Part 6. Mises in America
Chapter 18. Emigre in New York. Mises knew that it would be hard for him to find a suitable
position in the United States. Fortunately, he had no idea just how hard. He was thoroughly
out of step with positivism, or as he called it pan-physicalism, which had begun to shape
the development of American economics during the past two decades, and which at the very
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.
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.
A few years later, one correspondent summed up the situation. Dickens, Carlisle, Coleridge,
Charles Kingsley, Charlotte Bronte, Byron Hood, the son of the shirt, Elizabeth Barrett Browning,
and a host of others are still remembered and read today by millions, while the works of Adam Smith,
Malthus, Riccardo, McCulloch, and Mill lie undusted except by scholars.
The contemporary American intellectual world was deeply anti-capitalistic. How could a man like
Arrival in New York On August 3, 1940 the ship docked in New York
City. Mises had not been there since 1931 when he had attended a conference of the International
Chamber of Commerce in the midst of the Great Depression. In that year he had come as a
distinguished representative. Now he arrived almost empty-handed. Fifty-eight years old
He had to start his life anew. The worst year of his life lay ahead. Friedrich Unger had
booked him a room, and Alfred Schütz was waiting for Ludwig and Margit at the dock.
Their happiness upon seeing him was short-lived. Schütz had the unpleasant task of delivering
a letter from Robert Calkins, the Dean of UC Berkeley, who told Mises that the school
had no budget to hire him. They could raise some money in the form of a stipend, but this
Mises would be modest, and Kalkins would therefore understand if Mises chose to accept a more
attractive position elsewhere. A few days later, Howard Ellis wrote from Berkeley, thanking
Mises for sending a copy of Nationale Economie and wishing him good luck. And that was it
for Berkeley.
Mark Loup wrote from California, where he had met Dean Kalkins, and recommended that
Mises get in touch with the Rockefeller Foundation regarding a position at UCLA. In many other
In other cases, the Foundation had facilitated the transition of emigre scholars by co-sponsoring
chairs for them. This, Machlou believed, should be no problem in the present case. Mises thus
spoke to his friends at the Foundation, and they gave him the green light by August 15th.
All hope was now on Machlou to work something out, but to Mises' great disappointment the
attempt failed. What should they do now? Ludwig and Margit decided to stay in New York for
For the time being, where many of their European friends and acquaintances had also found refuge
under similar conditions, they had already found suitable accommodation in a hotel. The
next step was incomparably more difficult, finding new sources of income. Without the
job at Berkeley, and with much of his assets frozen in Europe, Mises could count the days
until his money would run out. He hoped to find academic employment in New York or elsewhere,
But there was not much of a job market for economists. A few years later the GI Bill
would create a panoply of new positions for professors in colleges and universities, but
in 1940 there were only a few full-time positions available. It is true that the Federal Government
had started hiring economists for New Deal agencies such as the National Resources Planning
Board, and after the United States entered the Second World War in December 1941, Federal
Social employment became a boon for economists. Roosevelt signed the G.I. Bill in 1944. The
bill provided funds to send returning soldiers to colleges and universities, thus keeping
them off the labour market. It cost the American taxpayer some $14 billion between 1944 and
1956. In 2003, the Federal Government employed more than 3,000 economists, or about 15% of
Peter Klein has argued that, due to these circumstances, the Second World War radically
changed the outlook of American economics profession, which turned statist.
But Mises had already been found unsuitable for government employment in the First World
War in his native Austria, at a time when he was far less infamous as an opponent of
interventionism. Imagine Mises in the US Office of Price Administration working under the
Many European expatriates, among them many former Mises students and associates, such
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.
To get into the private market for economists would take time, however, and time he did
not have. It is true he enjoyed an excellent international reputation as a theoretician,
but he lacked demonstrated experience in the American economy, and he was about to turn
fifty-nine.
I've already passed the age limit, wrote Mises in a letter to Mahlup dated August 7, 1940.
This alone cannot have been a decisive obstacle. Richard Schiller, some ten years older than
Mises, found a position at the New School for Social Research. Margit called on Machloub
for help, stating that her husband was deeply depressed. He is able to serve and fight for
an idea, but not for his personal destiny. Nevertheless, he had to find the job. He used
his old contacts to arrange talks at various organisations in New York. On November 7th,
For example, he addressed the banking seminar of Columbia University's School of Business
on the problem of post-war reconstruction of Europe. Published in Trusts and Estates January
1941, the publishers of Trusts and Estates distributed some 3000 copies over and above
our usual circulation to leading educators and economists as well as institutional investors.
Two weeks later he gave a presentation on his contributions to economic theory before
the New York University Department of Economics. He lectured at Princeton University on December
The 19th and, at the turn of the year, attended a meeting of the American Economic Association
in New Orleans. The NYU address was eventually published as
My Contributions to Economic Theory, Planning for Freedom and Sixteen Other Essays and Addresses.
The Princeton invitation came from Morgenstern. In New Orleans, Mises met Erwin Fischer and
his German assistant, Hans Corson. And on February 11, 1941, he gave a talk to the exclusive
Accountants Club of America in a parochay suite of Manhattan's Waldorf Astoria Hotel.
The invitation came from John T. Madden, the Dean of NYU's School of Commerce, who also
told him that for the first time ever the club had consented to pay a honorarium, $50.
The subject of the talk was post-war economic conditions in Europe. The club did not seem
to be under the spell of academic economists, for it advertised for the talk by pointing
Mises, although one of the leading economists of the world, is noted for his practical viewpoint
and his ability to express himself in terms intelligible to the layman.
Mises produced the usual result in his audience.
One participant recalled that it was the clearest, soberest, and most thought-provoking analysis
that I have heard, and arranged a follow-up meeting with Mises to continue the discussion.
His other presentations produced similar results.
The vigorous intellectual from Vienna impressed his audiences, but none of these appearances
led to anything resembling a contract. The situation was desperate. However, one good
side-effect of these activities was to make him better known among like-minded intellectuals
and businessmen. Of course, Mises also sought direct contact with ideological allies and
potential allies. The most important case in point was Henry Hazlitt, 1894-1993, who
The two a few years before had written a very favourable book review of socialism, stating
that Mises had written an economic classic in our time. Hazlitt later recalled how they
met in New York.
Sometime in 1940 I got a telephone call. The voice on the other end said, This is Mises
speaking. As I've told many of my friends since, it was as if someone had called and
said, This is John Stuart Mills speaking. I hadn't referred to Mises as a classic,
And you don't expect a classic to call you on the telephone.
Anyway, that led to our acquaintance. It was August, 1940. Hazlitt had a weekly column
in the Times, and a few months later he brought Mises on board. Hazlitt might well have been
Mises' first close American friend. Benjamin Anderson had moved to Berkeley, and Zilligman
had died in 1939. During the first years in the New World, Mises in his social life could
rely largely on friends and acquaintances from the Old World. Manhattan had become the nexus
of European opposition elites trying to survive the war years on the American side of the Atlantic.
Politicians, academics, artists, entrepreneurs and bankers whose lives were not secure on the
Nanaji regime had chosen New York as their safe harbour. Marianne Hertzfeld, who spent the war
years in London, asked Mises to extend her greetings to all her friends in New York and said,
There are, I think, about a hundred people there whom I would like to see.
Naturally, most of these people had a bourgeois or upper-class background, and many were Jews.
Ludwig and Margit were certainly amazed when they discovered how many friends, colleagues,
students, and even relatives had found their way to Manhattan.
The Ungers, the Geiringers, the Schulers, the Kynes, the Kaliers, the Fürths, the Schützes,
the Hoolers, Erich Vöglin, Felix Kaufmann, Immanuel Winter, Immanuel Winter-Nitz, Robert
But Mises, Engel Janosy and many others, in fact Mises could have resumed his old private
seminar, all of its members were in New York City, even his Vienna family doctor was there.
Many other people, among them his closest friends from Vienna, had not made it. During
the coming months and years, news of their terrible fates made it to New York. Emil Peels
and his wife died in the German concentration camp. Their last sign of life was a letter
Mr. Peerls wrote in 1943 to his sister Frieda Becher von Rüdenorf, chosen the Peerls and
Mises had often skied together in the Austrian Alps. In July 1946 Mises wrote to Otto Friedländer
that the terrible fate of Peerls had deeply shaken him.
Ludwig Bethelheim-Gabilon was first separated from his family and forced to reside in a
mass residence in Vienna. He was later deported and never seen again. Newspaperman Richard
Schamatz met Bethelheim on the eve of his deportation. Schamatz survived the war in
Vienna because he was married to an Aryan wife, but they lost all their material belongings.
Victor Gretz had died after the Anschluss, and only his wife, Emmy, had managed to emigrate
to the States. Ewald Pribham and his wife had committed suicide when they could not
leave Belgium. Ewald's brother, Carl, had made it to Washington, where he continued
his career in international organisations. There was still no news from Margit's daughter,
Mises established contact with Austrian political expatriates.
After about a year in exile, he became more formally involved in the work of various Austrian
exile organisations, which mushroomed after the United States entered the war in December
1941. From the beginning, Mises was often asked for help, by friends, acquaintances
and often people who only knew him indirectly. In many cases they were former students or
employees who had no records from Europe. He patiently wrote letters of recommendation
and certificates of class attendance and in some cases this was instrumental in providing
them with a job. For example Henri Bund, Otto Ehrlich, Bert Hoselitz, Karl Krupp, Leon Kruppe,
of Leuble, Edmund Silberner, Luise Sommer, Walter Zultbach. He also tirelessly wrote
letters of support and made other efforts to help those who had not yet made it to the
safe haven of America, for example in the cases of legal historian Hermann von Grimeisen
and of Paul Manteau and his family. The letters that Machloop and a few others wrote for Mises
did not bring the desired result. He must have started to envy Hayek, who wrote from
In the same letter Hayek confidentially announced his plan to leave the country at some later
at one time he lamented the risk of destruction of his books through firebombs. These risks
were not inconsiderable in an empty house with nobody on the spot to put out a firebomb,
which, if one gets there promptly, is the easiest thing in the world. Mises, too, would
have had the nerves to live under occasional bombings, but he could not live indefinitely
He had some money in the United Kingdom, revenue from the sale of his books, which could keep
him going for some more weeks or months. Hayek managed his bank account in England, but wartime
foreign exchange controls made it impossible to transfer the sums out of Britain, and it
was only a matter of time until it would become impossible to withdraw anything from the account.
It was, however, possible to export commodities, and thus Hayek entered the book merchant business
He withdrew the money from Mises' account and started buying precious books, among them
a first edition of The Wealth of Nations and two sets of the complete works of Jeremy Bentham,
which he then forwarded to Mises through Habla in Harvard. This would certainly not have been
efficient in normal times, but under the circumstances it was the only way to get any money out of
the country. They used this device at least until 1948, because the United Kingdom maintained
and a regime of foreign exchange controls even in the post-war period.
National Bureau of Economic Research The New School for Social Research had absorbed
many social scientists from Central Europe and even some of Mises' associates, such
as Richard Schiller. Mises never received an offer. Hayek received one in August 1940,
but declined out of loyalty to his colleagues at LSE. Eventually it would once again
can be the Rockefeller Foundation that would fund Mises. Joseph H. Willits, who at the
time headed the Foundation's social sciences division, signed a $2,500 grant to the National
Bureau of Economic Research to put Mises on its payroll for one year, starting December
15, 1940. The stipend was less than a third of his salary in Geneva, but given the circumstances,
Mises would have been satisfied to find anything at all. Barzun observes in those years that
Professional salaries in American universities reached the not very dizzy height of nine
or ten thousand dollars a year, and then added the following remark, the lower depth of the
profession's earning power are painful to think of and undercut any irony. For instance,
in 1940 there were 433 junior colleges whose salary scale ranged on average from 1,572
Mises' contacts with other NBER economists seem to have been ephemeral. He ran a seminar
at MBER's hillside offices but found it uninspiring. To Hayek he wrote,
My seminar is going on. Last week M and L took part. I think that their impression was
that it is still far below the Sturban Ring standard, but everything takes time. It turned
out, however, that he did not have the time to build up a group of permanent participants
as in Vienna. All of the attending students were quickly absorbed in government jobs.
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.
His manuscripts were translated into English. The NBER officer responsible for handling
publication matters, a certain Martha Anderson, also tried to find a translator for one of
his book manuscripts, probably the original German manuscript of what was later published
as Omnipotent Government. In November 1941, Anderson proposed Max Eastman for the job.
Eastman was a New York journalist who had already translated Das Kapital. Mises replied
The money from the Rockefeller Foundation was not enough to live on, and in 1941 it
was almost all the income they had. He had never known such destitution. His family had
not been wealthy, but they had always been comfortable, had always had help in the household,
But now they could barely pay for a restaurant or for tickets to the theatre or opera, markets
started training as a secretary. Even more depressing was the ideological state of affairs
in the very countries that were at present the bulwark against international communism
and national socialism. Things had deteriorated considerably since its last trip to the States
in 1931 when progressive interventionism was already at a previous high point. In the years
As if Roosevelt knew to you, the political gospel preached from the press and the pulpits
had shifted yet further to the left. The Soviet Union was now held in high regard, and Communistic
schemes were discussed seriously, while the free market was derided as an atavism of an
unenlightened past. It was only a matter of time before the United Kingdom and the United
States would become fascist or communist or some variant thereof. Was this a future worth
dying for. Without hope for the future, was it worth living in the present? Where were
the voices of dissent, except for a scattered few, like Henry Hazlitt and Lawrence Furtick?
Where were the economists with enough backbone to resist the Keynesian temptation, the very
embodiment of statist longings? How long could his disciples hold out, insecure as
they were, in their status as emigres? It was at this point that Hayek, to whom he must
have confided his desperation, reassured him that he need have no fear about my becoming
converted to Keynesianism. Though for Hayek, too, the future looked bleak. I agree entirely
with what you say about the horrible state of economic thinking here and in the USA,
that at the present time, when one can at least have some hope for the immediate future,
the long-run outlook should be so dark as really dreadful. He went on, I'm trying hard
I want to show to people how this present trend leads inevitably to economic decay and
fascism and I shall follow up my pamphlet with a more popular booklet, probably in one
of the Sixpenny series, on which I am now working apart from the larger book which is
slowly progressing. Three months later Hayek reported to the publication of his first article
on the influence of scientism on social thought. Mises did not believe he could contribute
to turning the tide. His career was in a deep slump. He was completely at odds with the
the prevailing scientific fashions in the United States, and he saw no way to have any
impact on public opinion. Ironically, one factor that barred him from reaching an audience
through his writings was that US publishers strictly aimed at the mainstream. The greatest
champion of capitalism could not make himself heard because in a world dominated by the
statist ideology, his books did not seem profitable enough to enjoy the support of
of Commercial Publishers," he wrote to Hayek.
I've been very busy these last months in writing my posthumous works.
I do not believe that it will be possible for me to publish anything other than small
articles and periodicals.
To Machloupp, he wrote, I do not know why I am working, but I've been very productive.
Mises reached an absolute low point in April 1941.
Margit had been ill since early March of flu and sinus troubles to the point that she could
Mises, usually extremely discreet about his emotions, lamented in a letter to Hayek, Margit
is not yet totally recovered. The thing seems interminable. It was also quite impossible
to cheer her up, because she was still anxious about the fate of her daughter. Thus he was
left alone with his sorrows and apprehensions. He had left Switzerland because he refused
to depend entirely on the goodwill of one party, the Swiss Government. But in the United
States he fared no better. All his money came from the Rockefeller Foundation, which made
it clear to Mises what his status was now. While left-wing lunatics and the cranks of
the imaginary science of quantitative economics received lucrative contracts with the new
School of Social Research, Mises had to live on the equivalent of a post-doctoral stipend,
And he was made to understand that even this amount was not meant as a compensation for
his service to economic science, but as something between a pension and charity for an old man
who could not get along otherwise. Mises was not a man to attach too much importance to
material things. He once told Margit that, if she was after riches, she had married the
wrong man. But neither was he the type of intellectual that Ayn Rand depicted in her
The libertarian philosopher who in dire straits would descend stoically from his chair at
the university to work behind the counter of a small town burger joint. Had Mises ended
up flipping hamburgers, his heart would have broken. And what would have happened to economics,
the Austrian School and human liberty if Mises had had to give up intellectual work? He had
not yet published a single piece written in English. He had not yet encountered even one
One of his later famous American students, he had left the world of a revolutionary treatise
on economics that nobody could read during the war and which nobody would care about
when the war was over. Mises would have remained an important figure in the history of economic
thought, but the laissez-faire Austrian School would never have come into being.
These darkest days were not without some good news. Even though it may have seemed insubstantial
At first, Henry Hazlitt had brought Mises in touch with the New York Times, and in March
1941 Mises wrote his first editorial. Apparently, this was his only editorial in 1941. In the
spring of 1942 he published three further editorials, all of which dealt with the crucial
logistical problems of Germany's war effort. In 1943, then, he published the last four
editorials which dealt primarily with problems of post-war reconstruction, especially monetary
Problems. For each of these articles he received $10. In May 1941 he took part in the meetings
of a group closely associated with the Austrian American League. The group included Dietrich
von Hildebrandt, Richard von Schüller, Raoul Ahlenheimer, Erich Hula and Otto Kalier Nierenstein.
The frontman in the league was von Hildebrandt, but the organizational driving force was the
secretary Otto Kalier, who had probably brought his cousin Mises on board.
In June 1941, Mises and other members of this group formed the Austrian Committee to promote
the independence of Austria after the end of the war. Leadership lay apparently in the
hands of Richard von Schiller. Most members of the committee were at least sympathetic
to the prospect of re-establishing a monarchy in Austria. This alone would have been a decisive
stumbling block for the cooperation of the committee with Austrian expatriates of Republican
convictions, especially with the Social Democrats. They still could not agree on the fundamental
and the principle of Austrian independence. They still pursued the old Anschluss agenda,
this time without Hitler. Ernst Hoare pointed out that until 1945 the expatriate leadership
of the Social Democrats avoided making any statement that could have been interpreted
as a commitment to Austrian independence or to the existence of an Austrian nation.
Planning for after the war still occupied a prominent place in Mises's work. On May
On the 20th, 1941, he reported to Young that he had made good progress on his research
project, a study of the social and economic problems of Central and Eastern Europe, which
Mises hoped could serve as a basis for post-war reconstruction in this region. He said he
would start writing it soon and he must have finished it by mid-July when he sent out copies
to friends and colleagues. In this 43-page memorandum, Mises restated the political and
Economic Case, for the establishment of an East European Union with a strong central
government growth through free trade and laissez-faire, response to the problems of linguistic minorities
and protection against the three mighty neighbours.
The new plan differed from the proposals he had made in early 1938, in that the proposed
Eastern Democratic Union, EDU, was to include not only the countries in the Danube Basin,
and virtually all of Eastern Europe, including the territories that in 1933 formed the sovereign
state of Albania, Austria, Bulgaria, Czechoslovakia, Danzig, Estonia, Greece, Hungary, Latvia,
Lithuania, Poland, Romania and Yugoslavia, as well as large parts of Prussia. The proposed
new political entity would thus cover 700,000 square miles, with about 120 million residents
using 17 different languages. Through the British Embassy in Washington, D.C., Mises
sent copies of the July version to Hayek, and in May 1941 Mises probably gave a lecture
at Yale discussing his plan for an Eastern European Union. In another paper that he had
finished writing by the end of May, he pointed out that his plan for an Eastern Union would
complement similar ideas for the establishment of a Western Union. This approach, the formation
of Political Blocks, as they in fact eventually came to be established after the Second World
War, NATO in the West and Warsaw Pact in the East, was more promising than the approach
of the League of Nations in the interwar period, which consisted in providing for the lack
of a peace ideology by the establishment of a bureau and a bureaucracy. He went on, It
is the general belief today that the sovereignty of the small nation has proved its impracticability
and that they have to disappear as independent states. This is true under present conditions,
even the United States must be reckoned among these small nations. I believe that the only
thing which the Western democracies can do is to form a union for defence. I do not see any other
reasonable solution for the post-war problem than a closer political and military union
between the menaced democracies. The great weakness of his own plan was that it, too,
was mute on the question of the peace ideology that could provide for the political and economic
integration of Eastern Europe. Some ten years later, Mises implicitly confessed this in private
correspondence with Salvador de Maduriaga. The late spring of 1941 greeted Mises with
the most welcome opportunity. He happened to meet again with Señor Montes de Oca,
a high official of the Mexican Treasury and executive president of the Banco Internacional,
Lewis Montes de Oca was a hard-nosed businessman and a great admirer of Mises' work. As early
as 1937 or 1938 he had invited him to visit Mexico City for a series of lectures, but
Mises had not accepted the invitation. It must have been a most pleasant surprise for
both of them to meet again in good health in Manhattan, and Montes de Oca instantly
renewed his invitation. Mises should come for two months to Mexico.
It was the first true sign of recognition in eighteen months. Mises was happy and Margit
was happy that her husband was happy. Mises and Montes de Oca also discussed the project
of translating Mises' socialism into Spanish. Montes de Oca proposed to do the translation
himself from the French edition, when Mises praised this edition for its accuracy and
style. Montes de Oca did not read German. He also proposed a concrete price for the
rights to the Spanish edition, $200 a month salary for Mises at that point. All this was
very good news, and as soon as his Mexican friend departed, Mises set out a syllabus for
his projected visit to the National University of Mexico.
He proposed eight lectures in English on the economics of capitalism, socialism and interventionism.
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.
A few weeks later Ludwig and Margit left Manhattan for a long vacation in New Hampshire's White
Mountains. They travelled by train on July 16 and arrived on the same day at their destination,
Glenn House in Gorham, New Hampshire, at the base of Mount Washington, the highest peak
in Northeastern America. Almost every day they hiked in the mountains. On the first
weekend he briefly returned to New York City. On July 21 and 23 he lectured at NYU's School
School of Commerce on the Economics of Government Regulation of Business. Although Mount Washington
was a much-visited site, Ludwig and market were by themselves as soon as they were far
enough away from the roads. Many hundred cars pass our place every day, as old people are
eager to glance five minutes at the peak to take a snapshot and to rush away, wrote Mises
to Hayek on August 14, 1941. The scenery of the White Mountains reminded them of the Alps,
In the serenity of defiant rocks, cool air and wide views, where sky and earth held court
in splendid majesty, he too could elevate his mind again above the material circumstances
into which great events had catapulted him. Here he considered again the big picture and
his place within it. It was probably here that Mises resolved himself to begin a new
Margaret must have been extremely pleased to see her husband regaining energy to such
an extent that he climbed most of Mount Washington's 6,288 feet. Near the end of their stay at
Glen House, more good news came with the publication of the Atlantic Charter on August 14. The
The US government seemed determined, after all, to support the United Kingdom in the
war, and to create a post-war order based on liberty. Mises also felt greatly relieved
by the Russian entry into the war against Germany.
The holiday had come just in time. After the United States entered the war, vacationing
was seen as unpatriotic, and the Miseses abstained from it. Back in New York, he threw himself
Mises moved into work with new verve. From now on things would improve in his life slowly
but steadily. In early October he and Margate moved into the apartment where they would
remain for the rest of their lives. It was subject to rent control laws. Margate had
found the three-bedroom apartment at 777 West End Avenue in Manhattan.
Mises continued to work for a few weeks on the proposal for the establishment of an Eastern
and Democratic Union. By October he had completed a memorandum, one of the first pieces that
he himself had written in English, and which contained his political testament for Eastern
Europe. Mises' thoughts now turned to America. To Hayek he wrote,
"'As I do not want to increase further the collection of my posthumous works I am writing
now in English. I hope that I will succeed to finish within a year of volume dealing
and critically with a whole complex of anti-orthodox doctrines and their consequences." He went
on,
"'Your essays on the counter-revolution of science are the most valuable contribution
to the history of the decay of Western civilisation. I hope that you will pretty soon publish the
whole book.'
I am, however, rather sceptical in regard to the practical results of our endeavours.
It seems that the age of reason and common sense has gone for ever. Reasoning and thinking
have been replaced by empty slogans.
A few days ago, Elvin Hansen delivered a lecture on post-war economic reconstruction. The old
stories about full employment, scarcity of foreign exchange, the need for foreign exchange
control and planning, more self-sufficiency, etc. He did not even mention the problem of
capital shortage. He seems to believe that taxing the rich would make it possible to
maintain the pre-war standard of living of the masses. Two centuries of economic theory
The three were in vain, as they could not kill the mercantilistic prejudices.
The audience, many ex-members of the Verein für Sozialpolitik, expressed full agreement
with the lecturer.
While they made preparations for the trip to Mexico, another piece of news made Mises's
day and gave him hope for the future.
On December 8, 1941, the United States declared war on Japan after the Japanese raid on Pearl
Harbor.
The Americans were finally in business.
One could save Hitler now.
A few months later, Mises wrote to a friend, a German Protestant minister in Massachusetts.
Of course, the war is a very unfortunate thing, but you are quite right.
It was inevitable, and it has to be fought to the end.
It is necessary to establish a new order where people who break the peace have to be treated
like those who resort to violence within each country.
Mises seems to have fallen back into what in more sober moments he called the dictatorship complex.
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.
In his monetary thought he had overcome this error, most notably in the context of his eventual rejection of the gold exchange standard.
The American entry into the war prompted various Austrian personalities to join forces and create
more formal organisations to prepare the reconstruction of Austria after the war,
which, they were sure, would end with an allied victory. Already in anticipation of the event,
and prompted by Roosevelt and Churchill's Atlantic Charter, Richard von Kudanova-Kalergi,
a close ally of Otto von Habsburg, had submitted a petition to the US Government
for a separate treatment of Austria after the war. Mises signed the petition along with many other
leading Austrian expatriates. After Pearl Harbor, the Austrian committee assembled in several
meetings during the month of December to discuss how to proceed. After a meeting on December 13th,
Mises prepared a one-page manifesto that outlined a political post-war order in Austria that would
be based on the principle of individual liberty. The paper probably resulted from the discussions
In any case, the document enthusiastically welcomed the Atlantic Charter as the
constitution of a new community of all free people, and it expressed a wish for an independent
Austria after the war. According to the most important stipulations of the document, the
new Austria would be a state of freedom and democracy even though the question of a concrete
form of state, parliamentary democracy, monarchy, etc., was explicitly left open. Moreover,
Neither the new Austria would not insist on the title of a sovereign country, because
sovereignty was no longer consonant with the spirit of the time, but would instead seek
integration into an Eastern European Union and a new League of Nations. But the Austrian
Committee was but one of many similar groups that started popping up, and Mises was also
a member of Austrian Action, a group led by Ferdinand Count von Tjanin. It was clear
that an effective representation of Austrian interests in America was impossible under
under these conditions, and the leaders of the various groups decided to join forces.
In early February 1942, Mises, then in Mexico City, received a telegram with the invitation
to join the newly formed Austrian National Committee. The telegram was signed by Walter
Schuznick, possibly a relative of the last Chancellor of Free Austria, and Hans Roth.
In 1941-1942, Schuznick was the driving force behind attempts to bring a group of mostly
Six weeks in Mexico
The trip to Mexico late January to March 1942 by far surpassed their expectations. They were
were treated with the highest respect. Hotel reservations had been made at the local wits,
and Mises found an audience prepared for and receptive to his message. He started lecturing
on January 14th, and finished his programme by February 20th. Besides his course at the
School of Economics, which he taught in English, he also gave two lectures in French at the
Independent School of Law. The course at the School of Economics paid 800 US dollars, and
For the lectures at the law school, he received 50 US dollars. The same files from which this
information comes contain his very detailed lecture notes. At that point, he probably
did not yet feel quite comfortable speaking in English, which allowed for a detailed reconstruction
of the matters he dealt with.
The course only attracted some 8 to 14 students. Still, Mises thought it was a great success.
The audience was, of course, small, as the students mostly do not understand foreign
Sciences. Montes de Oca attended each session, but Mises had particularly animated discussions
with Senor Eduardo Hornedo. Margit stayed in and around the hotel, and in the evenings
Ludwig joined her and often took her out. They also spent many evenings at the home
of Montes de Oca. At these meetings Mises again and again expressed his pessimism about
the future, and again and again his Mexican host protested that it was not too late to
to start a fight for liberty and sound economic policies. Montes de Oca was indeed firmly
convinced that the best place to start this fight was Mexico. He had made Mises a job
offer by correspondence even before his Austrian guest had left New York. The Bankers Association
and the Chamber of the Mining Industry, two of the three most important Mexican business
associations, were interested in hiring Mises for an extended stay as an economic adviser.
Mises wrote back that the offer was very flattering and tempting, and that he was anxious to get
more detailed information about the functions which it is expected I would fulfil.
Six weeks later Montes de Oca replied with a firm offer. According to his proposition
Mises would become the head of the economics department of the two business associations,
with sufficient personnel to assist him, and at a comfortable monthly salary of one thousand
Mexican pesos, a lunch for one person at the ritz cost three or four pesos. He would also
He would be teaching courses and seminars at any department he wished at the National
University of Mexico and at the Colegio de México, and he would be free to take up other
paid teaching assignments. The offer was for three years and could become effective anytime.
Mises would not even have to return to the United States after his upcoming visit. This
was a great temptation. Had the offer come a year earlier, Mises would probably have
accepted it on the spot, but he had since made new plans. Was his future not in the
In the United States, Montes de Oca tried to bring Mises to an early commitment by correspondence,
but his Austrian friend remained steadfast. He would first pay a visit to each of the
two business associations before making a decision.
Upon his arrival in Mexico City, Mises conducted very wide-ranging talks with his Mexican hosts.
He even started to write a couple of words in Spanish, and at the request of his hosts,
He began working on a memorandum analyzing Mexico's economic problems. In the course
of the next few weeks he perused the statistical yearbooks of the country and became acquainted
with other literature on Mexican conditions. He read the press to the best of his ability
and led many discussions with his host and other people. Slowly a more concrete picture
of Mexico became clear to him, which he later described in a letter to Hayek.
Mexico is a country without industry and very short of capital. The soil is in the greater
are part of the country very poor. The result is that they have to import wheat and maize.
Mises meant what Americans call corn, but the rulers, generals, trade union leaders
and pink intellectuals intend to start industrialisation by ruthless confiscation of capital. Neither
this attitude nor its effects differ from conditions in other countries, but really
amazing is the fact that there are some people, of course small elite only, who have a very
making insight into the problems involved and try to educate the intellectuals.
Then Mises went on to compare this Mexican elite very favourably with the small group
of economists who, according to Hayek, resisted the trend toward government omnipotence in
Great Britain. Speaking of his Mexican hosts, Mises said,
You cannot find such men in other countries. Contrary to your statement in the Nature article,
everybody in this country advocates all-round planning. Sir William's ideas, published
in the London Times a few days ago, all economists, businessmen and pressure groups sympathise
with. They are convinced that current events have demonstrated in an irrefutable way the
superiority of the post-office system. People do not learn anything, they despise theory,
and they interpret facts from the point of view of their errors and prejudices. Sir William
is Lord Beveridge. Still the fact remained that Mexico was a very poor country and that
The Forces of Reason were weak. Luis Montes de Oca must have sensed that Mises was not
exactly enthusiastic about another Chamber of Commerce career and brought up the prospect
of a research organisation under Mises' leadership, a private institute of the social
sciences. This was much more to the liking of his Austrian guest, and when Mises departed
he promised that he would write a paper for Cuadernos Americanos, a journal managed by
The Austrian National Committee Ludwig and Margit returned to New York in
In March, a letter from Machloop had arrived informing them of another unsuccessful attempt
to secure a suitable job for Mises, this time at Rochester. The chairman of the department
had told Machloop that he should be ashamed to approach so distinguished an economist
as Professor Mises with the smallest salaries at our disposal.
Fortunately, the Rockefeller grant to NBER had been extended, though apparently not without
and Resistance. Mises applied for the extension in December 1941, based on a six-page report
on his research activities in the previous year. The extension was not confirmed until
mid-February, but it is possible that the delay was the result of his trip to Mexico.
For the next few months, Mises took an active role in the meetings of the newly constituted
Austrian National Committee. As he said on many occasions in private discussions and correspondence,
He was extremely pessimistic with regard to Europe's future.
You can't have a reasonable state of affairs with unreasonable people.
I do not believe that a member of the Hitler Youth, or of the equivalent groups in Italy,
Hungary, or so on, can ever turn to at honest work and non-predatory jargs.
Beasts cannot be domesticated within one or two generations.
But true to his motto, this was no reason for him to step back in resignation.
On the contrary, he threw himself into work preparing post-war policies and he encouraged
his correspondents to do the same. Mises contributed several memoranda dealing with the principles
of post-war reconstruction, Entwurf von Richtlinien für den Wiederaufbau.
The Austrian National Committee was a creation of Otto von Habsburg, who had the ear of the
American administration and turned out to be the common denominator for the feuding
Autosuccess also boosted the monarchial principle. For years the leaders of the legitimist government
had been the most ardent champions of Austrian nationhood. The movement had been suppressed
before 1933 because Austria's neighbours and its former war enemies had threatened with diplomatic
and military sanctions in case of attempted restoration. When the suppression stopped,
the legitimists very quickly gained political ground. By 1938 Otto von Hapsburg had been
He must have at least toyed with the idea of re-establishing his dynasty after the war,
and many devoted followers, as well as the usual careerists who sensed an opportunity
for political windfall profits, encouraged him to pursue this strategy. These circles
of Austrian expatriates generally refer to Otto von Habsburg as His Majesty Kaiser Otto
and called him Imperial Highness. Mises himself would continue to use this title in correspondence
with Habsburg long after the prospect of a restoration of the Austrian monarchy had faded.
In the heated days of the Second World War, many Austrian expatriates were betting on
a political return of the Habsburg dynasty after the war. Mises' former colleague at
the University of Vienna, Heinrich Graf von Degenfeld, was one of the staunch supporters
of a Monarchical Restoration on Legitimist Grounds.
In mid-April 1942, Habsburg asked Mises and a few other men for their detailed opinion
on some 40 to 50 questions concerning strategic and tactical problems that Habsburg confronted
in his double capacity as the leader of the Austrian National Committee and of the House
of Habsburg. Mises put this job on the front burner and answered the questionnaire within
in a week. Only one part of Mises's confidential report survived, the one in which he comments
on the conditions under which a restoration could be achieved. Mises wrote that there
was no contradiction between national self-determination and a monarchial regime, provided that the
monarchy was established by a free referendum. This point of view reflected the Polish heritage
of its Author.
Poland had, in fact, had an elective kingdom from 1573 to 1795.
The aristocratic parliament, the same, elected the king by unanimous vote.
But Mises did not base his argument on historical precedent.
Rather, he argued that only an elected monarch enjoyed a secure basis for his reign, enthronement
on the basis of legitimist claims, against the will of the people could not last.
was likely to be resisted and eventually overthrown. As an alternative approach, Mises sent along
the memorandum containing his proposal for the establishment of an Eastern Democratic
Union. The Austrian National Committee united all Austrian right-wingers and provided them
with political representation in Washington, D.C., in the person of Egon Ranshoven-Wertheimer.
One success of this group was the proclamation of Austrian Day on July 25, 1942, by twelve
Both State Governors and U.S. Secretary of State Cordell Hull declared that the United
States Government had never recognized Hitler's annexation of Austria. This dissociation of
German villains and Austrian victims would remain the one common position of the various
Austrian right-wing expatriate groups throughout the war, and here they achieved a clear success.
The expatriate Social Democrats never wavered from the agenda of a greater Germany. Mises
Mises took part in a plenary meeting of the Austrian National Committee on April 22, 1942,
and a month later he was elected to a subcommittee on post-war reconstruction.
In June 1942, he also took part in a subcommittee on foreign policy, where it appears that he
had a major impact.
The first sessions discussed and drafted a Declaration of the United Free Austrians based
on the December 1941 Manifesto of the Austrian Committee.
In contrast with that document, however, the declaration asserted that Austria had been
coercively taken over by the Nazis and that it was therefore under de facto occupation
by a foreign army. The declaration also de-emphasised integration into international political federations
and emphasised the concept of sovereignty. Most important, the declaration avoided the
question of which form of government Austria should adopt after the war. According to the
As the earlier manifesto, the form of government should be determined through the deliberation
of a national assembly, but the declaration was mute on this point because a monarchist
faction under the leadership of Mises' former colleague, Count Degenfeld, wished to maintain
the option of a legitimist foundation for a future Austrian constitutional monarchy.
For the time being the compromise was good enough for Mises and other republicans. The
The important thing was that some agreement be reached as a basis for the rest of the
agenda. Mises outlined this agenda in an Aktionskalender, a project schedule he seems to have circulated
within the Committee. According to this schedule, the next step would be to enter a negotiations
with two left-wing groups of Austrian expatriates to support a common declaration. Then the
results should be published and further negotiations started, this time with the Czechs and the
But it did not come to pass, and apparently Mises gave up active participation in the
committees and did not even attend the dinner in honour of Otto von Habsburg's 30th birthday
on November 20, 1942. Work in the Committee must have convinced him that he had no future
in Europe. The old continent was ravaged by war because it had been in the firm grip of
statist illusions. Ex-patriots who were making plans for post-war Austria were entirely under
the same spell. It is true that they despised National Socialism, but they did not despise
Socialism per se, each of them had his own little scheme, and invariably all of these
involved the state running the country. Many years later, he wrote in correspondence,
As the Bourbons of the Restoration, many Austrians have learnt nothing and forgotten nothing.
Among the few groups who showed any interest in his analysis of the necessity for, and
the problems of, a post-war Eastern European Union, was the Socialist Central and Eastern
and European Planning Board, an organisation that envisaged a post-war federation among
Czechoslovakia, Greece, Poland and Yugoslavia. These must have been his feelings in 1942
as well.
New Friends The Honorarium for the Mexican Lectures supplemented
their income, and things looked far rosier in 1942 than they had in their first year
in the New Country. But the financial situation was still bleak, with no permanent source of income
and Ludwig's retirement fund frozen in Austria. On December 18th, 1942, he reported on the
activities of the year and applied for another extension of his research grant. He also tried
to convince MBER to finance a large-scale research project to elucidate the origins of modern total
and Italianism. He planned a comprehensive seminar with people like Roger, Lübcke, Hayek and others.
The project did not materialise, but his research grant was extended in January 1943. Mises even
received a two-year extension under the same conditions as before. It was a normal policy
of the Rockefeller Foundation to subsidise the integration of European emigre scholars
into American universities for about two years. Thus, Mises could be happy to obtain twice as
as much support. However, it was to be the very end of their cooperation. The second
year's bonus was a not-so-subtle goodbye. The Rockefeller Foundation's Willetts made
it clear and MBER's Carson made it even more stark that this extension would be the
last one. Meanwhile, Willetts was on very good personal terms with Wesley C. Mitchell.
Fortunately for Mises, he had found a more amenable source of support independent of
of the Rockefeller Foundation, the National Association of Manufacturers, NAM leadership
opposed the New Deal and other statist projects. These men were determined to prepare a counterattack,
starting a large-scale campaign to educate the American public about the benefits of
what they called the free enterprise system. NAM needed intellectual leadership from people
who were conversant both in the world of business and in the world of ideas. By February 1943
They had discovered what they were looking for in the person of Ludwig von Mises. Many
years in the Vienna Chamber of Commerce had accustomed him to dealing with businessmen
and to communicating effectively his economic and political insights to this audience. Just
when the Rockefeller Foundation made it clear that they were no longer interested in supporting
the Austrian economist, NAM immediately stepped in and offered to hire Mises as a consultant
starting today. Mises became a member of the Economic Policy Advisory Group. He later became
a member of NAM's Economic Principles Commission and of its advisory group on international
economic relations. The contract provided for an annual honorarium of $3,000, which
was 20% more than what Mises earned at NBER. The contract was extended on an annual basis.
In the 1944-1945 period, Mises's honorarium increased to $3,600. His taxable income increased
to almost $6,100 in 1943 and almost $7,100 in 1944.
Mises worked closely with NAM secretary Noel Sargent, who in 1943 commissioned a study
from him on international monetary reconstruction after the Second World War. By the fall of
Over the year, Mises had written a 68-page memorandum on the subject in which he advocated
a return to the gold standard and criticised reconstruction plans that Harry Dexter White
and Keynes had made in preparation for the 1944 Bretton Woods Conference. A few months
later, he took part in an LAM-sponsored expert meeting to discuss the Keynes and White proposals.
The group included Rufus Tucker from General Motors, Brentson Professor Edwin Kemmerer
and Mises's old acquaintance Albert Hahn, who became a good friend during their years
in Manhattan. By June 1944, Mises had prepared another memorandum, this time on monopoly.
Probably this is the manuscript that was published posthumously as Monopoly Prices.
A few months later he addressed two advisory committee luncheons on the West Coast. At
that point he had already acquired a solid reputation through the publication of bureaucracy
and Omnipotent Government in the Same Year by Yale University Press. Accordingly he was
presented as the most eminent and uncompromising defender of English liberty and the system
of free enterprise which has reached its highest development here in the United States. He
addressed the local NAM chapters in San Francisco October 18th and Los Angeles October 25th
and met such excellent men as Leonard Reed, Orville Watts and R.C. Hoyles. Reed had invited
Mises for a lecture on behalf of the Los Angeles Chamber of Commerce. He had learned about
Mises' NAM-related trip to the West Coast through their mutual friend Walter Zulsbach.
The encounter with Leonard Reed was a fateful one. They may have met a few years earlier shortly
after his arrival in the United States. Reed later recalled such a first meeting in 1940,
at which she had been much impressed by the purity of Mises' opposition to any government
and power beyond the minimum necessary for the preservation of domestic peace and the
market. Mises had reportedly attended a party in Reed's home. Earliest extant correspondence
started in June 1943, when Reed asked Mises whether he would be ready to give lectures
in the framework of a business education campaign. Reed invited Mises for dinner to his house
on October 19th or 20th, 1944. One of the other guests asked Professor Mises,
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.
Mises had remained in touch with Reed through correspondence.
He may also have been on Reed's mailing list and received one of the 1.5 million copies
of Reed's four-page pamphlet, Why Not 1900, a reaction against FDR's proposed legislation
to seize all annual salaries in excess of $25,000. Reed had argued that there was no
objective reason not to seize all salary in excess of the national average salary, which
happened to be $1900. Reed was a self-made businessman who had spent the greater part
Reed organized a sort of pilgrimage for 700 Californians to Washington, D.C., and caught
the eye of Herbert Hoover's entourage. His career was made. He moved on to even higher
Once in his new position in Los Angeles, he hired
Richard V. Orville Watts, a professor of economics who had been a popular instructor at the Western
School. Watts was a disciple of Harvard professor Thomas N. Carver, who had lectured for Reed's
Western School for commercial organisation secretaries in the 1930s. Watts took over
from Carver when Carver's Honorarium became unaffordable for Reed. Watts thus became the
first economist ever hired by a US Chamber of Commerce on a full-time basis. Together,
They fought the New Deal rather effectively, organising many courses and other educational
conferences throughout California. Mises's lectures were part of this effort. On the
evening of Tuesday, October 17th, one day before his NAM luncheon talk, Mises gave a
lecture to the Rotary Club on credit expansion and depression, and that same evening addressed
an audience at the Santa Ana High School on the causes of the war. Mises stayed as a
and a guest at the home of R.C. Hoyles, who published the predecessor of the present-day
Orange County Register. Several weeks before the talks, the Los Angeles
Chamber of Commerce and the Register started promoting the event through articles and columns
and it turned out to be a success. Reed in particular was much impressed by what he had
seen and heard. A year later he would move to New York and eventually establish the mother
of all libertarian think tanks in collaboration with Mises. The association would last for
the rest of Mises' lifetime. The alliance with NAM, in contrast, did not last long. Mises
continued to advise NAM, co-authoring a two-volume study on the American individual enterprise
system which was published on April 1, 1946. The book was part of a large-scale NAM campaign
aiming at the abolition of the wartime Office of Price Administration.
The campaign succeeded and the office expired, but so did Mises' contract.
He continued to serve on NAM's advisory group on international economic relations, but resigned
at the end of 1948, when NAM became increasingly agnostic on the question of inflation and
its consequences.
The final straw for Mises was, when NAM started championing the view that increased productivity
was the proper antidote to inflation. Many years later he got another contract on the
NAM staff, starting January 1954 for $6,000 per annum plus $2,400 expenses. At about
the same time he began his work for NAM, Montes de Oca wrote from Mexico City that he had
made good progress in the preparation of the International Institute of the Social Sciences.
He now asked Mises to submit a list of prospective permanent professors, and some indication
of the salaries they would require. Mises replied that Walter Salzbach, Alfred Schütz,
Louis Roger, Jacques Ruff, and he himself, all European expatriates living in New York
without American citizenship, would be available for permanent employment in Mexico City for
for an annual compensation of some $6,000 per head. This was a fairly generous salary
and proved to be a major stumbling block for the establishment of the Institute. But in
early 1943 everything seemed possible. A group of first-rate intellectuals with classical
liberal pedigree was at least potentially available, and another group of men was interested
in financing the venture. Moreover, there was a plan. Louis Rouget would be invited to the
The University of Mexico City for a series of lectures. Mises was to prepare a study
on Mexican political-economic conditions, which Montes de Oca had commissioned for his
Banco Internacional, and Montes de Oca continued to work on a translation of socialism. In
planning for the future teaching staff of an institute in Mexico City, Mises had also
brought up the names of Plant, Machloub, Rapa, Röpke and Robbins. It is not clear whether
Mises had drafted a longer list of prospective staff, permanent and temporary, and also
a short list of the subjects to be taught. The staff included Machloub, Habeler, Nurske,
Sulzbach, Vögerin, Pater, Schutz, Roger, Kelsen, Houla, Rüff, Baudin, Hayek, Robbins,
Blant, Hood, Wiese, Ainaudi, Rappard, Striegel, Heckscher and Bulquin. The main subjects to
to be taught were 1. economics, 2. history and critical analysis of socio-economic doctrines
in the last 200 years, 3. constitutional history since 1776, 4. economy and social history
since 1750, and 5. modern public finance. He also made one last attempt to win Lionel
Robbins over. In early 1943, he invited Robbins to come to New York. Robbins combined his
scientific authority and personal network with great organisational skills and an unusual
The fate of Britain and thus of Europe depended on where he weighed in. Mises sought to get
him out of his Cambridge and London milieu, to breathe the fresh air of liberty, but Robbins
never came to New York. Instead, he became a champion of the British interventionist
government. There is no surviving correspondence between December 1935 and early January 1943,
And then it was Robinson's wife, Iris, who wrote, thanking for a Christmas parcel with
sweets, chocolate, lemon juice and more, that the Miseses had sent. Two days later, her
daughter Anne wrote too, and on January 25th, Lionel himself also renewed their correspondence.
Mises eventually delivered the study on Mexican economic conditions to his Mexican friend
when the latter came to New York in December 1944. Montes de Oca was now eager to have
have an epilogue for the forthcoming Spanish edition of socialism. He had still not given
up on the Institute of Social Sciences, although another problem besides the salary question
had so far prevented any progress. Most of the prospective permanent and temporary teaching
staff, Robin Plant, Machloub Zultbach and others, were by then employed in war offices
of the French, British and US governments and were either unable or unwilling to leave
until the war was over. Montes de Oca invited Mises to return to Mexico City as a visiting
professor during the year, but Mises declined because he planned to apply for US citizenship
in August, five years after his arrival, and sought to avoid any complications that might
result from a trip abroad. Mises's social integration into the cosmopolitan milieu of
New York accompanied a more general integration into American society. One sign of adjustment
was the change of Mises' manners, which became less formal in his dealings with friends.
During 1942, when he wrote a series of editorials for the New York Times and other journals,
Henry Hazlitt felt comfortable enough addressing his Austrian friend to leave behind the differential
Professor Mises in favour of Dear Ludwig, July 1942 and later Dear Lou, December 1942.
In April 1945, he made another important and lasting acquaintance when he started correspondence
with Philip Courtney, at the time the Vice-Chairman and Treasurer of Cotille, the perfume company.
Mises wrote to congratulate Courtney on a paper in which he had criticised Keynesianism.
Courtney, who already knew Mises's work, wrote back, saying there was no person in
the world whose opinion I value more than yours, and that he hoped to meet him soon
at dinner with their mutual friend André Morrois.
Mises had met Morrois at Louis Rouge's apartment in New York City.
The dinner at Morwas' apartment probably took place on May 21st or 22nd, 1945.
On a professional level, however, Mises' integration proceeded more slowly. The essential
reason was his unwillingness to trade away his convictions for social acceptance. By
1944 he was a member of the New York Overseas Rotary Fellowship, which meant nothing to
him. He found the meetings extremely boring and, after a short while, stopped attending
He also had some access to the national press, through Hazlitt at the Times, but quickly
ran into confrontations. A case in point is a letter to the editor of the New York Times
published on January 3, 1943. Here Mises explained that mere organisational devices would not
make for world peace after the war. In particular, he rejected the idea that some new version
of the League of Nations would make international relations better than they had been in the
in the interwar period, only a radical change in political mentalities and social and economic
ideologies toward the classical liberal position could make the world safe for peace and prosperity.
The letter provoked the editor of Barons to solicit similar pieces from Mises, but this
cooperation was not fated to last very long. Mises contributed only one article on big
business and a common man, which was published in February 1944, and only after sharp protestations
from some associate of barons.
The essential point under contention was whether or not Mises had exaggerated in claiming that
the inventive spirit was absent in Russia.
Mises wrote,
As far as I know, the best that the Russians have achieved was imitating foreign models.
The major attraction of their exhibitions at the world's fairs in Paris and in New
York were imitations of American agricultural implements and of Ford cars and tractors.
Their planes and tanks were not original.
The German General Staff mistrusted the airplane and the tank and tippets. Before the First
War, belittled the U-boat. The zeppelin is a genuine German invention, but it is both
commercially and militarily impracticable. The cooperation with barons ended soon after.
Similarly, Mises's integration into professional organizations of American economists suffered
a setback. Just when Fritz Machlup joined the AER editorial board in October 1943, Mises
Mises felt he had to stop further cooperation with the journal. What had happened? He reviewed
books for various journals, focusing on works dealing with post-war reconstruction in Europe.
Two of these were invited reviews for the American Economic Review and the AER had published
a rejoinder by a certain Alfred Brauntal to the first of the two reviews without giving
Mises the opportunity to respond. To Mises this was a clear sign of discrimination. Writing
According to Makhluk Mises said that he was no longer prepared to contribute to a periodical
whose editors failed to comply with the principles of literary decency for partisan consideration.
They should rather send their books directly to a Mr. Brantall or other comrades.
Five years later he wrote in similar fashion to the Dean of the School of Business Administration
of the University of Buffalo, referring to your letter of May 11th, I am sorry to inform
you that I have no suggestions to offer for the program of Econometric Society.
American Citizen Mises had applied for citizenship at the earliest
possible date, August 1945, and on January 14th, 1946, he became an American citizen.
He renounced his title of hereditary Austrian nobility, but kept the name Ludwig von Mises
as a Nordenblum. One of the first things he did was to get in touch with his old employer
to reclaim the retirement funds that he rightfully owned, but which had been denied to him in
an August 1938 letter from a Nazi official. He was told he was entitled to a monthly payment
of 953.95 shillings starting May 1st, 1945. The money was transferred to his old bank
account in Vienna. Foreign exchange controls were still in place, however, and Mises could
not transfer the money to an American account unless he provided an authorization from the
National Bank. Did he ever think about returning to Vienna? He did not. Mises was still in touch
with some pre-war acquaintances, for example with Carl Brockhausen and historian and writer Richard
Scharmanz. He had Idaho publisher J. H. Gibson send them care packages. Gibson owned Caxton Printers
Ltd. in Caldwell, Idaho. His brother was the noted American colonial historian Lawrence Henry Gibson.
He made his money as a commercial printer and with an office supply company. The profits
he invested in his hobby, publishing literature he personally liked, such as libertarian conservative
books, for example Albert J. Knox, Our Enemy, The State, 1935, Karol Karatz, The Revolution
Wars, 1938, and Erich von Kühnert, Ledin's Liberty or Equality, 1952. Mises first met
At him in January 1947, Gibson spontaneously offered help for those Mises thought deserved
support in the hard post-war years. Mises named three Austrians, Bockhausen, Schammerz,
and Friedrich Köhler, his long-time attorney in Vienna, and three Germans, Passau, Eugen
Fink, a professor of philosophy in Freiburg and former assistant to Edmund Husserl, and
Carl Hagedorn, an attorney in Hamburg and friend of Margit's family.
The next year Gibson repeated his offer, and did so once more in the spring of 1953. Mises
then brought Gibson in touch with Erich von Kuhnelt-Ledin, who became another author of
Caxton Printers. In a letter dated October 25, 1952, he enthusiastically endorsed Kuhnelt-Ledin's
Liberty or Equality as well as three of Garrett's books. He also took care of the surviving mother
of Ludwig Betelheim-Gabilon, who had died at the hands of the Nazis. Still, Mises did
had not used the opportunity to visit Germany or Austria. Both countries were still occupation
zones and access required special permits. From correspondence with Schamatz, he knew
that Vienna was in even worse shape than after the First World War, and this time lacked
the leadership to prevent the rampant socialisation of the entire country. As Schamatz wrote,
many Austrians had been looking forward to Allied victory from which they expected liberation
But Mises's disinclination to visit Vienna also had another source, as he wrote to his
My first friend Carl Brockhausen, a former professor of constitutional and administrative
law at the University of Vienna, I do not yearn for an encounter with a mob who applauded
the massacre of excellent men. Ich sehne mich nicht danach, dem Pöbel zu begegnen,
der bei den Niedermetzeln ausgezeichneter Männerbeifall geklatscht hat.
Brockhausen brought this issue up in later letters, too, asking Mises where he had received
In a letter dated July 4, 1949, Brockhausen, more than 90 years old, said he was about
to look into the accounts of Nazi war crimes. It is not quite clear who Mises had in mind.
The good-hearted Brockhausen tried to convince Mises that this severe judgment was not borne
out by the fact. There had been no lynch marks in Vienna. In early March, 1940, Mises had
declared his readiness to contribute to the reconstruction of our devastated, fevistatis
Mises, Austria. Clearly the early use of such vocabulary made it difficult to keep pace with
the subsequent devastation. But by mob, Mises probably meant men such as Hans Mayer, Ottmar
Spann, Sprick and Nadler, who had actively supported the Nazi takeover of Austria and
yet were once again in positions of influence. Mises did eventually make his way back to
Vienna, but only to visit.