CHAPTER II School Years
The Mises family moved to Vienna sometime between 1883, when Ludwig's brother Richard
was born, and 1891. The move probably occurred before the fall of 1887, when six-year-old
Ludwig began the mandatory four years of elementary schooling. The family settled in a suburban
apartment in close proximity to what was then the city of Vienna, and today is its first
Vienna
For many centuries Vienna had been the administrative centre of the Habsburg Empire. After the revolution
of 1848 to 1849 and Franz Josef's abortive attempt to reintroduce royal absolutism, the
The Austrian liberals had risen to power at the end of the 1850s. Their reign lasted about
30 years, enough time to reshape the city to reflect their ideals. They demolished ramparts
that separated the old city of Vienna from the surrounding suburbs, replacing them with
the Ringstrasse, a magnificent U-shaped boulevard that now enclosed the old centre from three
sides. The fourth border was an arm of the Danube River. The Ringstrasse became an architectural
and Aesthetic Triumph, which, by virtue of its geographical concentration, surpassed
in visual impact any urban reconstruction of the 19th century, even that of Paris.
The nobility too had its palaces on the new boulevard, but the dominant edifices embodied
the liberal bourgeoisie's political and cultural values. On the very spot were the
large city ramparts had once symbolised the military presence of monarchial rule, now
Now an opera and a Hofburg theatre celebrated the performing arts.
Splendid museums for natural history and art displayed human achievements and discoveries.
Parliament buildings hosted the new political forces present in the Reichsrat, new buildings
for the University and the Stock Exchange represented the forces of economic progress.
And a magnificent neo-Gothic city hall symbolised the rebirth of municipal autonomy after ages
of Imperial Supremacy. Young Mises could reach all of these places within a 20-minute walk.
Unlike most other major European capitals, the city of Vienna was surprisingly small.
Until the 1890s, Vienna counted barely more than 60,000 inhabitants. Felix Umari recalls
everything outside the center was known as Vorstadt, the suburbs, which almost meant
the same as provinces. After 1900, a municipal reform merged Vienna with its proximate suburbs.
The old Vienna thereafter became the first district of the new city. Vienna hosted all
central political institutions and administrations, the most important cultural centres and the
headquarters of the largest corporations of the entire empire, but one could walk across
the entire concentration in a half-hour stroll. By comparison, it takes more than two hours
of walking to cross Paris within the boulevard périphérique, and it takes roughly the same
time to walk through the city of London. It was easy to encounter the Empire's most famous
and powerful people on the streets of Vienna. It was almost impossible not to see someone
in some eminent position. Among the most popular individuals were opera singers, stage actors
and Members of the Royal Family. When a famous singer walked by, or one of the more than
sixty archdukes or archduchesses drove by in their carriage, people would greet them
with spontaneous applause, and when the star from the opera or Hofburg theatre died, flags
flew at half mast. Johnson observes that even simple members of the opera or philharmonic
orchestras were greeted in public, and that many of them performed chamber music in the
Salons of the Wealthy. Yet the best example, and almost unbelievable
for us today, was Franz Josef himself, who frequently departed in just his carriage, from
the Hofburg Theater in the city to Schönbrunn Palace on the outskirts of Vienna. Anyone could
walk within reach of the carriage and lift his hat to the white-haired emperor. It was
similarly impossible not to meet one's friends, relatives and colleagues on the way to or
The Viennese cultural elites did not live in secluded social circles. They perceived
themselves as taking part in an all-encompassing social life that brought together ministers
Workers and students, opera singers and scientists, stockbrokers and historians of art, philosophers
and painters, psychologists and novelists, office clerks and architects and so on, in
countless variations. Having so many people in so small a city contributed to making Vienna
from the 1870s to the 1930s a cultural hothouse that would shape much of what was most valuable
in 20th century civilization. In those years Vienna became the birthplace
of phenomenology, medicine, psychoanalysis, Zionism and Jugendstil en Nouveau. It was
one of the cradles of modern analytical philosophy and, most importantly, it was the birthplace
and home of Austrian economics, that school of thought that Ludwig von Mises was to lead
and Transform.
In the words of cultural historian Karl Schorske, in London, Paris or Berlin, the intellectuals
in the various branches of high culture, whether academic or aesthetic, journalistic or literary,
political or intellectual, scarcely knew each other. They lived in relatively segregated
professional communities. In Vienna, by contrast, until about 1900 the cohesiveness of the
The whole elite was strong. The Salon and the Café retained their vitality as institutions
where intellectuals of different kinds shared ideas and values with each other and still
mingled with a business and professional elite proud of its general education and artistic
culture.
The Cafés had a decisive impact on the education of Vienna's young intellectuals. The Café
was of course a place to have coffee or a small meal, but it was also where professional
people met to talk business, and everyone else met to discuss current interests.
For students, the café was also an institution of learning. The better café subscribed to
the major international journals of science, art and literature. Designed for the entertainment
of customers, these subscriptions made the café's function as a kind of private library.
As a teenager, Mises must have spent many afternoon hours here, reading the latest articles
in all fields of knowledge and achievement and discussing them with his peers. It was
probably here that he first encountered the writings of the German Historical School under
Gustav Schmoller and found them less than fully convincing. He later recalled,
I was still in high school when I noticed a contradiction in the position of the Schmoller
School. On the one hand, they rejected the positivistic demand for a science of law that
was to be built from the historical experiences of society. On the other hand, they believed
that economic theory was to be abstracted from economic experiences. It was astonishing
to me that this contradiction was barely noticed and rarely mentioned.
He was equally bewildered by the way the historical school presented its case against laissez-faire,
liberalism, Schmoller and his friends seemed to argue that the modern liberal era contrasted
unfavourably with older collectivist times. But this made no sense. At that time I did
not yet understand the significance of liberalism, but to me the fact alone that liberalism was
an achievement of the eighteenth century, and that it was not known in former times,
was no cogent argument against it. It was not quite clear to me how an argument could
should be derived from the fact that in the distant past there had been community property
in land, nor could I understand why monogamy and family should be abolished because there
had been promiscuity in the past. To me, such arguments were nothing but nonsense.
The sheer cultural density of the city almost forced the Viennese to take an interest in
science, beauty and art. Thinking and talking about such things were not reserved for the
for the elite or particular occasions. They were a part of Vienna's daily common life.
Virtually everybody from the emperor to the housewife knew something about the latest
achievements of science and held some opinion about this actor or that novel. In fact, any
kind of culinary, artistic, scientific or technological achievement met with well-informed
appreciation and critique. This permanent criticism, the famous Viennese Gruntern, sharpened
everyone's minds and attain standards virtually without equal. While the Viennese were interested
in all fields of endeavour and refinement, what they were truly enthusiastic about was
music. From about 1770 to 1810 they had witnessed the most extraordinary explosion of musical
creation the world has ever experienced, when the geniuses of Haydn, Mozart, Beethoven and
and Schubert burst onto Vienna's stages in rapid succession.
Johnston writes in Vienna Vienna, The concentration of the supreme genius of Haydn, Mozart, Beethoven
and Schubert in one city over two generations has no parallel in the entire history of culture.
The closest parallel would be the Rome of Raphael and Michelangelo, or the Athens of
Sophocles and Euripides. Yet in no other art do the greatest geniuses so outstrip lesser
The City on the Danube became the world capital of music and remained so into the 20th century.
Passion for music united all ethnic, social and political strata of the population. Differences
that made them opponents in politics could not separate them when it came to enjoying
old and new masters in music. And in distinct contrast to politics, where irreconcilable
In the words of William Johnston, slovenliness, schlumperei, might be tolerated in politics,
but not in musical or theatrical performance.
Mises did not share the Viennese acceptance of schlumperei when it came to politics, but
he did share their passion for music. It would endure throughout his life. His stepdaughter
Gita Sireni recalled her 90-year-old stepfather sitting next to her at a performance of Strauss's
Blue Danube in New York City. The old man's eyes were shining as he hummed along with
the music.
Viennese Jews
Ludwig's parents could rely on a closely-knit network of relatives that greatly helped their
integration in Vienna. In particular, Arthur and Adele could build on blood ties with the
local members of the Mises and Landau clans, as well as with the Nierensteins and Kaliers.
Ludwig and Richard would have lifelong friendships with the young Nierensteins and Kaliers.
On weekends Ludwig often saw his maternal grandfather Fischerlandau, whom he admired
very much. His paternal grandfather had died before he entered the gymnasium. Summer vacations
were spent in the countryside with the Nierensteins and other cousins. Social contacts outside
the network of Jewish families must have been rare. The old Viennese establishment remained
closed to newcomers, and even the noble pedigree of the Mises family was too recent to be taken
and seriously by them. Ludwig would see the day when titles no longer counted, officially
at least. After the destruction of the monarchy in November 1918, the new republican government
abolished all titles and banned their use in print. Ludwig Heinrich Edler von Mises
became Ludwig Mises, according to Austrian law. Outside the country, however, he would
and continue to use the title that his great-grandfather had earned for his family.
The liberal era in Austria had reached its peak in the 1870s. While the following decades
would see its decline, it remained strong enough to accommodate the Galician and Moravian
Jewish migration to Vienna. All great metropolitan cities of the world derive their dynamics
through the influx of new blood from rural provinces. Ambitious young people bring with
them innovations in art, science and business. William Johnston observes that the majority
of great Viennese pioneers had been born outside of Vienna. In the case of Austria-Hungary,
the eagerness of the provincial newcomer was compounded by the motivation of the Jewish
upstart, who for the first time ever had the opportunity to integrate himself into a cosmopolitan
Society. Art and science offered opportunities for social mobility that Jews enjoyed in no
other area. Business, the press, literature and theatre, music and opera, and the sciences
became the great vehicles for the integration of secular Jews.
Heinrich Gretz reports that the first cautious steps to a Jewish integration into Viennese
social life were undertaken when Fanny Itzik, a Jewish woman from Berlin, that is from the
The Mendelssohn Circle moved to Vienna in the 1780s and opened a brilliant salon.
By the 1890s, the Jewish impact on Viennese culture could not be overlooked. William Johnston
remarks that at the turn of the century, when the Jewish population represented less than
nine per cent of Vienna, it was responsible for almost half of the overall artistic and
and Scientific Achievement. This overwhelming success was due in part to the absence of
a ghetto mentality among the new immigrants. The Jews from Arabia, Bohemia and Galicia
had been living for centuries under an oppressive, rabbinical order, but they had not yet experienced
any similar constraints in their dealings with Gentiles.
In contrast to German cities like Frankfurt and Berlin, which had long had a Jewish settlement,
Vienna first attracted Jews in large numbers after 1848. They came from small villages
in Bohemia, Moravia and Galicia, where Jewish culture had been preserved in relative isolation
for hundreds of years. These were Jews who had lived in the countryside. In Bohemia some
of them had been farmers and few had been touched by city life. They had been small
merchants, often trading between towns or providing financial services to gentile landowners.
Gentisemitism had been rare in these regions because the Jews provided services that the
gentile lords and peasants wanted but would not perform themselves. The economic complementarity
of the countryside had guaranteed the Jews security and modest prosperity. The Jewish
families who moved to Vienna from the eastern provinces formed the nucleus of a new progressive
and Liberal Society. Vienna offered them the best schools in the world and equally unique
cultural facilities, and the cosmopolitan atmosphere of the country's largest city
offered progressive Jews the prospect of escaping the narrow confines of a life directed by
the traditional precepts of their religion. The leading organ of this liberal Jewish immigrant
community was the Neue Freie Presse, which relied on the financial backing of the credit
Anstaltbank, the Austrian flagship of the House of Rothschild. The paper took an increasingly
pro-German and anti-Slav stand. Under its mentor and editor Moritz Benedikt, 1849-1920,
it fanned anti-Slav feelings among Austro-Germans, it lauded the post-1880 alliance with Germany,
and in 1914 positively welcomed war as an ally of Wilhelm II. The Neue Freie Presse
Professor resembled the liberal bourgeoisie who read it. Exquisite taste in culture, accompanied
by naïveté in politics.
Although the Miseses were more conservative than most other Jewish families in Vienna,
Artur was a board member of the Vienna Jewish cultural community, and Adele was very religious.
Ludwig grew up in an atmosphere that tended to equate progress and secularisation, where
Where prophets and saints were increasingly replaced by the inventors of engines and the
heroes of philosophy, art and science.
What Schoska says about Theodor Herzl, the founder of the Zionist movement, also applies
to Ludwig von Mises. When Theodor was born in 1860, his family was well out of the ghetto
— economically established, religiously enlightened, politically liberal and culturally
Germany. Their Judaism amounted to little more than what Theodor Gompatz, the assimilated
Jewish classicist, liked to call un plus souvenir de famille. Shorska's parents even liked
to call his bar mitzvah his confirmation. For young Mises, the transformation of Vienna
through the exploits of science and technology was a continual process of never-ending improvements.
When he arrived in the city as a young boy, the liberal governments had already put their
stamp on the streets and architecture. Everything was new. Everything breathed the spirit of
the time. As a young man, Ludwig saw gas lamps replaced by electric lighting, horse and carriage
by motorised vehicles, the daily excursion to the public water fountain by new plumbing
systems. He saw telephone lines installed throughout the city, and eventually saw airplanes
taking off and landing in Vienna. The famous writer Stefan Zweig, one of Mises's contemporaries,
claimed that the same progress seemed to manifest itself in social and political matters, for
example, in the extension of suffrage and in pro-labour legislation. The new urban middle
class came to believe that all social and political problems would disappear in due
New Course, Conflicts between ethnic and religious groups would vanish, and mankind would eventually
reach the state of universal brotherhood.
Zweig was born in the same year as Mises, 1881, and also was a Jewish intellectual whose
family had settled in Vienna only recently.
Zweig's testimony is therefore representative of experiences and sentiments of the milieu
in which Mises spent his childhood.
It was no accident that the overwhelming majority of the Jewish immigrants to Vienna were liberals.
Happy to have escaped the religious and moral constraints of their rural hometowns, they
tended to oppose the limitations of their new environment as well. This concerned not
only the political order, which officially privileged Catholics of German ethnicity,
but also the social role of the Catholic Church, whose prominence painfully reminded them of
and the rabbinical order at home. Two issues united Jewish and gentile liberals – opposition
to the Church and the fight against censorship. The latter had survived from the times of
Funds I, who after the Napoleonic Wars had turned Austria and Vienna in particular into
a police state that sought to monitor all the intellectual activities of its citizens.
These spies infiltrated the cafes and theatres, and concertos acted as informers. Foreign
books had to be approved before they could be released on the Austrian market, and many
foreign authors were prohibited. Newspapers were monitored as a matter of course, and
even theatrical productions needed the authorities' prior approval. Newspaper censorship continued
in force until after 1900. When the Mises family moved to Vienna in the 1880s, the stringency
of the censorship laws had already faded under the impact of the liberal 1848 revolution,
but the effects of the old laws on the Viennese mentality remained. Traditional city dwellers
were reluctant to pursue what were possibly unbecoming innovations in business, science
and art. They were educated men and women of good taste and manners, but they lacked
the initiative and drive necessary to realise projects against the resistance of a conformist
Why had France's police state tamed the Viennese more than the provincials? Johnston gives
this explanation. Vienna suffered far more harshly from censorship and police surveillance
than any other region of the Habsburg Empire. In the days before the electric telegraph
and the Railroad, it was nearly impossible to harass a hinterland as effectively as a
capital city. At no other time since Maria Theresa's centralised Austrian administration
did the provinces compete so successfully with the capital in cultural prominence as during
the Biedermeyer period. These men cared far less about social disapproval than the old
Viennese. Their rugged individualism transformed Vienna and Western culture in the course of
Academician's Gymnasium In September 1892, shortly before his eleventh
birthday, Mises entered the Academician's Gymnasium, where he would be schooled for
the next eight years. The gymnasium schools were very particular institutions, more demanding
and quite dissimilar from their present-day successes. A product of the nineteenth-century
Continental System of Education, they can best be described as a combination of high
school and college. The children of ambitious and well-to-do parents began attending around
the age of ten after four years of elementary training. Three gymnasium models were available,
a classical model featuring eight years of Latin and six of Greek, a semi-classical with
Latin and one or two modern languages, and a thoroughly modern option with only modern
Ideas, Eric von Künfeld-Ledin states that the classical model had more prestige than
the others, but they were all demanding. He writes, Often these very hard school years
hung like a black cloud over families. Failure in just one subject required repetition of
a whole year. This was the fate of Nietzsche, of Albert Einstein, and also of Friedrich
August von Hayek. Young Mises, of course, got a classical education, the modern languages
he learned privately. While at the Akademischen Gymnasium, Mises read Caesar, Livy, Ovid,
Sallust, Jugurta, Cicero, Virgil and Tacitus in Latin. In Greek he studied Xenophon, Homer,
Herodotus, Demosthenes, Plato and Sophocles. One verse from Virgil so deeply impressed
him that it became his maxim for a lifetime, tu ne sede malis, set contra audensiorito,
do not give in to evil, but proceed ever more boldly against it.
Many years later he pointed out the crucial role that the immersion in classical literature
and the writings of the ancient Greeks in particular played for the emergence of liberal
Social Philosophy, and thus in his own intellectual development.
Mises It was the political literature of the ancient
Greeks that begot the idea of the Monarchal Acts, the philosophy of the Whigs, the doctrines
of Althusius, Grotius and John Locke, and the ideology of the fathers of modern constitutions
and bills of rights. It was the classical studies, the essential feature of a liberal
School Education that kept awake the spirit of freedom in the England of the Stuarts,
in the France of the Bourbons, and in Italy, subject to the despotism of a galaxy of princes.
No less a man than Bismarck, among the nineteenth-century statesmen next to Metternich, the foremost
foe of liberty, bears witness to the fact that, even in the Prussia of Frederick William
III, the gymnasium, the education based on Greek and Roman literature, was a stronghold
of Republicanism. Mises argued, The liberty which the Greek statesmen, philosophers and
historians glorified as the most precious good of man, was a privilege reserved to a
minority. In denying it to medics and slaves, they virtually advocated the despotic rule
of a hereditary caste of oligarchs. Yet it would be a grave error to dismiss their hymns
to Liberty as Mandacious. They were no less sincere in their praise and quest of freedom
than were, two thousand years later, the slaveholders among the signers of the American Declaration
of Independence. And he went on, The passionate endeavours to eliminate the classical studies
from the curriculum of the liberal education, and thus, virtually to destroy its very character,
were one of the major manifestations of the revival of the servile ideology.
For a diametrically opposed assessment of the relationship between classical literature
and liberty, see Frederic Bastiat in his work Baccalaurea et Socialisme. Bastiat argues in
particular that the classics have bequeathed to us the notion that society is a purely
conventional construct, as well as the idea that legislation could fabricate society according
According to Just Any Design
The Austrian schools had been reformed in 1851 at the beginning of the absolutist phase
of Franz Josef Rhein. Under the leadership of Count Leo Thun von Hornstein, the government
seized control of secondary education, which had been the exclusive domain of the Catholic
Church, and imposed a new curriculum that was meant to prepare the graduates for scientific
studies and executive positions within the Austrian bureaucracy. The teaching of religion
had become compulsory in 1869. Children had to have four years of elementary school, which
prepared them to be good subjects of the state before they could enter a secondary
school. The gymnasium taught the humanities to the future elite of the country. Only about
5% of an age group was admitted. This number tells more about the nature of the gymnasium
than any description of its curricula. To be admitted to a gymnasium was to be part
of a tiny intellectual elite. It meant learning from teachers who were respectfully called
about Herr Professor, and who were in fact the peers of today's college and university
professors rather than of today's high school teachers. Positions at the universities were
extremely rare, and it meant being measured by standards that were incomparably higher
than those of modern high schools. Being among the best students did not guarantee a place
in the gymnasium. Tuition was high and outside assistance was rare. Only one of Mises' classmates
Mises had such assistants, but because the schools competed for the best pupils, they
often waived the fees for exceptional young men who could not afford them, about 20% of
the pupils in Mises's class. The typical gymnasium pupil was the intelligent
son of middle-class or wealthy parents. Pupils with a working-class background were in exception.
While the gymnasium was the best type of school, the various gymnasium were not equal in quality
or Reputation. The best schools were in Vienna, both in terms of the family background of
the pupils and of the quality of the professors. The latter were often published scholars who
actively engaged in research and made important contributions in their fields. For example,
Ludwig's Latin teacher, Dr. Valentin Hintner, was a member of the Royal Prussian Academy
of the Socially Beneficial Sciences in Erfurt. In Vienna, three schools stood above the rest,
The Theresianum, the Schottengymnasium and the Akademische Gymnasium. These were all
male schools. Viennagos were taught in separate gymnasium, yet they could take the graduation
exam in one of the top schools.
Empress Maria Theresa had created the Theresianum in the mid-1700s as a Knights Academy, a school
to prepare young aristocrats for future responsibilities as administrative and political leaders of
and the Empire. In Mises' day, it remained a school for the sons of the high aristocracy
and admitted bourgeois pupils only as day students. Among the latter were Karl Lüger,
who eventually became the first non-liberal mayor of Vienna, Rudolf Hilferding and Josef
Schumpeter. There were, however, many families who abhorred the snobbish atmosphere of the
Theresianum and preferred other schools, such as the Benediktine-Schotten-Gymnasium and
The Akademische Gymnasium The Akademische Gymnasium was the most thoroughly
secularised secondary school in Vienna. It was therefore the favourite place of education
for the sons of the liberal bourgeoisie and in particular of Vienna's better Jewish families.
In Ludwig's terminal class, nineteen out of thirty-five pupils were Jewish, thirteen
Catholic and two Protestant. The school had been established in 1453. Today it is located
on Beethovenplatz, near the Eastern Ringstrasse. The tall neo-Gothic building was constructed
in the 1860s, with romantic towers and high windows on ivied brick walls. This is where
Ludwig spent the next eight years. His weekly schedule in the first year, religion, two
hours, Latin, eight hours, German, four hours, geography, three hours, mathematics, three
3 hours, natural history 2 hours, calligraphy 1 hour. By and large, the same subjects were
taught throughout the entire 8-year programme. The only major exception was Greek, which
was taught starting in the third year. Mises was one of the best students, although not
at the very top. The only class where he truly excelled was history, and he eventually graduated
sixth out of 33 pupils. The pupils were, however, somewhat disenchanted with their school, because
because of the dour indifference of their teachers. Before the 1851 liberal education
reform under Thun Hohenstein, the Austrian schools had been run by Catholic clerics.
Accordingly, classroom instruction featured mainly church history and filosofia perennis.
After the reform, civil servants replaced the clerics. These new secular professors
were entirely steeped in the traditions and mentality of the Austrian bureaucracy and performed
in the classroom with the same detached attitude of other state bureaucrats. Their main interest
was not to educate students, but to present their material efficiently. Apart from the
insufficient motivation of the teachers, there was another reason for student dissatisfaction,
a reason that also explains the explosion of creative energies in Vienna that began
in the liberal era. The schools did not offer enough intellectual stimulation for the Jewish
Boys who came from families nurturing a long tradition of literacy and of careful and sustained
intellectual work. Then, as now, young students endured school as a routine. It was not where
they found their interests or passions, but while students today might look forward to
sports or movies after school, their Viennese counterparts at the end of the 19th century
looked forward to reading and writing what was not taught in school, in other words,
to their real educations. In school, a fourteen-year-old would read the Latin and Greek classics.
He stuffed his brain with the minutiae of German and European history, and he did so
without enthusiasm. But after school he would devour modern writings on science and the
arts. Why did these Viennese boys have such a different notion of having a good time from
virtually all other generations and virtually all other places? The answer is, in brief,
Traditionalist Jewish culture let loose in a secular environment.
William Johnston observed, Jews had enjoyed many centuries of literacy before the rest
of Europe started to become literate in the eighteenth century. Thereafter, Jews entered
as if by predestination into professions that required facility with words. The true passion
of these young men who came from families that just a generation before had left the
The rural rabbinical order was intellectual adventure in the secular realm, a pursuit
unavailable to their ancestors. They threw themselves into literature, theatre, opera,
whatever aroused their curiosity. Raised to value religious scholarship, they found in
Vienna the intellectual delights of the secular world.
Ludwig von Mises seems to have been a typical specimen of this generation. He recalled that
But his interest in history was peaked in 1888, when he read articles in a family journal
on the lives of the German kaisers Wilhelm I and Friedrich III, who had died that year.
He was then barely seven years old. According to his wife, he set out to write a history
of the Crimean War when he was ten. After writing his first page, however, he abandoned
the project when he discovered that an English historian had published ten volumes on the
topic. During his gymnasium years he devoured the writings of the German historians, justifying
the new Prussian supremacy in German lands. These readings provided a lifelong lesson.
He realised that the acclaimed authors were in fact writing with a distinct bias. In his
Erinnerungen he states, As an Austrian it was not difficult for me to realise the overtones
of these writers, and I soon discerned the method of their analysis, which had rudely
The Forcification of History
Thus, early on, he trained the critical mind that would serve him so well throughout his
life and eventually turn him into the twentieth century's greatest intellectual champion
of liberty. One of the few surviving photographs from his youth seems to forebode these events.
Lew Rockwell comments,
I often think back to a photograph of Mises when he was a young boy of perhaps twelve
Standing with his father. He was wearing the traditional Austrian garb popular in the 1890s
and holding a racket for sports. The picture was grainy and distant, and yet you sensed
that there was something in Mises' eyes, a certain determination and intellectual fire,
even at such a young age. His eyes seemed knowing, as if he were already preparing himself
for what he might face. We look and try to discern what it was about him that caused
caused him to be such a fighter that caused him to stand while others fell, that gave
him that sense of moral certitude to fight for enduring truths, regardless of the political
winds. Even in that grainy photograph we have some sense that we see it in his eyes, that
glimmer that reflects a heart that would never compromise with despotism, but rather advance
the truth of human freedom until his last breath.
These things appear clearer today than they were at the time.
Ludwig's passionate interest in the sciences was typical for boys of his background and
generation. So was his enthusiasm for the arts. We must imagine him as a teenager standing
in line before premieres at the Hofburgtheater or Volkstheater. After school he would meet
friends such as Hans Kelsen at a café to read journals and discuss their discoveries.
The lives of Mises and Kelsen bear many surprising parallels that make this friendship particularly
interesting. They were born in the same year and attended the same school. Later they would
enter the same department at the University of Vienna, prepare for a scholarly career
and publish their first major treatises shortly before World War I. Both became ardent defenders
of the notion that there is no such thing as a science of ethics, but that all judgments
of Value are merely subjective.
While Mises would become famous for his studies of a priori laws in economics, Kelsen became
a pioneer of the pure theory of law. Also, both would marry women named Grete, move to
the United States at the advent of World War II, and eventually die in the same year, far
from Vienna. Mises in New York and Kelsen in California.
Kelsen's family background was lower than average academician gymnasium standards, while
Mises's was higher. Mises was the only aristocrat in his class. This did not prevent the ambitious
nobleman from befriending the ambitious son of a clerk and remaining his friend for a
lifetime.
It is likely that they became acquainted with the philosophy of Immanuel Kant, and especially
with Kant's epistemology at the same time when they were about sixteen years old. German
idealistic philosophy, the philosophy of Kant, Fichte, Hegel and their followers exercised
an enormous influence on many young minds in Vienna, not least of all because these
books had been on the Catholic index of forbidden works.
Kelsen was profoundly shaken by his confrontation with idealist philosophy. Through his reading
In his reading of Kant, Kelsen had come to the conclusion that the reality of the exterior
world was problematic. During the rest of his life he seems to have applied his early
subjectivist interpretation of Kant to the field of law. As an old man, Kelsen still
recalled his reading of Kant as a crucial juncture in his intellectual development.
The philosopher from Königsberg did not have the same impact on Mises. In distinct contrast
To Kelsen, Mises did not have a Kantian epiphany and then set out to reconstruct economic science
in the light of this idealist philosophy. Rather, Mises started from case studies and
moved up to ever-wider generalisations and greater abstractions.
Eventually he would realise that he could not avoid dealing with epistemological questions
and then stress the a priori nature of economic laws, but even at this point Kantian epistemology
did not have a noticeable impact on his thought. Many years later he had nothing favourable
to say about the neo-Cantean movement, in particular Cohn and Natob, which blossomed
at the turn of this century. He said it was an era of decline and neo-Canteanism was its
philosophical reflection. Mises's true primary interest was in political history and political
action. All the other disciplines he eventually came to master – law, economics, epistemology,
philosophy were subservient to these primary goals. In his final exam in German at the
Akademischen Gymnasium, he had to write an essay on the following question. What are
the moral inspirations that we derive from the study of the history of Austria? The written
part of the exam also included mathematics and geometry, requiring among other things
that he deliver a mathematical proof of a geometric theorem, as well as translations.
Mises had to translate from Latin into German, from German into Latin and from Greek into
German. Though his answer to, what are the moral inspirations that we derive from the
study of the history of Austria, is lost, a statement that he made many years later
gives us a hint as to what he might have written in May 1900.
Speaking of the benefits of studying history, Mises wrote, It opens the mind toward an understanding
Building of Human Nature and Destiny. It increases wisdom. It is the very essence of that much
misinterpreted concept, a liberal education. It is the foremost approach to humanism, the
law of the specifically human concerns that distinguish man from other living beings.
Personal culture is more than mere familiarity with the present state of science, technology
and civic affairs. It is more than acquaintance with books and paintings and the experience
of travel and of visits to museums. It is the assimilation of the ideas that roused
mankind from the inert routine of a merely animal existence to a life of reasoning and
speculating. It is the individual's effort to humanise himself by partaking in the tradition
of all the best that earlier generations have bequeathed.
The complicated political history of Austria was certainly interesting enough to attract
the attention of a bright teenager. In fact, much of Mises' later work can be seen as
an attempt to understand the problems of his age from the point of view of economic theory
and social philosophy. But even more fundamentally, he was interested in practical questions.
What could governments do to make their country a better place? Mises was never interested
in merely collecting historical data. He wanted to explain history, to trace, observe events
back to their causes and he wanted to apply these insights in practice. How did the political
and social institutions of his fatherland come into being? What were the causes of ethnic
and social strife and how could one combat them? What were the roots of imperialism?
What were the causes of the great social progress of the 19th century in rising literacy, declining
infant mortality and higher mass consumption? All these questions and their answers were
The preliminaries to action. Given our knowledge about causes and effects in social life, what
is to be done now? For example, how could one promote the welfare of the working classes
now more than in the past decades? A family tradition of commerce and social leadership
had made young Mises used to seeing and seeking the bottom line. He brought this emphasis
on results to the study of social life and social strife, which prepared him, as he would
Say, to take an active part in the great issues of his age.
Thus, he turned to the study of intellectual disciplines that promised to give guidance
in political matters, and because the conflicts of his era and ours were largely economic
ones, Mises ultimately became an economist. Many years later, he wrote these lines.
All the political antagonisms and conflicts of our age turn on economic issues. It has
has not always been so. In the 16th and 17th century, the controversies that split the
peoples of Western civilisation into feuding parties were religious. Protestantism stood
against Catholicism, and within the Protestant camp, various interpretations of the Gospels
begot discourse. In the 18th century and in a great part of the 19th century, constitutional
conflicts prevailed in politics. The principles of royal absolutism and oligarchic government
resisted by liberalism in the classical European meaning of the term that advocated representative
government. In those days a man who wanted to take an active part in the great issues
of his age had to study seriously the matters of these controversies. Only boers neglected
to inform themselves about the great problems that agitated the minds of their contemporaries.
In our age the conflict between economic freedom as represented in the market economy and totalitarian
In government omnipotence, as realized by socialism, is the paramount matter. All political
controversies refer to these economic problems. Only the study of economics can tell a man
what all these conflicts mean. Nothing can be known about such matters as inflation,
economic crises, unemployment, unionism, protectionism, taxation, economic controls, and all similar
are issues that does not involve and presuppose economic analysis.
A man who talks about these problems without having acquainted himself with the fundamental
ideas of economic theory is simply a babbler who parrot-like repeats what he has picked
up incidentally from other fellows who are not better informed than he himself. A citizen
who casts his ballot without having to the best of his ability studied as much economics
Conflicts as he can, fails in his civic duties. Economic conflicts were at the forefront of
social dissension in Austria-Hungary during Mises' early years, and were debated each
day in the press, in new books, in cafés and in the streets. Let us look more closely,
then, at the fundamental political problems of Fein der Zirke Austria.
Austria-Hungary Austria-Hungary as a political entity came
came into being after the defeat of the older Austrian Empire in 1866 by the Prussian armies
at the Bohemian town of König-Gretz. The conflict with Prussia was over supremacy within
the Germanys. The military defeat settled the question in favour of Prussia, but the
Habsburg family did not abandon its plans to regain its traditional position of leadership.
The greatest problem for the Habsburgs' ambitions in the age of the nation-state was
that their empire was not predominantly German. The Hungarian population was approximately
the same size as the Austro-German population, and the empire contained several million each
of Czechs, Poles, Romanians and Ruthenians, as well as a handful of smaller nationalities.
In the eyes of the liberals, in those days the strongest political force in the Germanys,
this hodgepodge of nationalities disqualified the Habsburg family from leadership of the
After the defeat in the 1859 Italian campaign, various Austrian governments sought ways to
make the empire more German and more liberal to emulate the idea of a liberal nation-state.
A constitutional reform in February 1861 under Prime Minister Schmirling addressed the nationalities
problem through the introduction of estate parliaments, Kurienparlamente. The idea was
is to use parliamentary representation as a means to settle political conflicts between
different ethnicities and different social classes without resorting to the nefarious
one-man, one-vote principle. The Constitution guaranteed a majority of seats to the political
and economic establishment. Primarily it guaranteed the ethnic Germans and their allies a majority
of seats, even where they were in the numerical minority. The Schmerling Constitution tried
trying to make up for Austria's lack of German character, but with the military defeat
at the hands of Prussia, a more pressing problem suddenly appeared, separatism. The Habsburgs
felt they had to secure their power base by finding a way to guarantee the continued loyalty
of the Hungarians. This was done in the so-called Ausgleich, settlement, that was hurriedly
crafted and ratified within weeks after Königgräts. The Austrian Reichsrat voted a new constitution
on December 21, 1867 The Asgleich established the principle of
political dualism in Habsburg lands, the subdivision of the empire into two spheres of influence,
one under German rule, the other Hungarian. The Asgleich granted far-reaching autonomy
to the Hungarian gentry and made them de facto rulers over other peoples within the confines
of Hungary. This concerned in particular Slovaks and Romanians. The Kingdom of Croatia and
and Slavonia was also part of Hungary, but it was relatively autonomous.
In exchange, the Hungarian establishment did not contest German hegemony in the other lands
of the Empire and they consented to the continued existence of a common dynasty, a common foreign
policy and a common army. The Ausgleich also guaranteed the economic unity of the Empire.
From its very inception, however, the Ausgleich was prevented from securing internal peace
because its stipulations were interpreted in fundamentally different ways.
In the eyes of the German side, the Ausgleich was an agreement reached between the different
nations of the Empire which implied that the signatories from the very outset conceived
of themselves as part of a larger political entity. The Emperor was not one of the contracting
parties, rather he presided over the whole political entity and the contract was between
In contrast, the Hungarians saw the Ausgleich as a bilateral affair between themselves and
the King of Hungary, who also happened to be the ruler of Austria and various other
foreign countries. It was only incidental that the agreement with their monarch was
mirrored by a parallel agreement between the Austrians and their emperor. In short, the
Hungarians considered themselves a sovereign nation on its way to full autonomy, and the
The Ausgleich merely one step on this path. They were pressing these demands on their
legal representative, the King of Hungary. The King was of course Franz Josef himself.
For this reason alone the Ausgleich failed miserably in providing a basis for the continued
peaceful coexistence of the various Austrian nations, and thus for Habsburg power. Year
after year the Hungarians presented new claims and reached new compromises at the cost of
and the rest of the Empire. German-Austrians interpreted these ever-increasing demands
as political extortion. They despaired over the disputatious behaviour of the Hungarians,
which undermined the very existence of the Empire, but the Hungarian campaign did not
suffer the slightest trace of remorse, and it steadily gained ground. How successful
it was can be inferred from its impact on political language. The words Austria and
and Reich were increasingly abandoned to suit Hungarian-style political correctness. Common
institutions of the Empire were no longer called by the prefix Reich as in Reichskriegsminister,
but by the prefix KUK, kaiserlich und königlich, imperial and royal, thus KUK Kriegsminister.
By contrast, Hungarian state institutions were prefixed with K as in kingly, referring to
to the Hungarian Crown and the state institutions of the other non-Hungarian territories which
shared a common parliament under German supremacy, the Reichsrat, were prefixed with KK, Imperial
Royal. Curiously, these other territories did not even have a common name. They were
only the kingdoms and lands represented in the Reichsrat.
In a great satire on this abbreviation orgy, Robert Musil, in his famous fernesiaque novel
The Man Without Qualities, called the country of his hero, Cacanian, Cacaland, and said
it was the only country that declined for lack of a name.
The Ausgleich also provoked resistance from others, most notably from the Croats and the
Czechs. Support for the Ausgleich came from the Poles and the Italians. Both nations were
Both settled predominantly in areas where they had the economic and political power,
but were numerically inferior to other local nations, Ruthenians, Southern Slavs.
Both saw the Ausgleich correctly as a scheme to perpetuate the current political privileges of Germans and Hungarians.
The Czech radicals, calling themselves the Young Czechs, became famous for their ruthlessness in adopting the Hungarian strategy.
Their representatives boycotted the sessions of the Reichsrat, the parliament of the Austrian half of the Empire, and claimed to be one sovereign nation, which would deal only with its own King of Bohemia, who happened also to be the Emperor, and they would do so only to secure more liberties for the Czechs.
The ultimate effect of the Ausgleich was to alienate step-by-step all nations from the Empire.
A radical element in each nation increasingly refused to perceive themselves as part of a larger whole.
They considered disputes with other nations of the Habsburg crowned to be matters of their own foreign policy that did not involve the Empire or the monarchy.
This tendency was reinforced in a fateful way when, in 1878, the southern Slav lands of
Bosnia and Herzegovina fell under the dominion of Austria-Hungary. This was one of the stipulations
of an agreement of seven governments at a congress in Berlin in August 1878. The Berlin
congress dealt with territorial questions in south-eastern Europe and the Middle East.
It was prompted by a crushing Russian victory over Turkey, and signed by these two states
as well as by the governments of Austria, Hungary, Germany, France, England and Italy.
Rather than granting autonomous status to the new territories, the Hungarians immediately
claimed the right to rule them, arguing that at some point in the distant past they had
been conquered by a Hungarian king. Bosnia-Herzegovina therefore came under the co-dominion of Hungary
and the kingdoms and lands represented in the Reichsrat. Over the next 30 years this
This divided rule from Vienna and Budapest created fertile ground for Southern Slav nationalism
and Serb agitation. It was a major factor in the events that eventually precipitated
the world into the Great War and destroyed the Austrian monarchy.
Following the Hungarian strategy, the radicals of all nations eventually refused to deal
with any other nation at all. The central government in Vienna made concessions concerning
and the use of language in the local branch offices of its bureaucracy. And so, around
the year 1900, German, Hungarian, Italian, Czech, Polish and Serbo-Croatian were all
in official use. But such concessions could not satisfy the aspirations of the radical.
At the turn of the century many Italians, Czechs, Slovaks, Poles, Ukrainians, Magyars,
Romanians, Serbs, Croats and Slovenes strove for national independence. They insisted on
and the sovereign status of their ethnic group, and argued that matters of domestic policy
existed only insofar as they pertained to their relationship with the local monarch.
The greatest problem of this stance was that the traditional political territories, the
kingdoms and lands, did not have nationally homogenous populations. Except for some of
the alpine regions, all these traditional territories hosted at least two nationalities,
and more.
Von Joseph slipped more and more into the impossible situation of being the sole embodiment
of a political entity scorned by millions of his subjects, the Empire.
He was still acceptable as a political partner, but only in his capacity as a king, that is,
as King of Bohemia, King of Hungary, King of Croatia, etc.
In the minds of his subjects, the monarch was the only element that tied together the
The various lands and nations who felt no desire or no need to come to terms with one another.
One of Mises' fellow students recalled,
No more than three hundred meters separated the university from the parliament building in the Vienna Ringstrasse.
If the young people fought almost daily at the university,
the conflicts of the deputies were of equal violence,
and were battled with a fanatical passion unknown in other countries.
countries. If you went only a hundred steps further on from Parliament, you could see
every day and usually more often a carriage drawn by two horses drive out of the Hofburg.
In it sat the old Emperor and his equally elderly adjutant, and they would set out for
Schönbrunn at an easy trot, always at the same hour and always down the same street.
There was no security escort ahead or behind the carriage. No policeman sat in the vehicle
itself, any assassin would have had an easy job, but nobody took the opportunity.
The fellow student goes on to observe, The leaders of our modern great empires are driven
rapidly in bullet-proof cars, protected by countless bodyguards. Aristotle thus defined
the difference between a monarch and a tyrant. The monarch protects his people, the tyrant
has to protect himself from them.
Franz Josef, who had begun his reign as an arch-reactionary and gave his consent to constitutional
government only after two lost wars, eventually became the glorified, almost mystic embodiment
of a state that few of his subjects really desired. He presided over the radical transformation
of Austria that started after the revolution of 1848 and stretched until the very end of
of his reign in 1916, a transformation that left no sphere of social life untouched.
The contemporary witness, himself a democrat, born around the time Franz Joseph ascended
the throne, recalls the awe that the Emperor inspired in all his subjects. And the Kaiser
had lived through, in fact co-sponsored, truly monumental changes. The almost feudal landed
lordship, with its peasant subject to the estate, sleepy little towns with their handicrafts
organized in guild, a capital city with concentric walls and bastions, with large ramparts and
glaces, a society the ruling intellectual power of which was the church and the materially
moving power of which was still the stagecoach and the horse, all this formed the environment
of the beginning reign of Francis Joseph, which was to encounter so many material and
intellectual innovations.
Almost all laws that created or made possible landed property for citizens, free peasants
and country workers, handicrafts and industry, large-scale trade, railroads and steamship
transport and insurance and banking services were signed with his name. The tremendous
development of modern capitalism fell into the period of his reign and thereby the transformation
of the Absolutistic Patrimonial State into a Constitutional Monarchy, the rise of the
free citizenry, the flowering of the citizens' parliament, the cultural unfolding of all
nations of the Reich, along with the inevitable frictions of the maturing process and finally
the rise of the working class, the spreading of the social idea, and the beginnings of
social legislation.
Whoever met Francis Josef at my time felt the breadth of a long and grand period of
history that he has carried on. Seldom a single human life has encompassed such immensity.
But even those who had not inherited sentimental feelings for the Emperor could hardly fail
to perceive his pivotal role within Austria-Hungary's political system. Ludwig von Mises's contemporary
and fellow student, Felix Zumary, recalled his father telling him,
This empire is quite different from the rest of the world.
Imagine the emperor and his government gone for even one year, and the nationalists would
tear each other to pieces.
The government is the fence that separates the zoo of wild animals from the outside world,
and nowhere else are there so many and such dangerous political beasts as we have.
Young lads such as Felix learned early on to appreciate the benefits of the monarchial
order in Austria, understanding that the monarchy was not some historical relic, but the sole
possible institutional framework for holding eight nationalities together on Europe's
most dangerous frontier. It was to no avail.
Imitation of the Hungarian strategy mushroomed after 1867, and culminated in the late 1890s
German Prime Minister Count Bardeni saw to solve national conflicts between Germans and
Czechs through legislation that put the two languages on an equal footing within the Bohemian
government.
Ethnic Germans saw the ordinance as the last straw in an ongoing series of concessions
to the Czechs.
Bardeni was not prepared for the level of animosity the Germans of Bohemia and the rest
of the empire directed at him as a result of his legislation.
They began disrupting parliamentary proceedings and instigated violent protests. The Emperor,
frightened by the mass agitation of some of the most important segments of society, dismissed
by Dany in November 1897.
Socialism Austrian Style
The national conflicts within the Empire were compounded by social conflicts resulting directly
The liberalisation of trade, transport, banking and industry had completely transformed the
Austrian economy, undermining the social and political position of the old elites.
The aristocracy and clergy despised the emerging coterie of capitalist upstarts, and in their
political rearguard action against liberalism and capitalism, they allied themselves with
and the economic losers of the transformational process. The great number of people employed
in traditional forms of production, including small-scale farming and those handicrafts
that had become obsolete in an era of more efficient factory production. They were not
necessarily losers in the sense that their income had been reduced in absolute terms.
It was rather that their relative economic and social positions had deteriorated in comparison
and to those of their relatives, friends and neighbours who had found employment in the
new capitalist corporations. Petits bourgeois residents of fin de siècle
Vienna especially resented the success of the new Jewish middle and upper classes, which
most visibly represented the changes in Austrian society induced by the liberal reforms. There
had been virtually no Jewish residents in Vienna before 1848 because Jews were not allowed
to own land in the city or to stay longer than three days within its walls. Only about
two hundred distinguished Jewish families, such as Rothschilds, had obtained an exemption
from this policy. All others had to leave the city after three days and re-enter it
at another gate to obtain a new visa. As a consequence, Jews were virtually unknown to
the general population, and those who had actually met Jews in person remembered them
as impoverished Talmud students in Galicia and other rural regions of the empire.
Things changed radically in the wake of the revolution of 1848, when the restrictions
on Jewish real estate ownership were abolished. By 1857 about 7,000 Jews had settled in Vienna.
This was the beginning of a great wave of Jewish middle and upper class immigration.
Starting in the 1860s, well-to-do Jewish families flocked into the capital. By the turn of the
In the century there were 145,000 Jews in Vienna. By 1910 it was 175,000. Only Warsaw
hosted a larger Jewish population. In a city as small as Vienna it was now impossible to
overlook the Jewish presence. The new wealthy Jewish residents clearly outnumbered the Catholic
Nouveau-Riche. For traditional city dwellers, liberalism, capitalism and Jews were all alien
and intruders. These urban masses in Vienna were easy prey to the old elites where they
began to organise a political backlash against the capitalist movement. Two parties were particularly
effective, the German Nationalists and the Christian Socialists. As a schoolboy, Ludwig
von Mises witnessed first-hand the rise of the Christian Social Party in Vienna. In 1882
the Vienna election law had been modified to extend suffrage to lower income groups.
These voters eventually secured the sweeping victory of the Christian Socialists under Carl
Luger in the communal elections of 1895. Luger, commonly called Handsome Carl, their Schöne
Carl, was the incarnation of the modern politician. He knew how to flatter the man on the street.
He did not count on winning by argument, but relied entirely on appeals to voters' feelings,
fears and resentments. Although he had risen from lower-class origins in the liberal age,
and harboured no personal ill-will to a Jew, he built his election campaign squarely on anti-capitalism and anti-semitism.
The emperor despised Luger's anti-semitic tactics and refused to appoint him mayor of Vienna,
but after three consecutive election victories Franz Joseph eventually gave in and Hanson Carl became mayor on April 20, 1897.
Luger immediately proceeded to enlarge his power base by incorporating many suburbs into
the city of Vienna. After the incorporation had been completed in 1902, Vienna became
a secure dominion of the Christian Social Party. It would remain so until the end of
World War I, when the Red Socialists won the majority in the city and started one of the
greatest experiments in communal socialism ever, turning the capital of Austria into
Red Vienna.
Like the Christian socialists and the German nationalists, the socialist movement was ultimately
an offshoot of the liberal transformation of Austria-Hungary. But whereas the former
groups resisted this transformation, the socialists were carried along with it, and its leaders
were quite conscious of the irony, or as they would say, dialectics, that they were children
of the capitalist revolution. They were spoiled brats bound for patricide, praising the economic
Socialism and Capitalism were but two faces of the same radical and rapid transformation
of the economy, society and politics. For this very reason both of them lent themselves
to the integration of Jewish elites into leadership positions. Just as capitalism enabled a greater
number of Jewish entrepreneurs, statesmen and intellectuals such as David Ricardo, Disraeli
and Ludwig Bumberger to rise to wealth and influence. So the socialist movement was a
predominantly Jewish movement at the leadership level. La Salle and Luxembourg in Germany,
as well as Kautzky-Bauer and the Adlers in Austria, were all of Jewish origin. In short,
liberalism had paved the way for freely experimenting with new modes of production, and thus led
to the emergence of the factory system.
With the large factories came many Jewish capitalists and a proletariat with a Jewish
leadership. Georg Franz has argued that the rising Austro-Jewish establishment was instrumental
in promoting a homegrown brand of classical liberal doctrine. In contrast, the new urban
proletariat was a largely non-Jewish group without traditions. It therefore lacked social
and political institutions and quite naturally became fair game for politicians and political
movements, all parties tried to mobilize the new urban masses for their causes, and until
the 1880s the German nationalists and the Christian socialists had the upper hand in
this endeavour. Things changed only when the socialists triumphed in German elections.
Their popularity extended to the Austrian proletariat, winning many over to the socialist
cause, but not all of them.
When handsome Karl made anti-Semitic slurs at election rallies, he knew what he was doing.
It was the one sure way to lure voters away from both the liberals and the socialists.
Like all social democratic parties in Central Europe, the Austrian organisation was entirely
under the sway of Karl Marx's doctrines.
Marx had reconstructed the theory of socialism in a way that made it especially appealing
to the urban proletarian masses.
In his account, the proletariat was the social class that embodied the future of socialism.
Liberalism and capitalism, Marx argued, were merely an intermediate phase of social evolution.
Their main function was to give birth to the proletariat and then to impoverish it, thus
inciting the working masses to the final revolution which would create a classless society and
bring about the end of history.
By the time twelve-year-old Mises had completed his first year of school in Vienna in 1893,
Marxism had already lost much respect and attraction. Twenty-five years had passed since
the first publication of Das Kapital, and events had clearly refuted Marx's predictions
about capitalism's propensity to create misery among the working classes. The uncomfortable
evidence induced a split among socialist intellectual leaders. Edvard Bernstein criticized Marxism
and proposed a revised theory of socialism. He recognised the ability of capitalism to
improve the material lot of the proletariat. Rather than seeking to overhaul capitalism,
he argued socialists should strive to correct its flaws through democratically elected governments.
Bernsteinian revisionism was part of a more general effort to turn the socialist movement
away from its Marxist fixation on the violent overthrow of present social conditions.
Under the leadership of the Vienna doctor Viktor Adler and of the Marxist theoretician
Karl Kautsky, the Austrian Social Democrats gave a clear endorsement of the principles
of non-violence and legality in political struggle. Kautsky distinguished himself by
advocating a determinist brand of Marxism, that is, he believed that Marx had discovered
strict laws of social evolution. Capitalism necessarily led to Socialism and Communism,
and it was therefore devoid of sense to try to push things through violent overhaul. Norbert
Leys argued that Kautsky thereby exercised a nefarious influence on Austrian Socialism.
Kautsky's determinist views spread fatalism and paralysed the activities of socialist practitioners.
At the Heinfeldt Party Congress in 1888-89, which united the violence-prone ideological
radicals and the union-dominated moderates Adler and Koutsky, championed piecemeal social
reform through universal suffrage and parliamentary legislation, Marxist radicals in other countries
heaped ridicule on this affirmation of the legitimacy of the state and its organs, calling
and the approach of their moderate Austrian comrades K.K. Social Democracy.
German pronunciation of the letter K renders the epiphant identical to international slang
for excrement. But the new strategy was undeniably successful. During his school years, Mises
followed the progress of the social democratic agitation in favour of universal suffrage.
He left first-hand the conflicts he would later spend so much time analysing. His contemporary
It had been eighty-four years since the Congress of Vienna and both Europe and America basked
in the long peace and looked down on the Austrians as incompetent, immature, patiently enduring
a tyrant's yoke. The reality was quite different, for the big issues that were struggling over
in Austria had not been dealt with in other countries. On the contrary, they had not even
surfaced in those countries and were to do so only decades later. Nationalism, political
While anti-Semitism, even communism were already fighting issues with us, while in the rest
of the world the curious duality of liberalism and imperialism still held sway.
While all the rest in their smug peace and quiet looked down at the Austrian turmoil
as if at some curiosity, we young people felt ourselves at the very centre of political
events, for our world was far more real than the other. We didn't discuss, we fought,
not as outsiders imagined over the questions of the day before yesterday, but about those
of the day after tomorrow.
When in later decades the new barbarianism came flooding in, it surprised the West.
For us, it was a familiar phenomenon.
We had seen it churning with wild and uninterrupted turbulence at the heart of a highly developed
and refined civilization.
I say we, meaning the entire intellectual youth of Vienna at that time.
We stood at a decisive turning point in history and felt it in our innermost being.
Which Career As the nineteenth century drew to a close and
Ludwig reached the age of legal maturity, he took some time to consider the path that
day ahead. Austria-Hungary offered four career options for well-educated young men. These
were in order of their prestige, the military, public service, the liberal arts and commerce.
In liberal post-1848 Austria, industry and commerce were, with some exceptions, open
to anyone, even though they were often subject to countless regulations, remnants of the
pre-1848 police state. Activity in these fields attracted the educated young men of the bourgeoisie,
and entrepreneurial leadership was exercised by the most daring strata of the population,
including Jews who excelled as merchants, bankers and insurers. The liberal economy
had given these entrepreneurs great opportunities to serve their fellow citizens and thereby
earn great fortunes for themselves. They usually started in a province of the Empire and then
expanded to all of Austria-Hungary and sometimes to an international scale. Once they reached
this size, they transferred company headquarters and moved their families to Vienna. However,
the great majority of the sons of provincial engineers and entrepreneurs did not aspire
to follow in the footsteps of their fathers. Encouraged by their parents and with the constant
personal support of their mothers, they sought to become lawyers, physicians, scientists,
artists, public servants or politicians. Young Ludwig was no exception. His father's example
had inspired him with respect for the civil service and with a desire to use his energies
to the benefit of the commonwealth. Philosophy, politics and history were more attractive
to him than the old trades of his family. He decided to study at the University of Vienna,
get a degree and seek employment in the civil service. He passed the final written exam
at the Akademischen Gymnasium in May 1900 and the Orals in mid-July of that year. In
the fall, together with his classmates Hans Kelsen and Eugen Engel, Mises enrolled in
the Department of Law and Government Science.
He was a handsome young man with blue eyes, 5 feet 8 and a half inches tall, 171 centimeters.
He came with a great education, a razor sharp mind and passion for ideas that could be applied
for social progress.
He was made for the university.