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Mises, although one of the leading economists of the world, is noted for his practical viewpoint

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and his ability to express himself in terms intelligible to the layman.

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Mises produced the usual result in his audience.

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One participant recalled that it was the clearest, soberest, and most thought-provoking analysis

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that I have heard, and arranged a follow-up meeting with Mises to continue the discussion.

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His other presentations produced similar results.

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The vigorous intellectual from Vienna impressed his audiences, but none of these appearances

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led to anything resembling a contract. The situation was desperate. However, one good

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side-effect of these activities was to make him better known among like-minded intellectuals

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and businessmen. Of course, Mises also sought direct contact with ideological allies and

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potential allies. The most important case in point was Henry Hazlitt, 1894-1993, who

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The two a few years before had written a very favourable book review of socialism, stating

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that Mises had written an economic classic in our time. Hazlitt later recalled how they

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met in New York.

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Sometime in 1940 I got a telephone call. The voice on the other end said, This is Mises

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speaking. As I've told many of my friends since, it was as if someone had called and

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said, This is John Stuart Mills speaking. I hadn't referred to Mises as a classic,

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And you don't expect a classic to call you on the telephone.

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Anyway, that led to our acquaintance. It was August, 1940. Hazlitt had a weekly column

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in the Times, and a few months later he brought Mises on board. Hazlitt might well have been

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Mises' first close American friend. Benjamin Anderson had moved to Berkeley, and Zilligman

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had died in 1939. During the first years in the New World, Mises in his social life could

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rely largely on friends and acquaintances from the Old World. Manhattan had become the nexus

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of European opposition elites trying to survive the war years on the American side of the Atlantic.

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Politicians, academics, artists, entrepreneurs and bankers whose lives were not secure on the

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Nanaji regime had chosen New York as their safe harbour. Marianne Hertzfeld, who spent the war

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years in London, asked Mises to extend her greetings to all her friends in New York and said,

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There are, I think, about a hundred people there whom I would like to see.

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Naturally, most of these people had a bourgeois or upper-class background, and many were Jews.

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Ludwig and Margit were certainly amazed when they discovered how many friends, colleagues,

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students, and even relatives had found their way to Manhattan.

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The Ungers, the Geiringers, the Schulers, the Kynes, the Kaliers, the Fürths, the Schützes,

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the Hoolers, Erich Vöglin, Felix Kaufmann, Immanuel Winter, Immanuel Winter-Nitz, Robert

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But Mises, Engel Janosy and many others, in fact Mises could have resumed his old private

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seminar, all of its members were in New York City, even his Vienna family doctor was there.

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Many other people, among them his closest friends from Vienna, had not made it. During

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the coming months and years, news of their terrible fates made it to New York. Emil Peels

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and his wife died in the German concentration camp. Their last sign of life was a letter

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Mr. Peerls wrote in 1943 to his sister Frieda Becher von Rüdenorf, chosen the Peerls and

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Mises had often skied together in the Austrian Alps. In July 1946 Mises wrote to Otto Friedländer

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that the terrible fate of Peerls had deeply shaken him.

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Ludwig Bethelheim-Gabilon was first separated from his family and forced to reside in a

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mass residence in Vienna. He was later deported and never seen again. Newspaperman Richard

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Schamatz met Bethelheim on the eve of his deportation. Schamatz survived the war in

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Vienna because he was married to an Aryan wife, but they lost all their material belongings.

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Victor Gretz had died after the Anschluss, and only his wife, Emmy, had managed to emigrate

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to the States. Ewald Pribham and his wife had committed suicide when they could not

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leave Belgium. Ewald's brother, Carl, had made it to Washington, where he continued

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his career in international organisations. There was still no news from Margit's daughter,

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Mises established contact with Austrian political expatriates.

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After about a year in exile, he became more formally involved in the work of various Austrian

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exile organisations, which mushroomed after the United States entered the war in December

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1941. From the beginning, Mises was often asked for help, by friends, acquaintances

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and often people who only knew him indirectly. In many cases they were former students or

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employees who had no records from Europe. He patiently wrote letters of recommendation

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and certificates of class attendance and in some cases this was instrumental in providing

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them with a job. For example Henri Bund, Otto Ehrlich, Bert Hoselitz, Karl Krupp, Leon Kruppe,

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of Leuble, Edmund Silberner, Luise Sommer, Walter Zultbach. He also tirelessly wrote

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letters of support and made other efforts to help those who had not yet made it to the

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safe haven of America, for example in the cases of legal historian Hermann von Grimeisen

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and of Paul Manteau and his family. The letters that Machloop and a few others wrote for Mises

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did not bring the desired result. He must have started to envy Hayek, who wrote from

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In the same letter Hayek confidentially announced his plan to leave the country at some later

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at one time he lamented the risk of destruction of his books through firebombs. These risks

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were not inconsiderable in an empty house with nobody on the spot to put out a firebomb,

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which, if one gets there promptly, is the easiest thing in the world. Mises, too, would

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have had the nerves to live under occasional bombings, but he could not live indefinitely

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He had some money in the United Kingdom, revenue from the sale of his books, which could keep

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him going for some more weeks or months. Hayek managed his bank account in England, but wartime

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foreign exchange controls made it impossible to transfer the sums out of Britain, and it

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was only a matter of time until it would become impossible to withdraw anything from the account.

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It was, however, possible to export commodities, and thus Hayek entered the book merchant business

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He withdrew the money from Mises' account and started buying precious books, among them

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a first edition of The Wealth of Nations and two sets of the complete works of Jeremy Bentham,

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which he then forwarded to Mises through Habla in Harvard. This would certainly not have been

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efficient in normal times, but under the circumstances it was the only way to get any money out of

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the country. They used this device at least until 1948, because the United Kingdom maintained

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and a regime of foreign exchange controls even in the post-war period.

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National Bureau of Economic Research The New School for Social Research had absorbed

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many social scientists from Central Europe and even some of Mises' associates, such

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as Richard Schiller. Mises never received an offer. Hayek received one in August 1940,

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but declined out of loyalty to his colleagues at LSE. Eventually it would once again

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can be the Rockefeller Foundation that would fund Mises. Joseph H. Willits, who at the

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time headed the Foundation's social sciences division, signed a $2,500 grant to the National

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Bureau of Economic Research to put Mises on its payroll for one year, starting December

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15, 1940. The stipend was less than a third of his salary in Geneva, but given the circumstances,

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Mises would have been satisfied to find anything at all. Barzun observes in those years that

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Professional salaries in American universities reached the not very dizzy height of nine

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or ten thousand dollars a year, and then added the following remark, the lower depth of the

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profession's earning power are painful to think of and undercut any irony. For instance,

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in 1940 there were 433 junior colleges whose salary scale ranged on average from 1,572

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Mises' contacts with other NBER economists seem to have been ephemeral. He ran a seminar

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at MBER's hillside offices but found it uninspiring. To Hayek he wrote,

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My seminar is going on. Last week M and L took part. I think that their impression was

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that it is still far below the Sturban Ring standard, but everything takes time. It turned

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out, however, that he did not have the time to build up a group of permanent participants

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as in Vienna. All of the attending students were quickly absorbed in government jobs.

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The war years were a strong growth period for the Federal Government, which hired thousands of young graduates all over the country. During the first year at NBER, Mises continued to write in German, which few or none of his colleagues could read. He must have thought he would one day return to an academic position in Europe, but was there any real chance that this could happen? When he arrived in New York, this might have been his plan and his hope, but the prospect grew ever dimmer over the course of 1941.

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His manuscripts were translated into English. The NBER officer responsible for handling

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publication matters, a certain Martha Anderson, also tried to find a translator for one of

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his book manuscripts, probably the original German manuscript of what was later published

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as Omnipotent Government. In November 1941, Anderson proposed Max Eastman for the job.

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Eastman was a New York journalist who had already translated Das Kapital. Mises replied

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The money from the Rockefeller Foundation was not enough to live on, and in 1941 it

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was almost all the income they had. He had never known such destitution. His family had

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not been wealthy, but they had always been comfortable, had always had help in the household,

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But now they could barely pay for a restaurant or for tickets to the theatre or opera, markets

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started training as a secretary. Even more depressing was the ideological state of affairs

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in the very countries that were at present the bulwark against international communism

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and national socialism. Things had deteriorated considerably since its last trip to the States

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in 1931 when progressive interventionism was already at a previous high point. In the years

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As if Roosevelt knew to you, the political gospel preached from the press and the pulpits

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had shifted yet further to the left. The Soviet Union was now held in high regard, and Communistic

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schemes were discussed seriously, while the free market was derided as an atavism of an

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unenlightened past. It was only a matter of time before the United Kingdom and the United

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States would become fascist or communist or some variant thereof. Was this a future worth

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dying for. Without hope for the future, was it worth living in the present? Where were

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the voices of dissent, except for a scattered few, like Henry Hazlitt and Lawrence Furtick?

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Where were the economists with enough backbone to resist the Keynesian temptation, the very

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embodiment of statist longings? How long could his disciples hold out, insecure as

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they were, in their status as emigres? It was at this point that Hayek, to whom he must

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have confided his desperation, reassured him that he need have no fear about my becoming

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converted to Keynesianism. Though for Hayek, too, the future looked bleak. I agree entirely

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with what you say about the horrible state of economic thinking here and in the USA,

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that at the present time, when one can at least have some hope for the immediate future,

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the long-run outlook should be so dark as really dreadful. He went on, I'm trying hard

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I want to show to people how this present trend leads inevitably to economic decay and

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fascism and I shall follow up my pamphlet with a more popular booklet, probably in one

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of the Sixpenny series, on which I am now working apart from the larger book which is

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slowly progressing. Three months later Hayek reported to the publication of his first article

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on the influence of scientism on social thought. Mises did not believe he could contribute

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to turning the tide. His career was in a deep slump. He was completely at odds with the

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the prevailing scientific fashions in the United States, and he saw no way to have any

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impact on public opinion. Ironically, one factor that barred him from reaching an audience

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through his writings was that US publishers strictly aimed at the mainstream. The greatest

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champion of capitalism could not make himself heard because in a world dominated by the

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statist ideology, his books did not seem profitable enough to enjoy the support of

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of Commercial Publishers," he wrote to Hayek.

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I've been very busy these last months in writing my posthumous works.

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I do not believe that it will be possible for me to publish anything other than small

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articles and periodicals.

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To Machloupp, he wrote, I do not know why I am working, but I've been very productive.

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Mises reached an absolute low point in April 1941.

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Margit had been ill since early March of flu and sinus troubles to the point that she could

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Mises, usually extremely discreet about his emotions, lamented in a letter to Hayek, Margit

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is not yet totally recovered. The thing seems interminable. It was also quite impossible

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to cheer her up, because she was still anxious about the fate of her daughter. Thus he was

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left alone with his sorrows and apprehensions. He had left Switzerland because he refused

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to depend entirely on the goodwill of one party, the Swiss Government. But in the United

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States he fared no better. All his money came from the Rockefeller Foundation, which made

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it clear to Mises what his status was now. While left-wing lunatics and the cranks of

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the imaginary science of quantitative economics received lucrative contracts with the new

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School of Social Research, Mises had to live on the equivalent of a post-doctoral stipend,

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And he was made to understand that even this amount was not meant as a compensation for

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his service to economic science, but as something between a pension and charity for an old man

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who could not get along otherwise. Mises was not a man to attach too much importance to

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material things. He once told Margit that, if she was after riches, she had married the

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wrong man. But neither was he the type of intellectual that Ayn Rand depicted in her

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The libertarian philosopher who in dire straits would descend stoically from his chair at

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the university to work behind the counter of a small town burger joint. Had Mises ended

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up flipping hamburgers, his heart would have broken. And what would have happened to economics,

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the Austrian School and human liberty if Mises had had to give up intellectual work? He had

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not yet published a single piece written in English. He had not yet encountered even one

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One of his later famous American students, he had left the world of a revolutionary treatise

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on economics that nobody could read during the war and which nobody would care about

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when the war was over. Mises would have remained an important figure in the history of economic

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thought, but the laissez-faire Austrian School would never have come into being.

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These darkest days were not without some good news. Even though it may have seemed insubstantial

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At first, Henry Hazlitt had brought Mises in touch with the New York Times, and in March

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1941 Mises wrote his first editorial. Apparently, this was his only editorial in 1941. In the

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spring of 1942 he published three further editorials, all of which dealt with the crucial

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logistical problems of Germany's war effort. In 1943, then, he published the last four

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editorials which dealt primarily with problems of post-war reconstruction, especially monetary

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Problems. For each of these articles he received $10. In May 1941 he took part in the meetings

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of a group closely associated with the Austrian American League. The group included Dietrich

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von Hildebrandt, Richard von Schüller, Raoul Ahlenheimer, Erich Hula and Otto Kalier Nierenstein.

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The frontman in the league was von Hildebrandt, but the organizational driving force was the

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secretary Otto Kalier, who had probably brought his cousin Mises on board.

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In June 1941, Mises and other members of this group formed the Austrian Committee to promote

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the independence of Austria after the end of the war. Leadership lay apparently in the

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hands of Richard von Schiller. Most members of the committee were at least sympathetic

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to the prospect of re-establishing a monarchy in Austria. This alone would have been a decisive

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stumbling block for the cooperation of the committee with Austrian expatriates of Republican

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convictions, especially with the Social Democrats. They still could not agree on the fundamental

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and the principle of Austrian independence. They still pursued the old Anschluss agenda,

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this time without Hitler. Ernst Hoare pointed out that until 1945 the expatriate leadership

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of the Social Democrats avoided making any statement that could have been interpreted

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as a commitment to Austrian independence or to the existence of an Austrian nation.

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Planning for after the war still occupied a prominent place in Mises's work. On May

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On the 20th, 1941, he reported to Young that he had made good progress on his research

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project, a study of the social and economic problems of Central and Eastern Europe, which

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Mises hoped could serve as a basis for post-war reconstruction in this region. He said he

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would start writing it soon and he must have finished it by mid-July when he sent out copies

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to friends and colleagues. In this 43-page memorandum, Mises restated the political and

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Economic Case, for the establishment of an East European Union with a strong central

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government growth through free trade and laissez-faire, response to the problems of linguistic minorities

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and protection against the three mighty neighbours.

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The new plan differed from the proposals he had made in early 1938, in that the proposed

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Eastern Democratic Union, EDU, was to include not only the countries in the Danube Basin,

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and virtually all of Eastern Europe, including the territories that in 1933 formed the sovereign

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state of Albania, Austria, Bulgaria, Czechoslovakia, Danzig, Estonia, Greece, Hungary, Latvia,

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Lithuania, Poland, Romania and Yugoslavia, as well as large parts of Prussia. The proposed

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new political entity would thus cover 700,000 square miles, with about 120 million residents

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using 17 different languages. Through the British Embassy in Washington, D.C., Mises

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sent copies of the July version to Hayek, and in May 1941 Mises probably gave a lecture

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at Yale discussing his plan for an Eastern European Union. In another paper that he had

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finished writing by the end of May, he pointed out that his plan for an Eastern Union would

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complement similar ideas for the establishment of a Western Union. This approach, the formation

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of Political Blocks, as they in fact eventually came to be established after the Second World

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War, NATO in the West and Warsaw Pact in the East, was more promising than the approach

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of the League of Nations in the interwar period, which consisted in providing for the lack

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of a peace ideology by the establishment of a bureau and a bureaucracy. He went on, It

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is the general belief today that the sovereignty of the small nation has proved its impracticability

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and that they have to disappear as independent states. This is true under present conditions,

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even the United States must be reckoned among these small nations. I believe that the only

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thing which the Western democracies can do is to form a union for defence. I do not see any other

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reasonable solution for the post-war problem than a closer political and military union

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between the menaced democracies. The great weakness of his own plan was that it, too,

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was mute on the question of the peace ideology that could provide for the political and economic

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integration of Eastern Europe. Some ten years later, Mises implicitly confessed this in private

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correspondence with Salvador de Maduriaga. The late spring of 1941 greeted Mises with

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the most welcome opportunity. He happened to meet again with Señor Montes de Oca,

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a high official of the Mexican Treasury and executive president of the Banco Internacional,

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Lewis Montes de Oca was a hard-nosed businessman and a great admirer of Mises' work. As early

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as 1937 or 1938 he had invited him to visit Mexico City for a series of lectures, but

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Mises had not accepted the invitation. It must have been a most pleasant surprise for

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both of them to meet again in good health in Manhattan, and Montes de Oca instantly

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renewed his invitation. Mises should come for two months to Mexico.

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It was the first true sign of recognition in eighteen months. Mises was happy and Margit

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was happy that her husband was happy. Mises and Montes de Oca also discussed the project

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of translating Mises' socialism into Spanish. Montes de Oca proposed to do the translation

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himself from the French edition, when Mises praised this edition for its accuracy and

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style. Montes de Oca did not read German. He also proposed a concrete price for the

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rights to the Spanish edition, $200 a month salary for Mises at that point. All this was

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very good news, and as soon as his Mexican friend departed, Mises set out a syllabus for

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his projected visit to the National University of Mexico.

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He proposed eight lectures in English on the economics of capitalism, socialism and interventionism.

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Moreover, one lecture in French on the gold standard and managed currency, and also two seminars, one dealing with money and banking, the other with the part played by economic and social doctrines in political controversies of today. He sent these proposals to Montes de Oca on June 12.

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A few weeks later Ludwig and Margit left Manhattan for a long vacation in New Hampshire's White

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Mountains. They travelled by train on July 16 and arrived on the same day at their destination,

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Glenn House in Gorham, New Hampshire, at the base of Mount Washington, the highest peak

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in Northeastern America. Almost every day they hiked in the mountains. On the first

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weekend he briefly returned to New York City. On July 21 and 23 he lectured at NYU's School

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School of Commerce on the Economics of Government Regulation of Business. Although Mount Washington

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was a much-visited site, Ludwig and market were by themselves as soon as they were far

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enough away from the roads. Many hundred cars pass our place every day, as old people are

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eager to glance five minutes at the peak to take a snapshot and to rush away, wrote Mises

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to Hayek on August 14, 1941. The scenery of the White Mountains reminded them of the Alps,

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In the serenity of defiant rocks, cool air and wide views, where sky and earth held court

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in splendid majesty, he too could elevate his mind again above the material circumstances

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into which great events had catapulted him. Here he considered again the big picture and

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his place within it. It was probably here that Mises resolved himself to begin a new

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Margaret must have been extremely pleased to see her husband regaining energy to such

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an extent that he climbed most of Mount Washington's 6,288 feet. Near the end of their stay at

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Glen House, more good news came with the publication of the Atlantic Charter on August 14. The

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The US government seemed determined, after all, to support the United Kingdom in the

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war, and to create a post-war order based on liberty. Mises also felt greatly relieved

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by the Russian entry into the war against Germany.

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The holiday had come just in time. After the United States entered the war, vacationing

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was seen as unpatriotic, and the Miseses abstained from it. Back in New York, he threw himself

340
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Mises moved into work with new verve. From now on things would improve in his life slowly

341
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but steadily. In early October he and Margate moved into the apartment where they would

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remain for the rest of their lives. It was subject to rent control laws. Margate had

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found the three-bedroom apartment at 777 West End Avenue in Manhattan.

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Mises continued to work for a few weeks on the proposal for the establishment of an Eastern

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and Democratic Union. By October he had completed a memorandum, one of the first pieces that

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he himself had written in English, and which contained his political testament for Eastern

347
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Europe. Mises' thoughts now turned to America. To Hayek he wrote,

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"'As I do not want to increase further the collection of my posthumous works I am writing

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now in English. I hope that I will succeed to finish within a year of volume dealing

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and critically with a whole complex of anti-orthodox doctrines and their consequences." He went

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on,

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"'Your essays on the counter-revolution of science are the most valuable contribution

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to the history of the decay of Western civilisation. I hope that you will pretty soon publish the

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whole book.'

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I am, however, rather sceptical in regard to the practical results of our endeavours.

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It seems that the age of reason and common sense has gone for ever. Reasoning and thinking

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have been replaced by empty slogans.

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A few days ago, Elvin Hansen delivered a lecture on post-war economic reconstruction. The old

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stories about full employment, scarcity of foreign exchange, the need for foreign exchange

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control and planning, more self-sufficiency, etc. He did not even mention the problem of

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capital shortage. He seems to believe that taxing the rich would make it possible to

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maintain the pre-war standard of living of the masses. Two centuries of economic theory

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The three were in vain, as they could not kill the mercantilistic prejudices.

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The audience, many ex-members of the Verein für Sozialpolitik, expressed full agreement

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with the lecturer.

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While they made preparations for the trip to Mexico, another piece of news made Mises's

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day and gave him hope for the future.

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On December 8, 1941, the United States declared war on Japan after the Japanese raid on Pearl

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Harbor.

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The Americans were finally in business.

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One could save Hitler now.

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A few months later, Mises wrote to a friend, a German Protestant minister in Massachusetts.

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Of course, the war is a very unfortunate thing, but you are quite right.

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It was inevitable, and it has to be fought to the end.

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It is necessary to establish a new order where people who break the peace have to be treated

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like those who resort to violence within each country.

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Mises seems to have fallen back into what in more sober moments he called the dictatorship complex.

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He blithely assumed that the institutions entrusted with the new order would use their enormous power only for those purposes of which he, Mises, approved.

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In his monetary thought he had overcome this error, most notably in the context of his eventual rejection of the gold exchange standard.

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The American entry into the war prompted various Austrian personalities to join forces and create

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more formal organisations to prepare the reconstruction of Austria after the war,

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which, they were sure, would end with an allied victory. Already in anticipation of the event,

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and prompted by Roosevelt and Churchill's Atlantic Charter, Richard von Kudanova-Kalergi,

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a close ally of Otto von Habsburg, had submitted a petition to the US Government

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for a separate treatment of Austria after the war. Mises signed the petition along with many other

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leading Austrian expatriates. After Pearl Harbor, the Austrian committee assembled in several

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meetings during the month of December to discuss how to proceed. After a meeting on December 13th,

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Mises prepared a one-page manifesto that outlined a political post-war order in Austria that would

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be based on the principle of individual liberty. The paper probably resulted from the discussions

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In any case, the document enthusiastically welcomed the Atlantic Charter as the

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constitution of a new community of all free people, and it expressed a wish for an independent

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Austria after the war. According to the most important stipulations of the document, the

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new Austria would be a state of freedom and democracy even though the question of a concrete

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form of state, parliamentary democracy, monarchy, etc., was explicitly left open. Moreover,

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Neither the new Austria would not insist on the title of a sovereign country, because

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sovereignty was no longer consonant with the spirit of the time, but would instead seek

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integration into an Eastern European Union and a new League of Nations. But the Austrian

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Committee was but one of many similar groups that started popping up, and Mises was also

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a member of Austrian Action, a group led by Ferdinand Count von Tjanin. It was clear

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that an effective representation of Austrian interests in America was impossible under

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under these conditions, and the leaders of the various groups decided to join forces.

402
00:38:30.120 --> 00:38:35.280
In early February 1942, Mises, then in Mexico City, received a telegram with the invitation

403
00:38:35.280 --> 00:38:40.040
to join the newly formed Austrian National Committee. The telegram was signed by Walter

404
00:38:40.040 --> 00:38:46.520
Schuznick, possibly a relative of the last Chancellor of Free Austria, and Hans Roth.

405
00:38:46.520 --> 00:38:52.060
In 1941-1942, Schuznick was the driving force behind attempts to bring a group of mostly

406
00:38:52.060 --> 00:39:14.180
Six weeks in Mexico

407
00:39:14.180 --> 00:39:20.700
The trip to Mexico late January to March 1942 by far surpassed their expectations. They were

408
00:39:20.700 --> 00:39:25.860
were treated with the highest respect. Hotel reservations had been made at the local wits,

409
00:39:25.860 --> 00:39:31.380
and Mises found an audience prepared for and receptive to his message. He started lecturing

410
00:39:31.380 --> 00:39:36.580
on January 14th, and finished his programme by February 20th. Besides his course at the

411
00:39:36.580 --> 00:39:41.500
School of Economics, which he taught in English, he also gave two lectures in French at the

412
00:39:41.500 --> 00:39:47.100
Independent School of Law. The course at the School of Economics paid 800 US dollars, and

413
00:39:47.100 --> 00:39:52.020
For the lectures at the law school, he received 50 US dollars. The same files from which this

414
00:39:52.020 --> 00:39:56.700
information comes contain his very detailed lecture notes. At that point, he probably

415
00:39:56.700 --> 00:40:01.000
did not yet feel quite comfortable speaking in English, which allowed for a detailed reconstruction

416
00:40:01.000 --> 00:40:02.500
of the matters he dealt with.

417
00:40:02.500 --> 00:40:08.600
The course only attracted some 8 to 14 students. Still, Mises thought it was a great success.

418
00:40:08.600 --> 00:40:13.100
The audience was, of course, small, as the students mostly do not understand foreign

419
00:40:13.100 --> 00:40:18.780
Sciences. Montes de Oca attended each session, but Mises had particularly animated discussions

420
00:40:18.780 --> 00:40:24.200
with Senor Eduardo Hornedo. Margit stayed in and around the hotel, and in the evenings

421
00:40:24.200 --> 00:40:29.000
Ludwig joined her and often took her out. They also spent many evenings at the home

422
00:40:29.000 --> 00:40:34.300
of Montes de Oca. At these meetings Mises again and again expressed his pessimism about

423
00:40:34.300 --> 00:40:39.360
the future, and again and again his Mexican host protested that it was not too late to

424
00:40:39.360 --> 00:40:45.200
to start a fight for liberty and sound economic policies. Montes de Oca was indeed firmly

425
00:40:45.200 --> 00:40:51.460
convinced that the best place to start this fight was Mexico. He had made Mises a job

426
00:40:51.460 --> 00:40:57.880
offer by correspondence even before his Austrian guest had left New York. The Bankers Association

427
00:40:57.880 --> 00:41:02.640
and the Chamber of the Mining Industry, two of the three most important Mexican business

428
00:41:02.640 --> 00:41:08.960
associations, were interested in hiring Mises for an extended stay as an economic adviser.

429
00:41:08.960 --> 00:41:13.520
Mises wrote back that the offer was very flattering and tempting, and that he was anxious to get

430
00:41:13.520 --> 00:41:18.320
more detailed information about the functions which it is expected I would fulfil.

431
00:41:18.320 --> 00:41:22.720
Six weeks later Montes de Oca replied with a firm offer. According to his proposition

432
00:41:22.720 --> 00:41:27.700
Mises would become the head of the economics department of the two business associations,

433
00:41:27.700 --> 00:41:32.580
with sufficient personnel to assist him, and at a comfortable monthly salary of one thousand

434
00:41:32.580 --> 00:41:38.660
Mexican pesos, a lunch for one person at the ritz cost three or four pesos. He would also

435
00:41:38.660 --> 00:41:42.300
He would be teaching courses and seminars at any department he wished at the National

436
00:41:42.300 --> 00:41:46.940
University of Mexico and at the Colegio de México, and he would be free to take up other

437
00:41:46.940 --> 00:41:52.540
paid teaching assignments. The offer was for three years and could become effective anytime.

438
00:41:52.540 --> 00:41:57.060
Mises would not even have to return to the United States after his upcoming visit. This

439
00:41:57.060 --> 00:42:02.140
was a great temptation. Had the offer come a year earlier, Mises would probably have

440
00:42:02.140 --> 00:42:07.100
accepted it on the spot, but he had since made new plans. Was his future not in the

441
00:42:07.100 --> 00:42:12.220
In the United States, Montes de Oca tried to bring Mises to an early commitment by correspondence,

442
00:42:12.220 --> 00:42:16.660
but his Austrian friend remained steadfast. He would first pay a visit to each of the

443
00:42:16.660 --> 00:42:21.060
two business associations before making a decision.

444
00:42:21.060 --> 00:42:28.260
Upon his arrival in Mexico City, Mises conducted very wide-ranging talks with his Mexican hosts.

445
00:42:28.260 --> 00:42:32.980
He even started to write a couple of words in Spanish, and at the request of his hosts,

446
00:42:32.980 --> 00:42:37.980
He began working on a memorandum analyzing Mexico's economic problems. In the course

447
00:42:37.980 --> 00:42:42.560
of the next few weeks he perused the statistical yearbooks of the country and became acquainted

448
00:42:42.560 --> 00:42:47.440
with other literature on Mexican conditions. He read the press to the best of his ability

449
00:42:47.440 --> 00:42:52.680
and led many discussions with his host and other people. Slowly a more concrete picture

450
00:42:52.680 --> 00:42:57.700
of Mexico became clear to him, which he later described in a letter to Hayek.

451
00:42:57.700 --> 00:43:02.240
Mexico is a country without industry and very short of capital. The soil is in the greater

452
00:43:02.240 --> 00:43:08.400
are part of the country very poor. The result is that they have to import wheat and maize.

453
00:43:08.400 --> 00:43:12.920
Mises meant what Americans call corn, but the rulers, generals, trade union leaders

454
00:43:12.920 --> 00:43:19.080
and pink intellectuals intend to start industrialisation by ruthless confiscation of capital. Neither

455
00:43:19.080 --> 00:43:23.680
this attitude nor its effects differ from conditions in other countries, but really

456
00:43:23.680 --> 00:43:29.040
amazing is the fact that there are some people, of course small elite only, who have a very

457
00:43:29.040 --> 00:43:34.360
making insight into the problems involved and try to educate the intellectuals.

458
00:43:34.360 --> 00:43:38.600
Then Mises went on to compare this Mexican elite very favourably with the small group

459
00:43:38.600 --> 00:43:43.160
of economists who, according to Hayek, resisted the trend toward government omnipotence in

460
00:43:43.160 --> 00:43:47.520
Great Britain. Speaking of his Mexican hosts, Mises said,

461
00:43:47.520 --> 00:43:53.440
You cannot find such men in other countries. Contrary to your statement in the Nature article,

462
00:43:53.440 --> 00:43:58.640
everybody in this country advocates all-round planning. Sir William's ideas, published

463
00:43:58.640 --> 00:44:04.440
in the London Times a few days ago, all economists, businessmen and pressure groups sympathise

464
00:44:04.440 --> 00:44:09.720
with. They are convinced that current events have demonstrated in an irrefutable way the

465
00:44:09.720 --> 00:44:16.960
superiority of the post-office system. People do not learn anything, they despise theory,

466
00:44:16.960 --> 00:44:22.400
and they interpret facts from the point of view of their errors and prejudices. Sir William

467
00:44:22.400 --> 00:44:28.000
is Lord Beveridge. Still the fact remained that Mexico was a very poor country and that

468
00:44:28.000 --> 00:44:33.480
The Forces of Reason were weak. Luis Montes de Oca must have sensed that Mises was not

469
00:44:33.480 --> 00:44:38.520
exactly enthusiastic about another Chamber of Commerce career and brought up the prospect

470
00:44:38.520 --> 00:44:43.320
of a research organisation under Mises' leadership, a private institute of the social

471
00:44:43.320 --> 00:44:49.120
sciences. This was much more to the liking of his Austrian guest, and when Mises departed

472
00:44:49.120 --> 00:44:54.120
he promised that he would write a paper for Cuadernos Americanos, a journal managed by

473
00:44:54.120 --> 00:45:22.120
The Austrian National Committee Ludwig and Margit returned to New York in

474
00:45:22.120 --> 00:45:27.600
In March, a letter from Machloop had arrived informing them of another unsuccessful attempt

475
00:45:27.600 --> 00:45:32.440
to secure a suitable job for Mises, this time at Rochester. The chairman of the department

476
00:45:32.440 --> 00:45:37.820
had told Machloop that he should be ashamed to approach so distinguished an economist

477
00:45:37.820 --> 00:45:42.280
as Professor Mises with the smallest salaries at our disposal.

478
00:45:42.280 --> 00:45:48.560
Fortunately, the Rockefeller grant to NBER had been extended, though apparently not without

479
00:45:48.560 --> 00:45:54.840
and Resistance. Mises applied for the extension in December 1941, based on a six-page report

480
00:45:54.840 --> 00:45:59.540
on his research activities in the previous year. The extension was not confirmed until

481
00:45:59.540 --> 00:46:05.520
mid-February, but it is possible that the delay was the result of his trip to Mexico.

482
00:46:05.520 --> 00:46:10.080
For the next few months, Mises took an active role in the meetings of the newly constituted

483
00:46:10.080 --> 00:46:16.700
Austrian National Committee. As he said on many occasions in private discussions and correspondence,

484
00:46:16.700 --> 00:46:19.740
He was extremely pessimistic with regard to Europe's future.

485
00:46:19.740 --> 00:46:24.540
You can't have a reasonable state of affairs with unreasonable people.

486
00:46:24.540 --> 00:46:29.180
I do not believe that a member of the Hitler Youth, or of the equivalent groups in Italy,

487
00:46:29.180 --> 00:46:34.540
Hungary, or so on, can ever turn to at honest work and non-predatory jargs.

488
00:46:34.540 --> 00:46:38.700
Beasts cannot be domesticated within one or two generations.

489
00:46:38.700 --> 00:46:43.480
But true to his motto, this was no reason for him to step back in resignation.

490
00:46:43.480 --> 00:46:48.620
On the contrary, he threw himself into work preparing post-war policies and he encouraged

491
00:46:48.620 --> 00:46:53.960
his correspondents to do the same. Mises contributed several memoranda dealing with the principles

492
00:46:53.960 --> 00:47:00.180
of post-war reconstruction, Entwurf von Richtlinien für den Wiederaufbau.

493
00:47:00.180 --> 00:47:04.840
The Austrian National Committee was a creation of Otto von Habsburg, who had the ear of the

494
00:47:04.840 --> 00:47:09.600
American administration and turned out to be the common denominator for the feuding

495
00:47:09.600 --> 00:47:37.600
Autosuccess also boosted the monarchial principle. For years the leaders of the legitimist government

496
00:47:37.600 --> 00:47:42.800
had been the most ardent champions of Austrian nationhood. The movement had been suppressed

497
00:47:42.800 --> 00:47:48.880
before 1933 because Austria's neighbours and its former war enemies had threatened with diplomatic

498
00:47:48.880 --> 00:47:53.760
and military sanctions in case of attempted restoration. When the suppression stopped,

499
00:47:53.760 --> 00:47:59.920
the legitimists very quickly gained political ground. By 1938 Otto von Hapsburg had been

500
00:47:59.920 --> 00:48:13.080
He must have at least toyed with the idea of re-establishing his dynasty after the war,

501
00:48:13.080 --> 00:48:17.120
and many devoted followers, as well as the usual careerists who sensed an opportunity

502
00:48:17.120 --> 00:48:22.300
for political windfall profits, encouraged him to pursue this strategy. These circles

503
00:48:22.300 --> 00:48:28.500
of Austrian expatriates generally refer to Otto von Habsburg as His Majesty Kaiser Otto

504
00:48:28.500 --> 00:48:33.840
and called him Imperial Highness. Mises himself would continue to use this title in correspondence

505
00:48:33.840 --> 00:48:39.440
with Habsburg long after the prospect of a restoration of the Austrian monarchy had faded.

506
00:48:39.440 --> 00:48:44.140
In the heated days of the Second World War, many Austrian expatriates were betting on

507
00:48:44.140 --> 00:48:49.000
a political return of the Habsburg dynasty after the war. Mises' former colleague at

508
00:48:49.000 --> 00:48:53.360
the University of Vienna, Heinrich Graf von Degenfeld, was one of the staunch supporters

509
00:48:53.360 --> 00:48:57.680
of a Monarchical Restoration on Legitimist Grounds.

510
00:48:57.680 --> 00:49:03.560
In mid-April 1942, Habsburg asked Mises and a few other men for their detailed opinion

511
00:49:03.560 --> 00:49:09.800
on some 40 to 50 questions concerning strategic and tactical problems that Habsburg confronted

512
00:49:09.800 --> 00:49:14.080
in his double capacity as the leader of the Austrian National Committee and of the House

513
00:49:14.080 --> 00:49:19.640
of Habsburg. Mises put this job on the front burner and answered the questionnaire within

514
00:49:19.640 --> 00:49:25.400
in a week. Only one part of Mises's confidential report survived, the one in which he comments

515
00:49:25.400 --> 00:49:29.400
on the conditions under which a restoration could be achieved. Mises wrote that there

516
00:49:29.400 --> 00:49:35.800
was no contradiction between national self-determination and a monarchial regime, provided that the

517
00:49:35.800 --> 00:49:41.320
monarchy was established by a free referendum. This point of view reflected the Polish heritage

518
00:49:41.320 --> 00:49:43.320
of its Author.

519
00:49:43.320 --> 00:49:49.840
Poland had, in fact, had an elective kingdom from 1573 to 1795.

520
00:49:49.840 --> 00:49:55.040
The aristocratic parliament, the same, elected the king by unanimous vote.

521
00:49:55.040 --> 00:49:57.960
But Mises did not base his argument on historical precedent.

522
00:49:57.960 --> 00:50:05.160
Rather, he argued that only an elected monarch enjoyed a secure basis for his reign, enthronement

523
00:50:05.160 --> 00:50:10.120
on the basis of legitimist claims, against the will of the people could not last.

524
00:50:10.120 --> 00:50:16.240
was likely to be resisted and eventually overthrown. As an alternative approach, Mises sent along

525
00:50:16.240 --> 00:50:20.720
the memorandum containing his proposal for the establishment of an Eastern Democratic

526
00:50:20.720 --> 00:50:26.000
Union. The Austrian National Committee united all Austrian right-wingers and provided them

527
00:50:26.000 --> 00:50:32.240
with political representation in Washington, D.C., in the person of Egon Ranshoven-Wertheimer.

528
00:50:32.240 --> 00:50:37.860
One success of this group was the proclamation of Austrian Day on July 25, 1942, by twelve

529
00:50:37.860 --> 00:50:42.660
Both State Governors and U.S. Secretary of State Cordell Hull declared that the United

530
00:50:42.660 --> 00:50:48.140
States Government had never recognized Hitler's annexation of Austria. This dissociation of

531
00:50:48.140 --> 00:50:53.060
German villains and Austrian victims would remain the one common position of the various

532
00:50:53.060 --> 00:50:59.160
Austrian right-wing expatriate groups throughout the war, and here they achieved a clear success.

533
00:50:59.160 --> 00:51:04.020
The expatriate Social Democrats never wavered from the agenda of a greater Germany. Mises

534
00:51:04.020 --> 00:51:09.420
Mises took part in a plenary meeting of the Austrian National Committee on April 22, 1942,

535
00:51:09.420 --> 00:51:13.700
and a month later he was elected to a subcommittee on post-war reconstruction.

536
00:51:13.700 --> 00:51:19.240
In June 1942, he also took part in a subcommittee on foreign policy, where it appears that he

537
00:51:19.240 --> 00:51:21.620
had a major impact.

538
00:51:21.620 --> 00:51:26.960
The first sessions discussed and drafted a Declaration of the United Free Austrians based

539
00:51:26.960 --> 00:51:30.500
on the December 1941 Manifesto of the Austrian Committee.

540
00:51:30.500 --> 00:51:35.300
In contrast with that document, however, the declaration asserted that Austria had been

541
00:51:35.300 --> 00:51:41.280
coercively taken over by the Nazis and that it was therefore under de facto occupation

542
00:51:41.280 --> 00:51:47.540
by a foreign army. The declaration also de-emphasised integration into international political federations

543
00:51:47.540 --> 00:51:53.500
and emphasised the concept of sovereignty. Most important, the declaration avoided the

544
00:51:53.500 --> 00:51:58.780
question of which form of government Austria should adopt after the war. According to the

545
00:51:58.780 --> 00:52:03.220
As the earlier manifesto, the form of government should be determined through the deliberation

546
00:52:03.220 --> 00:52:07.900
of a national assembly, but the declaration was mute on this point because a monarchist

547
00:52:07.900 --> 00:52:12.580
faction under the leadership of Mises' former colleague, Count Degenfeld, wished to maintain

548
00:52:12.580 --> 00:52:18.660
the option of a legitimist foundation for a future Austrian constitutional monarchy.

549
00:52:18.660 --> 00:52:23.420
For the time being the compromise was good enough for Mises and other republicans. The

550
00:52:23.420 --> 00:52:28.220
The important thing was that some agreement be reached as a basis for the rest of the

551
00:52:28.220 --> 00:52:35.420
agenda. Mises outlined this agenda in an Aktionskalender, a project schedule he seems to have circulated

552
00:52:35.420 --> 00:52:40.780
within the Committee. According to this schedule, the next step would be to enter a negotiations

553
00:52:40.780 --> 00:52:46.060
with two left-wing groups of Austrian expatriates to support a common declaration. Then the

554
00:52:46.060 --> 00:52:50.460
results should be published and further negotiations started, this time with the Czechs and the

555
00:52:50.460 --> 00:53:11.660
But it did not come to pass, and apparently Mises gave up active participation in the

556
00:53:11.660 --> 00:53:16.540
committees and did not even attend the dinner in honour of Otto von Habsburg's 30th birthday

557
00:53:16.540 --> 00:53:22.120
on November 20, 1942. Work in the Committee must have convinced him that he had no future

558
00:53:22.120 --> 00:53:27.760
in Europe. The old continent was ravaged by war because it had been in the firm grip of

559
00:53:27.760 --> 00:53:33.660
statist illusions. Ex-patriots who were making plans for post-war Austria were entirely under

560
00:53:33.660 --> 00:53:40.340
the same spell. It is true that they despised National Socialism, but they did not despise

561
00:53:40.340 --> 00:53:46.420
Socialism per se, each of them had his own little scheme, and invariably all of these

562
00:53:46.420 --> 00:53:52.260
involved the state running the country. Many years later, he wrote in correspondence,

563
00:53:52.260 --> 00:53:59.060
As the Bourbons of the Restoration, many Austrians have learnt nothing and forgotten nothing.

564
00:53:59.060 --> 00:54:03.620
Among the few groups who showed any interest in his analysis of the necessity for, and

565
00:54:03.620 --> 00:54:09.020
the problems of, a post-war Eastern European Union, was the Socialist Central and Eastern

566
00:54:09.020 --> 00:54:14.780
and European Planning Board, an organisation that envisaged a post-war federation among

567
00:54:14.780 --> 00:54:22.220
Czechoslovakia, Greece, Poland and Yugoslavia. These must have been his feelings in 1942

568
00:54:22.220 --> 00:54:24.140
as well.

569
00:54:24.140 --> 00:54:28.780
New Friends The Honorarium for the Mexican Lectures supplemented

570
00:54:28.780 --> 00:54:35.500
their income, and things looked far rosier in 1942 than they had in their first year

571
00:54:35.500 --> 00:54:41.100
in the New Country. But the financial situation was still bleak, with no permanent source of income

572
00:54:41.100 --> 00:54:48.380
and Ludwig's retirement fund frozen in Austria. On December 18th, 1942, he reported on the

573
00:54:48.380 --> 00:54:54.220
activities of the year and applied for another extension of his research grant. He also tried

574
00:54:54.220 --> 00:55:00.380
to convince MBER to finance a large-scale research project to elucidate the origins of modern total

575
00:55:00.380 --> 00:55:07.180
and Italianism. He planned a comprehensive seminar with people like Roger, Lübcke, Hayek and others.

576
00:55:07.900 --> 00:55:14.620
The project did not materialise, but his research grant was extended in January 1943. Mises even

577
00:55:14.620 --> 00:55:20.140
received a two-year extension under the same conditions as before. It was a normal policy

578
00:55:20.140 --> 00:55:24.540
of the Rockefeller Foundation to subsidise the integration of European emigre scholars

579
00:55:24.540 --> 00:55:30.300
into American universities for about two years. Thus, Mises could be happy to obtain twice as

580
00:55:30.300 --> 00:55:37.140
as much support. However, it was to be the very end of their cooperation. The second

581
00:55:37.140 --> 00:55:42.820
year's bonus was a not-so-subtle goodbye. The Rockefeller Foundation's Willetts made

582
00:55:42.820 --> 00:55:48.540
it clear and MBER's Carson made it even more stark that this extension would be the

583
00:55:48.540 --> 00:55:54.540
last one. Meanwhile, Willetts was on very good personal terms with Wesley C. Mitchell.

584
00:55:54.540 --> 00:55:59.540
Fortunately for Mises, he had found a more amenable source of support independent of

585
00:55:59.540 --> 00:56:05.500
of the Rockefeller Foundation, the National Association of Manufacturers, NAM leadership

586
00:56:05.500 --> 00:56:12.580
opposed the New Deal and other statist projects. These men were determined to prepare a counterattack,

587
00:56:12.580 --> 00:56:16.260
starting a large-scale campaign to educate the American public about the benefits of

588
00:56:16.260 --> 00:56:21.780
what they called the free enterprise system. NAM needed intellectual leadership from people

589
00:56:21.780 --> 00:56:28.300
who were conversant both in the world of business and in the world of ideas. By February 1943

590
00:56:28.300 --> 00:56:33.100
They had discovered what they were looking for in the person of Ludwig von Mises. Many

591
00:56:33.100 --> 00:56:37.020
years in the Vienna Chamber of Commerce had accustomed him to dealing with businessmen

592
00:56:37.020 --> 00:56:42.980
and to communicating effectively his economic and political insights to this audience. Just

593
00:56:42.980 --> 00:56:47.020
when the Rockefeller Foundation made it clear that they were no longer interested in supporting

594
00:56:47.020 --> 00:56:53.400
the Austrian economist, NAM immediately stepped in and offered to hire Mises as a consultant

595
00:56:53.400 --> 00:57:00.040
starting today. Mises became a member of the Economic Policy Advisory Group. He later became

596
00:57:00.040 --> 00:57:05.720
a member of NAM's Economic Principles Commission and of its advisory group on international

597
00:57:05.720 --> 00:57:11.680
economic relations. The contract provided for an annual honorarium of $3,000, which

598
00:57:11.680 --> 00:57:19.320
was 20% more than what Mises earned at NBER. The contract was extended on an annual basis.

599
00:57:19.320 --> 00:57:27.480
In the 1944-1945 period, Mises's honorarium increased to $3,600. His taxable income increased

600
00:57:27.480 --> 00:57:36.800
to almost $6,100 in 1943 and almost $7,100 in 1944.

601
00:57:36.800 --> 00:57:43.040
Mises worked closely with NAM secretary Noel Sargent, who in 1943 commissioned a study

602
00:57:43.040 --> 00:57:48.600
from him on international monetary reconstruction after the Second World War. By the fall of

603
00:57:48.600 --> 00:57:53.600
Over the year, Mises had written a 68-page memorandum on the subject in which he advocated

604
00:57:53.600 --> 00:57:58.880
a return to the gold standard and criticised reconstruction plans that Harry Dexter White

605
00:57:58.880 --> 00:58:04.400
and Keynes had made in preparation for the 1944 Bretton Woods Conference. A few months

606
00:58:04.400 --> 00:58:11.080
later, he took part in an LAM-sponsored expert meeting to discuss the Keynes and White proposals.

607
00:58:11.080 --> 00:58:16.160
The group included Rufus Tucker from General Motors, Brentson Professor Edwin Kemmerer

608
00:58:16.160 --> 00:58:21.020
and Mises's old acquaintance Albert Hahn, who became a good friend during their years

609
00:58:21.020 --> 00:58:29.120
in Manhattan. By June 1944, Mises had prepared another memorandum, this time on monopoly.

610
00:58:29.120 --> 00:58:34.600
Probably this is the manuscript that was published posthumously as Monopoly Prices.

611
00:58:34.600 --> 00:58:39.760
A few months later he addressed two advisory committee luncheons on the West Coast. At

612
00:58:39.760 --> 00:58:44.320
that point he had already acquired a solid reputation through the publication of bureaucracy

613
00:58:44.320 --> 00:58:50.640
and Omnipotent Government in the Same Year by Yale University Press. Accordingly he was

614
00:58:50.640 --> 00:58:56.220
presented as the most eminent and uncompromising defender of English liberty and the system

615
00:58:56.220 --> 00:59:01.040
of free enterprise which has reached its highest development here in the United States. He

616
00:59:01.040 --> 00:59:07.560
addressed the local NAM chapters in San Francisco October 18th and Los Angeles October 25th

617
00:59:07.560 --> 00:59:14.300
and met such excellent men as Leonard Reed, Orville Watts and R.C. Hoyles. Reed had invited

618
00:59:14.300 --> 00:59:18.620
Mises for a lecture on behalf of the Los Angeles Chamber of Commerce. He had learned about

619
00:59:18.620 --> 00:59:23.340
Mises' NAM-related trip to the West Coast through their mutual friend Walter Zulsbach.

620
00:59:24.620 --> 00:59:30.060
The encounter with Leonard Reed was a fateful one. They may have met a few years earlier shortly

621
00:59:30.060 --> 00:59:35.340
after his arrival in the United States. Reed later recalled such a first meeting in 1940,

622
00:59:35.340 --> 00:59:40.540
at which she had been much impressed by the purity of Mises' opposition to any government

623
00:59:40.540 --> 00:59:45.220
and power beyond the minimum necessary for the preservation of domestic peace and the

624
00:59:45.220 --> 00:59:51.860
market. Mises had reportedly attended a party in Reed's home. Earliest extant correspondence

625
00:59:51.860 --> 00:59:57.040
started in June 1943, when Reed asked Mises whether he would be ready to give lectures

626
00:59:57.040 --> 01:00:03.140
in the framework of a business education campaign. Reed invited Mises for dinner to his house

627
01:00:03.140 --> 01:00:09.820
on October 19th or 20th, 1944. One of the other guests asked Professor Mises,

628
01:00:09.820 --> 01:00:28.820
All of us will agree with you that we are headed for troubled times, but Dr. Mises, let's assume that you were the dictator of these United States, and could impose any changes you think appropriate. What would you do? Reed clearly recalled the answer. Quick as a flash, Mises replied, I would abdicate.

629
01:00:28.820 --> 01:00:33.820
Mises had remained in touch with Reed through correspondence.

630
01:00:33.820 --> 01:00:39.580
He may also have been on Reed's mailing list and received one of the 1.5 million copies

631
01:00:39.580 --> 01:00:45.720
of Reed's four-page pamphlet, Why Not 1900, a reaction against FDR's proposed legislation

632
01:00:45.720 --> 01:00:51.780
to seize all annual salaries in excess of $25,000. Reed had argued that there was no

633
01:00:51.780 --> 01:00:57.060
objective reason not to seize all salary in excess of the national average salary, which

634
01:00:57.060 --> 01:01:03.440
happened to be $1900. Reed was a self-made businessman who had spent the greater part

635
01:01:03.440 --> 01:01:23.200
Reed organized a sort of pilgrimage for 700 Californians to Washington, D.C., and caught

636
01:01:23.200 --> 01:01:28.600
the eye of Herbert Hoover's entourage. His career was made. He moved on to even higher

637
01:01:28.600 --> 01:01:54.360
Once in his new position in Los Angeles, he hired

638
01:01:54.360 --> 01:01:59.160
Richard V. Orville Watts, a professor of economics who had been a popular instructor at the Western

639
01:01:59.160 --> 01:02:05.480
School. Watts was a disciple of Harvard professor Thomas N. Carver, who had lectured for Reed's

640
01:02:05.480 --> 01:02:10.760
Western School for commercial organisation secretaries in the 1930s. Watts took over

641
01:02:10.760 --> 01:02:16.220
from Carver when Carver's Honorarium became unaffordable for Reed. Watts thus became the

642
01:02:16.220 --> 01:02:21.600
first economist ever hired by a US Chamber of Commerce on a full-time basis. Together,

643
01:02:21.600 --> 01:02:26.600
They fought the New Deal rather effectively, organising many courses and other educational

644
01:02:26.600 --> 01:02:31.780
conferences throughout California. Mises's lectures were part of this effort. On the

645
01:02:31.780 --> 01:02:37.760
evening of Tuesday, October 17th, one day before his NAM luncheon talk, Mises gave a

646
01:02:37.760 --> 01:02:44.120
lecture to the Rotary Club on credit expansion and depression, and that same evening addressed

647
01:02:44.120 --> 01:02:49.060
an audience at the Santa Ana High School on the causes of the war. Mises stayed as a

648
01:02:49.060 --> 01:02:53.560
and a guest at the home of R.C. Hoyles, who published the predecessor of the present-day

649
01:02:53.560 --> 01:02:58.820
Orange County Register. Several weeks before the talks, the Los Angeles

650
01:02:58.820 --> 01:03:03.260
Chamber of Commerce and the Register started promoting the event through articles and columns

651
01:03:03.260 --> 01:03:08.380
and it turned out to be a success. Reed in particular was much impressed by what he had

652
01:03:08.380 --> 01:03:13.780
seen and heard. A year later he would move to New York and eventually establish the mother

653
01:03:13.780 --> 01:03:19.380
of all libertarian think tanks in collaboration with Mises. The association would last for

654
01:03:19.380 --> 01:03:25.580
the rest of Mises' lifetime. The alliance with NAM, in contrast, did not last long. Mises

655
01:03:25.580 --> 01:03:30.900
continued to advise NAM, co-authoring a two-volume study on the American individual enterprise

656
01:03:30.900 --> 01:03:37.820
system which was published on April 1, 1946. The book was part of a large-scale NAM campaign

657
01:03:37.820 --> 01:03:42.980
aiming at the abolition of the wartime Office of Price Administration.

658
01:03:42.980 --> 01:03:48.860
The campaign succeeded and the office expired, but so did Mises' contract.

659
01:03:48.860 --> 01:03:54.540
He continued to serve on NAM's advisory group on international economic relations, but resigned

660
01:03:54.540 --> 01:04:01.300
at the end of 1948, when NAM became increasingly agnostic on the question of inflation and

661
01:04:01.300 --> 01:04:02.940
its consequences.

662
01:04:02.940 --> 01:04:09.220
The final straw for Mises was, when NAM started championing the view that increased productivity

663
01:04:09.220 --> 01:04:14.420
was the proper antidote to inflation. Many years later he got another contract on the

664
01:04:14.420 --> 01:04:23.540
NAM staff, starting January 1954 for $6,000 per annum plus $2,400 expenses. At about

665
01:04:23.540 --> 01:04:28.900
the same time he began his work for NAM, Montes de Oca wrote from Mexico City that he had

666
01:04:28.900 --> 01:04:34.540
made good progress in the preparation of the International Institute of the Social Sciences.

667
01:04:34.540 --> 01:04:40.180
He now asked Mises to submit a list of prospective permanent professors, and some indication

668
01:04:40.180 --> 01:04:46.220
of the salaries they would require. Mises replied that Walter Salzbach, Alfred Schütz,

669
01:04:46.220 --> 01:04:51.700
Louis Roger, Jacques Ruff, and he himself, all European expatriates living in New York

670
01:04:51.700 --> 01:04:57.340
without American citizenship, would be available for permanent employment in Mexico City for

671
01:04:57.340 --> 01:05:03.340
for an annual compensation of some $6,000 per head. This was a fairly generous salary

672
01:05:03.340 --> 01:05:08.500
and proved to be a major stumbling block for the establishment of the Institute. But in

673
01:05:08.500 --> 01:05:13.900
early 1943 everything seemed possible. A group of first-rate intellectuals with classical

674
01:05:13.900 --> 01:05:19.180
liberal pedigree was at least potentially available, and another group of men was interested

675
01:05:19.180 --> 01:05:24.900
in financing the venture. Moreover, there was a plan. Louis Rouget would be invited to the

676
01:05:24.900 --> 01:05:29.300
The University of Mexico City for a series of lectures. Mises was to prepare a study

677
01:05:29.300 --> 01:05:34.240
on Mexican political-economic conditions, which Montes de Oca had commissioned for his

678
01:05:34.240 --> 01:05:40.980
Banco Internacional, and Montes de Oca continued to work on a translation of socialism. In

679
01:05:40.980 --> 01:05:45.480
planning for the future teaching staff of an institute in Mexico City, Mises had also

680
01:05:45.480 --> 01:05:52.040
brought up the names of Plant, Machloub, Rapa, Röpke and Robbins. It is not clear whether

681
01:05:52.040 --> 01:06:05.080
Mises had drafted a longer list of prospective staff, permanent and temporary, and also

682
01:06:05.080 --> 01:06:10.440
a short list of the subjects to be taught. The staff included Machloub, Habeler, Nurske,

683
01:06:10.440 --> 01:06:15.520
Sulzbach, Vögerin, Pater, Schutz, Roger, Kelsen, Houla, Rüff, Baudin, Hayek, Robbins,

684
01:06:15.520 --> 01:06:20.960
Blant, Hood, Wiese, Ainaudi, Rappard, Striegel, Heckscher and Bulquin. The main subjects to

685
01:06:20.960 --> 01:06:25.720
to be taught were 1. economics, 2. history and critical analysis of socio-economic doctrines

686
01:06:25.720 --> 01:06:32.520
in the last 200 years, 3. constitutional history since 1776, 4. economy and social history

687
01:06:32.520 --> 01:06:39.160
since 1750, and 5. modern public finance. He also made one last attempt to win Lionel

688
01:06:39.160 --> 01:06:45.840
Robbins over. In early 1943, he invited Robbins to come to New York. Robbins combined his

689
01:06:45.840 --> 01:06:50.880
scientific authority and personal network with great organisational skills and an unusual

690
01:06:50.880 --> 01:07:00.540
The fate of Britain and thus of Europe depended on where he weighed in. Mises sought to get

691
01:07:00.540 --> 01:07:05.740
him out of his Cambridge and London milieu, to breathe the fresh air of liberty, but Robbins

692
01:07:05.740 --> 01:07:10.060
never came to New York. Instead, he became a champion of the British interventionist

693
01:07:10.060 --> 01:07:17.880
government. There is no surviving correspondence between December 1935 and early January 1943,

694
01:07:17.880 --> 01:07:22.340
And then it was Robinson's wife, Iris, who wrote, thanking for a Christmas parcel with

695
01:07:22.340 --> 01:07:28.200
sweets, chocolate, lemon juice and more, that the Miseses had sent. Two days later, her

696
01:07:28.200 --> 01:07:35.600
daughter Anne wrote too, and on January 25th, Lionel himself also renewed their correspondence.

697
01:07:35.600 --> 01:07:40.220
Mises eventually delivered the study on Mexican economic conditions to his Mexican friend

698
01:07:40.220 --> 01:07:45.460
when the latter came to New York in December 1944. Montes de Oca was now eager to have

699
01:07:45.460 --> 01:07:50.040
have an epilogue for the forthcoming Spanish edition of socialism. He had still not given

700
01:07:50.040 --> 01:07:54.660
up on the Institute of Social Sciences, although another problem besides the salary question

701
01:07:54.660 --> 01:07:59.860
had so far prevented any progress. Most of the prospective permanent and temporary teaching

702
01:07:59.860 --> 01:08:05.680
staff, Robin Plant, Machloub Zultbach and others, were by then employed in war offices

703
01:08:05.680 --> 01:08:10.280
of the French, British and US governments and were either unable or unwilling to leave

704
01:08:10.280 --> 01:08:15.960
until the war was over. Montes de Oca invited Mises to return to Mexico City as a visiting

705
01:08:15.960 --> 01:08:21.560
professor during the year, but Mises declined because he planned to apply for US citizenship

706
01:08:21.560 --> 01:08:27.240
in August, five years after his arrival, and sought to avoid any complications that might

707
01:08:27.240 --> 01:08:33.120
result from a trip abroad. Mises's social integration into the cosmopolitan milieu of

708
01:08:33.120 --> 01:08:39.200
New York accompanied a more general integration into American society. One sign of adjustment

709
01:08:39.200 --> 01:08:44.840
was the change of Mises' manners, which became less formal in his dealings with friends.

710
01:08:44.840 --> 01:08:49.840
During 1942, when he wrote a series of editorials for the New York Times and other journals,

711
01:08:49.840 --> 01:08:55.180
Henry Hazlitt felt comfortable enough addressing his Austrian friend to leave behind the differential

712
01:08:55.180 --> 01:09:02.960
Professor Mises in favour of Dear Ludwig, July 1942 and later Dear Lou, December 1942.

713
01:09:02.960 --> 01:09:08.800
In April 1945, he made another important and lasting acquaintance when he started correspondence

714
01:09:08.800 --> 01:09:15.680
with Philip Courtney, at the time the Vice-Chairman and Treasurer of Cotille, the perfume company.

715
01:09:15.680 --> 01:09:20.080
Mises wrote to congratulate Courtney on a paper in which he had criticised Keynesianism.

716
01:09:20.080 --> 01:09:24.920
Courtney, who already knew Mises's work, wrote back, saying there was no person in

717
01:09:24.920 --> 01:09:29.480
the world whose opinion I value more than yours, and that he hoped to meet him soon

718
01:09:29.480 --> 01:09:33.360
at dinner with their mutual friend André Morrois.

719
01:09:33.360 --> 01:09:37.920
Mises had met Morrois at Louis Rouge's apartment in New York City.

720
01:09:37.920 --> 01:09:44.840
The dinner at Morwas' apartment probably took place on May 21st or 22nd, 1945.

721
01:09:44.840 --> 01:09:49.520
On a professional level, however, Mises' integration proceeded more slowly. The essential

722
01:09:49.520 --> 01:09:55.040
reason was his unwillingness to trade away his convictions for social acceptance. By

723
01:09:55.040 --> 01:10:00.240
1944 he was a member of the New York Overseas Rotary Fellowship, which meant nothing to

724
01:10:00.240 --> 01:10:05.320
him. He found the meetings extremely boring and, after a short while, stopped attending

725
01:10:05.320 --> 01:10:10.520
He also had some access to the national press, through Hazlitt at the Times, but quickly

726
01:10:10.520 --> 01:10:15.440
ran into confrontations. A case in point is a letter to the editor of the New York Times

727
01:10:15.440 --> 01:10:22.920
published on January 3, 1943. Here Mises explained that mere organisational devices would not

728
01:10:22.920 --> 01:10:28.920
make for world peace after the war. In particular, he rejected the idea that some new version

729
01:10:28.920 --> 01:10:32.960
of the League of Nations would make international relations better than they had been in the

730
01:10:32.960 --> 01:10:38.560
in the interwar period, only a radical change in political mentalities and social and economic

731
01:10:38.560 --> 01:10:45.060
ideologies toward the classical liberal position could make the world safe for peace and prosperity.

732
01:10:45.060 --> 01:10:49.400
The letter provoked the editor of Barons to solicit similar pieces from Mises, but this

733
01:10:49.400 --> 01:10:55.160
cooperation was not fated to last very long. Mises contributed only one article on big

734
01:10:55.160 --> 01:11:01.480
business and a common man, which was published in February 1944, and only after sharp protestations

735
01:11:01.480 --> 01:11:04.440
from some associate of barons.

736
01:11:04.440 --> 01:11:09.520
The essential point under contention was whether or not Mises had exaggerated in claiming that

737
01:11:09.520 --> 01:11:12.320
the inventive spirit was absent in Russia.

738
01:11:12.320 --> 01:11:13.320
Mises wrote,

739
01:11:13.320 --> 01:11:18.700
As far as I know, the best that the Russians have achieved was imitating foreign models.

740
01:11:18.700 --> 01:11:22.440
The major attraction of their exhibitions at the world's fairs in Paris and in New

741
01:11:22.440 --> 01:11:27.920
York were imitations of American agricultural implements and of Ford cars and tractors.

742
01:11:27.920 --> 01:11:30.560
Their planes and tanks were not original.

743
01:11:30.560 --> 01:11:54.600
The German General Staff mistrusted the airplane and the tank and tippets. Before the First

744
01:11:54.600 --> 01:12:00.280
War, belittled the U-boat. The zeppelin is a genuine German invention, but it is both

745
01:12:00.280 --> 01:12:06.520
commercially and militarily impracticable. The cooperation with barons ended soon after.

746
01:12:06.520 --> 01:12:12.080
Similarly, Mises's integration into professional organizations of American economists suffered

747
01:12:12.080 --> 01:12:19.420
a setback. Just when Fritz Machlup joined the AER editorial board in October 1943, Mises

748
01:12:19.420 --> 01:12:25.060
Mises felt he had to stop further cooperation with the journal. What had happened? He reviewed

749
01:12:25.060 --> 01:12:30.740
books for various journals, focusing on works dealing with post-war reconstruction in Europe.

750
01:12:30.740 --> 01:12:36.020
Two of these were invited reviews for the American Economic Review and the AER had published

751
01:12:36.020 --> 01:12:41.640
a rejoinder by a certain Alfred Brauntal to the first of the two reviews without giving

752
01:12:41.640 --> 01:12:48.620
Mises the opportunity to respond. To Mises this was a clear sign of discrimination. Writing

753
01:12:48.620 --> 01:12:52.960
According to Makhluk Mises said that he was no longer prepared to contribute to a periodical

754
01:12:52.960 --> 01:12:58.900
whose editors failed to comply with the principles of literary decency for partisan consideration.

755
01:12:58.900 --> 01:13:03.740
They should rather send their books directly to a Mr. Brantall or other comrades.

756
01:13:03.740 --> 01:13:08.380
Five years later he wrote in similar fashion to the Dean of the School of Business Administration

757
01:13:08.380 --> 01:13:13.420
of the University of Buffalo, referring to your letter of May 11th, I am sorry to inform

758
01:13:13.420 --> 01:13:18.300
you that I have no suggestions to offer for the program of Econometric Society.

759
01:13:18.300 --> 01:13:25.440
American Citizen Mises had applied for citizenship at the earliest

760
01:13:25.440 --> 01:13:33.920
possible date, August 1945, and on January 14th, 1946, he became an American citizen.

761
01:13:33.920 --> 01:13:38.680
He renounced his title of hereditary Austrian nobility, but kept the name Ludwig von Mises

762
01:13:38.680 --> 01:13:43.800
as a Nordenblum. One of the first things he did was to get in touch with his old employer

763
01:13:43.800 --> 01:13:48.460
to reclaim the retirement funds that he rightfully owned, but which had been denied to him in

764
01:13:48.460 --> 01:13:54.440
an August 1938 letter from a Nazi official. He was told he was entitled to a monthly payment

765
01:13:54.440 --> 01:14:02.760
of 953.95 shillings starting May 1st, 1945. The money was transferred to his old bank

766
01:14:02.760 --> 01:14:07.640
account in Vienna. Foreign exchange controls were still in place, however, and Mises could

767
01:14:07.640 --> 01:14:11.880
not transfer the money to an American account unless he provided an authorization from the

768
01:14:11.880 --> 01:14:19.080
National Bank. Did he ever think about returning to Vienna? He did not. Mises was still in touch

769
01:14:19.080 --> 01:14:25.000
with some pre-war acquaintances, for example with Carl Brockhausen and historian and writer Richard

770
01:14:25.000 --> 01:14:32.520
Scharmanz. He had Idaho publisher J. H. Gibson send them care packages. Gibson owned Caxton Printers

771
01:14:32.520 --> 01:14:38.840
Ltd. in Caldwell, Idaho. His brother was the noted American colonial historian Lawrence Henry Gibson.

772
01:14:38.840 --> 01:14:44.680
He made his money as a commercial printer and with an office supply company. The profits

773
01:14:44.680 --> 01:14:50.280
he invested in his hobby, publishing literature he personally liked, such as libertarian conservative

774
01:14:50.280 --> 01:14:57.440
books, for example Albert J. Knox, Our Enemy, The State, 1935, Karol Karatz, The Revolution

775
01:14:57.440 --> 01:15:04.640
Wars, 1938, and Erich von Kühnert, Ledin's Liberty or Equality, 1952. Mises first met

776
01:15:04.640 --> 01:15:10.280
At him in January 1947, Gibson spontaneously offered help for those Mises thought deserved

777
01:15:10.280 --> 01:15:16.880
support in the hard post-war years. Mises named three Austrians, Bockhausen, Schammerz,

778
01:15:16.880 --> 01:15:22.160
and Friedrich Köhler, his long-time attorney in Vienna, and three Germans, Passau, Eugen

779
01:15:22.160 --> 01:15:27.800
Fink, a professor of philosophy in Freiburg and former assistant to Edmund Husserl, and

780
01:15:27.800 --> 01:15:32.640
Carl Hagedorn, an attorney in Hamburg and friend of Margit's family.

781
01:15:32.640 --> 01:15:38.420
The next year Gibson repeated his offer, and did so once more in the spring of 1953. Mises

782
01:15:38.420 --> 01:15:43.080
then brought Gibson in touch with Erich von Kuhnelt-Ledin, who became another author of

783
01:15:43.080 --> 01:15:50.140
Caxton Printers. In a letter dated October 25, 1952, he enthusiastically endorsed Kuhnelt-Ledin's

784
01:15:50.140 --> 01:15:55.920
Liberty or Equality as well as three of Garrett's books. He also took care of the surviving mother

785
01:15:55.920 --> 01:16:01.160
of Ludwig Betelheim-Gabilon, who had died at the hands of the Nazis. Still, Mises did

786
01:16:01.160 --> 01:16:06.600
had not used the opportunity to visit Germany or Austria. Both countries were still occupation

787
01:16:06.600 --> 01:16:12.400
zones and access required special permits. From correspondence with Schamatz, he knew

788
01:16:12.400 --> 01:16:17.600
that Vienna was in even worse shape than after the First World War, and this time lacked

789
01:16:17.600 --> 01:16:22.960
the leadership to prevent the rampant socialisation of the entire country. As Schamatz wrote,

790
01:16:22.960 --> 01:16:28.040
many Austrians had been looking forward to Allied victory from which they expected liberation

791
01:16:28.040 --> 01:16:55.700
But Mises's disinclination to visit Vienna also had another source, as he wrote to his

792
01:16:55.700 --> 01:16:59.820
My first friend Carl Brockhausen, a former professor of constitutional and administrative

793
01:16:59.820 --> 01:17:04.660
law at the University of Vienna, I do not yearn for an encounter with a mob who applauded

794
01:17:04.660 --> 01:17:10.780
the massacre of excellent men. Ich sehne mich nicht danach, dem Pöbel zu begegnen,

795
01:17:10.780 --> 01:17:16.660
der bei den Niedermetzeln ausgezeichneter Männerbeifall geklatscht hat.

796
01:17:16.660 --> 01:17:20.780
Brockhausen brought this issue up in later letters, too, asking Mises where he had received

797
01:17:20.780 --> 01:17:27.700
In a letter dated July 4, 1949, Brockhausen, more than 90 years old, said he was about

798
01:17:27.700 --> 01:17:33.260
to look into the accounts of Nazi war crimes. It is not quite clear who Mises had in mind.

799
01:17:33.260 --> 01:17:38.240
The good-hearted Brockhausen tried to convince Mises that this severe judgment was not borne

800
01:17:38.240 --> 01:17:44.180
out by the fact. There had been no lynch marks in Vienna. In early March, 1940, Mises had

801
01:17:44.180 --> 01:17:49.260
declared his readiness to contribute to the reconstruction of our devastated, fevistatis

802
01:17:49.260 --> 01:17:54.860
Mises, Austria. Clearly the early use of such vocabulary made it difficult to keep pace with

803
01:17:54.860 --> 01:18:00.460
the subsequent devastation. But by mob, Mises probably meant men such as Hans Mayer, Ottmar

804
01:18:00.460 --> 01:18:06.160
Spann, Sprick and Nadler, who had actively supported the Nazi takeover of Austria and

805
01:18:06.160 --> 01:18:11.320
yet were once again in positions of influence. Mises did eventually make his way back to

806
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Vienna, but only to visit.