WEBVTT NOTE 22. Fragmentation of the Movement 1 00:00:00.000 --> 00:00:06.240 Chapter 22. Fragmentation of the Movement The emergence of the Austro-libertarian 2 00:00:06.240 --> 00:00:12.160 movement in America reached its high point in the year 1956. Ten years of continuous expansion 3 00:00:12.160 --> 00:00:19.280 ushered in a torrent of important publications and other breakthroughs. In 1955, Hans Zenholz published 4 00:00:19.280 --> 00:00:25.680 his first book. In early 1956, his wife Mary edited a fest schrift for Mises that documented 5 00:00:25.680 --> 00:00:30.800 The Austro-libertarian Network of Intellectuals. Mises himself published The Anti-Capitalisting 6 00:00:30.800 --> 00:00:36.640 Mentality and gave the opening address at the 1956 Mont Pelerin Society meeting in Berlin 7 00:00:36.640 --> 00:00:43.200 on the Permanent Inflation. Also in 1956, Murray Rothbard received his PhD in economics 8 00:00:43.200 --> 00:00:47.840 from Columbia University and Zen Holtz obtained his first position at Grove City College. 9 00:00:48.640 --> 00:00:53.440 1956 was also the year when Mises began to receive outward signs of recognition. 10 00:00:53.440 --> 00:01:19.360 In 1937, the Vienna Commerce saw to have Mises promoted to the rank of a Hofrat or courts 11 00:01:19.360 --> 00:01:24.120 Mises' counselor, the highest rank attainable for non-political appointees among the Austrian 12 00:01:24.120 --> 00:01:28.560 civil servants, but Hitler's takeover prevented this. Mises then had to wait until he was 13 00:01:28.560 --> 00:01:36.760 almost 75 to receive public recognition. In June 1956, he was accorded a $15,000 William 14 00:01:36.760 --> 00:01:42.000 Volcker Distinguished Service Award. A year later, he received an honorary doctorate from 15 00:01:42.000 --> 00:01:46.840 Grove City College and other honors followed over the next few years. The most lasting 16 00:01:46.840 --> 00:01:51.320 One sign of the veneration that Mises enjoyed in those days is the bronze bust that George 17 00:01:51.320 --> 00:01:55.380 Cota arranged to be made also in 1956. 18 00:01:55.380 --> 00:01:59.840 Recognition for lifetime achievement is usually accompanied by a winding down. 19 00:01:59.840 --> 00:02:04.700 So it was in the case of Mises and of the movement he inspired in the 1950s. 20 00:02:04.700 --> 00:02:08.740 In personal public appearances he began to feel his age. 21 00:02:08.740 --> 00:02:13.480 He had never been an orator but had always been impressive, especially in smaller settings, 22 00:02:13.480 --> 00:02:19.080 for his encompassing knowledge of the subject and for his lucid and systematic exposition. 23 00:02:19.080 --> 00:02:24.980 This flame shone for the last time at the Princeton Montpelerin Society meeting in 1958 24 00:02:24.980 --> 00:02:29.380 and in a series of lectures he gave in Buenos Aires in 1959. 25 00:02:29.380 --> 00:02:32.840 Thereafter his frailty weighed ever more heavily. 26 00:02:32.840 --> 00:02:37.600 Already in 1956-1957 he had not felt well for many months. 27 00:02:37.600 --> 00:02:41.660 In May at the end of the academic year he looked forward to spending a long vacation 28 00:02:41.660 --> 00:02:47.620 in Austria and Switzerland. He was increasingly hard of hearing and was soon unable to conduct 29 00:02:47.620 --> 00:02:51.980 seminar discussions without the assistance of Percy Graves. 30 00:02:51.980 --> 00:02:57.260 It was at this point that a strategic weakness of the burgeoning Austro-libertarian movement 31 00:02:57.260 --> 00:03:02.860 began to be felt quite painfully, the age gap. Between the almost octogenarian Mises 32 00:03:02.860 --> 00:03:07.820 and his major thirty-something disciples, Zenholz, Rothbard and Kirzner in particular, 33 00:03:07.820 --> 00:03:12.520 There was no intermediate generation to take leadership from Mises's faltering hands. 34 00:03:12.520 --> 00:03:17.560 Henry Hazlitt and Leonard Reed were the right age, but were thought of as mere popularizers 35 00:03:17.560 --> 00:03:19.460 of the ideas of others. 36 00:03:19.460 --> 00:03:24.160 They lacked the authority to lead what was, after all, an intellectual movement. 37 00:03:24.160 --> 00:03:28.940 Mary Zenholz had argued that Reed was underestimated as an intellectual figure. 38 00:03:28.940 --> 00:03:32.960 The libertarian movement now came under the influence of those who were already intellectual 39 00:03:32.960 --> 00:03:38.520 Authorities and in the prime age for leadership, but not really Misesians in the Austro-libertarian 40 00:03:38.520 --> 00:03:44.860 sense. By the early 1960s, Friedrich Hayek, Milton Friedman and Ayn Rand had acquired 41 00:03:44.860 --> 00:03:49.380 solid reputations as writers and were ready for national recognition as the leaders of 42 00:03:49.380 --> 00:03:55.880 an intellectual movement. It was due to their unrivaled impact that in the 1960s Austro-libertarianism 43 00:03:55.880 --> 00:04:01.780 came to be largely supplanted by other libertarian and conservative movements. The most visible 44 00:04:01.780 --> 00:04:05.460 Several signs of this paradigm shift were the displacement of the Freeman by National 45 00:04:05.460 --> 00:04:10.820 Review established in 1955, the takeover of the Mont Pelerin Society by Chicago School 46 00:04:10.820 --> 00:04:18.100 neoliberals in the 1960s, and the emergence of an organised Randian or Objectivist movement. 47 00:04:18.100 --> 00:04:22.900 All this occurred while American mass opinion was being converted to the gospel of interventionism 48 00:04:22.900 --> 00:04:27.220 and socialism. Mises must have been shocked about the results of a survey among American 49 00:04:27.220 --> 00:04:31.260 The high school seniors, as reported in a 1955 letter to the editor of the Wall Street 50 00:04:31.260 --> 00:04:37.540 Journal, asked about their attitudes toward free enterprise, 82% said they did not believe 51 00:04:37.540 --> 00:04:41.880 that there was business competition in the United States, 60% said owners received too 52 00:04:41.880 --> 00:04:48.860 much profit, 76% believed owners got most of the gains from new machinery, 55% championed 53 00:04:48.860 --> 00:04:55.440 the postulate from each according to ability to each according to needs, 61% rejected the 54 00:04:55.440 --> 00:05:00.420 The Profit Motive as the driving force of the economic system and 60% said workers should 55 00:05:00.420 --> 00:05:03.380 not produce all they could. 56 00:05:03.380 --> 00:05:07.040 Austro-libertarianism simmered on a low flame for the next two decades. 57 00:05:07.040 --> 00:05:11.940 It lingered as an underground movement centred around Hans-Zen Holtz, Murray Rothbard and 58 00:05:11.940 --> 00:05:17.060 starting in the 1970s, also around Israel Kirzner and Ludwig Lachmann. 59 00:05:17.060 --> 00:05:20.300 The movement was further weakened through internal strife. 60 00:05:20.300 --> 00:05:23.780 The most important disagreement concerned the anarchy question. 61 00:05:23.780 --> 00:05:28.360 This is a minimal state necessary to preserve a free society. 62 00:05:28.360 --> 00:05:33.680 The Rothbardian anarchists rejected the state entirely, claiming that its protection and 63 00:05:33.680 --> 00:05:37.800 contract enforcement functions were, like all other services, better served by free 64 00:05:37.800 --> 00:05:41.040 market competition than government monopoly. 65 00:05:41.040 --> 00:05:45.440 This stance cost them the support of the classical liberal groups around Leonard Reed and Hans 66 00:05:45.440 --> 00:05:50.200 Zenholz, who advocated minimal state or monarchist solutions. 67 00:05:50.200 --> 00:06:09.200 Yet, the coherence and radicalism of Rothbard's views attracted many of the brightest young minds, and when Austro-libertarianism re-emerged as a powerful intellectual force in the 1980s and 90s, with the Ludwig von Mises Institute at its epicentre, it did so under the intellectual leadership of Murray Rothbard. 68 00:06:09.200 --> 00:06:15.040 In the late 1950s and early 1960s, Mises witnessed the rise of an American conservative mass 69 00:06:15.040 --> 00:06:22.240 movement and of the neoliberal Chicago School within the Montpilerin Society. He saw some 70 00:06:22.240 --> 00:06:28.180 of his most promising students abandon their support for free enterprise. 71 00:06:28.180 --> 00:06:33.960 Conservative Movement and Libertarian Remnant By the mid-1950s, the Freeman had accomplished 72 00:06:33.960 --> 00:06:39.720 It's goal of rallying the disparate libertarian forces, the remnant, as Albert J. Nock would 73 00:06:39.720 --> 00:06:45.360 call them, yet its financial and organisational difficulties had opened the gates for another 74 00:06:45.360 --> 00:06:50.360 non-leftist periodical which would consolidate the forces on the American right from a far 75 00:06:50.360 --> 00:06:56.100 less libertarian point of view than the Freeman. National Review burst onto the American scene 76 00:06:56.100 --> 00:07:01.540 in the fall of 1955. Its driving force was the young editor-in-chief, William F. Buckley 77 00:07:01.540 --> 00:07:07.140 Buckley Jr. a Yale graduate with a strong anti-communist pedigree. During his studies 78 00:07:07.140 --> 00:07:12.100 he had gathered informational professors and fellow students for the FBI. Buckley absorbed 79 00:07:12.100 --> 00:07:16.760 the editorial talent that was unable to find a home at the Freeman, in particular Suzanne 80 00:07:16.760 --> 00:07:22.740 Lafollette and William Henry Chemlin, but also such men as Russell Kirk, Frank Meyer, 81 00:07:22.740 --> 00:07:28.440 Max Eastman and Erich von Kuhnelt-Lehlin. When Buckley announced National Review as 82 00:07:28.440 --> 00:07:34.680 Frankly conservative, old world men such as Mises must have thought that, frankly, Buckley 83 00:07:34.680 --> 00:07:40.120 did not know what he was talking about. Mises did contribute a few pieces in the course of the first 84 00:07:40.120 --> 00:07:45.720 few years of National Review's existence, but on more than one occasion he emphasised the difference 85 00:07:45.720 --> 00:07:52.440 between libertarianism and conservatism. In response to birthday greetings in 1957 he wrote, 86 00:07:52.440 --> 00:08:12.240 In October 1954, Mises declined an invitation from Yale University to participate in a series 87 00:08:12.240 --> 00:08:17.520 called Conservative Lectures, which was promoted with the promise that each lecturer will work 88 00:08:17.520 --> 00:08:22.120 consciously to a restoration of the power of the word conservative. 89 00:08:22.120 --> 00:08:26.560 He noted that the word conservative had no political roots in America, and that in Europe 90 00:08:26.560 --> 00:08:31.340 it meant the very opposite of the principles for which America stood. To conserve means 91 00:08:31.340 --> 00:08:38.360 to preserve what exists. It is an empty programme. It is merely negative, rejecting any change. 92 00:08:38.360 --> 00:08:43.500 To conserve what exists is in present-day America tantamount to preserving those laws 93 00:08:43.500 --> 00:08:49.900 and institutions that the New Deal and the Fair Deal have bequeathed to the nation. 94 00:08:49.900 --> 00:08:55.700 The sudden emergence of the word conservative highlighted a more general unease of the counter-revolutionary 95 00:08:55.700 --> 00:09:01.420 forces in the United States. They were quite sure what they were against – communism, 96 00:09:01.420 --> 00:09:08.280 fascism, socialism, the New Deal, the Fair Deal, etc. – but what did they stand for? 97 00:09:08.280 --> 00:09:13.260 The fact is that even in the leadership of the New Movement, economic knowledge and staunch 98 00:09:13.260 --> 00:09:19.780 libertarian convictions were rare. The recourse to words like conservatism reflected a widespread 99 00:09:19.780 --> 00:09:44.500 When Mises emphasized in the paper the crucial importance of an independent judicial apparatus 100 00:09:44.500 --> 00:09:49.660 that protects the individual and his property against any violator, whether king or common 101 00:09:49.660 --> 00:09:50.940 and Robber. 102 00:09:50.940 --> 00:09:56.580 The secretary of the Earhart Foundation wondered whether this might not be too radical. After 103 00:09:56.580 --> 00:10:02.060 all, judges in the United States were all appointed and paid by the government. Mises 104 00:10:02.060 --> 00:10:08.580 replied that the American judges were independent insofar as they could not be removed or prosecuted 105 00:10:08.580 --> 00:10:13.660 even if their decisions were not palatable to the executive. In contrast, the insistence 106 00:10:13.660 --> 00:10:18.580 on limited government was at best useful in the present-day American fight against the 107 00:10:18.580 --> 00:10:22.360 The Attempts to Make the Government Step-by-Step Totalitarian 108 00:10:22.360 --> 00:10:26.780 Mises went on, but there is no doubt that outside of this special field this term is 109 00:10:26.780 --> 00:10:31.900 meaningless as it does not indicate in what regard the government ought to be limited. 110 00:10:31.900 --> 00:10:36.180 Union bosses could for instance refer to this slogan to justify non-interference on the 111 00:10:36.180 --> 00:10:41.660 part of the government whenever strikers commit acts of violence, sabotage, etc. 112 00:10:41.660 --> 00:10:46.280 It was therefore of vital importance that one advocate clearly the supremacy of private 113 00:10:46.280 --> 00:10:52.440 property and its offshoots, capitalism and the market economy. Insistence on federalism 114 00:10:52.440 --> 00:10:59.840 and decentralisation would not do. Decentralisation on a federal basis gives in itself no guarantee 115 00:10:59.840 --> 00:11:05.840 that freedom will be preserved. Medieval feudalism had both decentralisation and federalism, 116 00:11:05.840 --> 00:11:12.480 but only the lords were free and tax-exempt. Burgers and peasants had to endure legal disabilities, 117 00:11:12.480 --> 00:11:16.860 no share in the government and had a loan to pay taxes. 118 00:11:16.860 --> 00:11:21.380 These were very good reasons not to use the label conservative for the new American movement 119 00:11:21.380 --> 00:11:27.540 that rejected communism, socialism, the new D.U. and the emerging anti-market mentality 120 00:11:27.540 --> 00:11:33.340 of the ever more statist mainstream, but the die was cast. Four years after the establishment 121 00:11:33.340 --> 00:11:38.700 of National Review, the label conservative held the public arena. By that time at the 122 00:11:38.700 --> 00:11:44.660 Mises must have outlived the optimism he had felt in the early days of the freemen. He 123 00:11:44.660 --> 00:11:50.980 reverted to the pessimistic outlook that had become almost second nature. When his student 124 00:11:50.980 --> 00:11:55.260 George Reisman said he had the impression that the laissez-faire liberals were growing 125 00:11:55.260 --> 00:12:00.740 in numbers, Mises replied that this was the natural impression of a person who was still 126 00:12:00.740 --> 00:12:05.940 in the process of getting to know the other scattered individuals of the remnant. Such 127 00:12:05.940 --> 00:12:10.660 Such a person might think there are ever more individuals to share his views, because he 128 00:12:10.660 --> 00:12:15.820 comes to know ever more such individuals, but Mises believed that the growth was only 129 00:12:15.820 --> 00:12:19.700 in personal acquaintance and not in absolute numbers. 130 00:12:19.700 --> 00:12:24.620 On another occasion he commented that his writings were like the Dead Sea Scrolls that 131 00:12:24.620 --> 00:12:28.340 someone would find a thousand years from now. 132 00:12:28.340 --> 00:12:33.660 But pessimism did not prevent Mises from fighting the good fight and from encouraging others 133 00:12:33.660 --> 00:12:40.220 to be strong in the battle of ideas. In a letter to Hayek, who had also vigorously rejected 134 00:12:40.220 --> 00:12:43.820 the label of conservative, Mises wrote, 135 00:12:43.820 --> 00:12:49.580 I completely agree with your rejection of conservatism. In his book Up from Liberalism, 136 00:12:49.580 --> 00:12:55.820 Buckley, as a person of fine and educated man, has clearly defined his standpoint. Conservatism 137 00:12:55.820 --> 00:13:00.300 is the tacit acknowledgement that all that is finally important in human experience is 138 00:13:00.300 --> 00:13:05.920 is behind us, but the crucial explorations have been undertaken, and that it is given 139 00:13:05.920 --> 00:13:12.100 to man to know what are the great truths that emerged from them. Whatever is to come cannot 140 00:13:12.100 --> 00:13:16.060 outweigh the importance to man of what has gone before. 141 00:13:16.060 --> 00:13:22.180 Origines, Augustinus and Thomas Aquinas have said the same thing in other words. It is 142 00:13:22.180 --> 00:13:27.580 a sad truth that this program is more attractive than everything that has been said about liberty 143 00:13:27.580 --> 00:13:32.620 and about the idealistic and materialistic benefits of the free economy. 144 00:13:32.620 --> 00:13:35.060 What were the reasons for this, Anne Truth? 145 00:13:35.060 --> 00:13:37.300 Mises felt there was here an unexplored question. 146 00:13:37.300 --> 00:13:38.300 He went on. 147 00:13:38.300 --> 00:13:44.180 I assume that you, just as I, do not right to console yourself with the proverb, Dixie 148 00:13:44.180 --> 00:13:50.420 et salva vi anima meam, I have spoken and thus saved my soul. 149 00:13:50.420 --> 00:13:55.480 Hence there is the question, how is it possible that the elite of our contemporaries is absolutely 150 00:13:55.480 --> 00:14:02.240 How does it come, for example, that the sugar price policy of the American government is 151 00:14:02.240 --> 00:14:08.620 hardly ever contested, even though out of 500 or 1,000 voters there is at most one who 152 00:14:08.620 --> 00:14:14.120 can expect advantages from an institutionally increased sugar price? The problem I have 153 00:14:14.120 --> 00:14:19.600 in mind is not the behaviour of the mass of intellectuals and of those who count themselves 154 00:14:19.600 --> 00:14:25.040 among the intellectuals. I mean those authors, both fiction and non-fiction, who for example 155 00:14:25.040 --> 00:14:53.440 Demise of the Sirkle Bastia 156 00:14:53.440 --> 00:14:58.040 The only work that matched Human Action as a literary monument to the libertarian renaissance 157 00:14:58.040 --> 00:15:03.680 of the early post-war period was Ayn Rand's novel Atlas Shrugged. Mises was a great admirer 158 00:15:03.680 --> 00:15:06.760 of this work and said so in a letter to its author. 159 00:15:06.760 --> 00:15:13.460 Atlas Shrugged is not merely a novel. It is also, or may I say first of all, a cogent 160 00:15:13.460 --> 00:15:19.720 analysis of the evils that plague our society, a substantiated rejection of the ideology 161 00:15:19.720 --> 00:15:26.480 of our self-styled intellectuals, and a pitiless unmasking of the insincerity of the policies 162 00:15:26.480 --> 00:15:32.160 adopted by governments and political parties. It is a devastating exposure of the moral 163 00:15:32.160 --> 00:15:37.280 cannibals, the gigalos of science, and of the academic prattle of the makers of the 164 00:15:37.280 --> 00:15:43.400 anti-industrial revolution. You have the courage to tell the masses what no politician told 165 00:15:43.400 --> 00:15:48.320 them. You are inferior, and all the improvements in your conditions which you simply take for 166 00:15:48.320 --> 00:16:05.760 Before he read Atlas Shrugged, Mises had not counted Ayn Rand among the foremost contemporary 167 00:16:05.760 --> 00:16:08.080 artists and philosophers. 168 00:16:08.080 --> 00:16:12.600 In the original Rand circle in Manhattan, and in many of the later Randian groups throughout 169 00:16:12.600 --> 00:16:17.120 the United States, many members cultivated religious reverence for the writings and opinions 170 00:16:17.120 --> 00:16:22.160 of Ayn Rand. Their attitude to Rand's writings did not differ essentially from the attitude 171 00:16:22.160 --> 00:16:28.260 that Christians hold to the Bible, and consequently they were in more than one respect the acolytes 172 00:16:28.260 --> 00:16:32.960 of a Randian church. Rothbard, who had personally attended the meetings of Rand's group for 173 00:16:32.960 --> 00:16:38.640 several months, stated that the fanaticism with which they worship Rand and Brandon has 174 00:16:38.640 --> 00:16:43.400 to be seen to be believed, the whole atmosphere being a kind of combination of religious cult 175 00:16:43.400 --> 00:16:49.400 and a Trotsky cell. They demanded unconditional allegiance to their creed and harassed and 176 00:16:49.400 --> 00:16:53.920 ousted anyone who would not go along with the party line. One position of the creed 177 00:16:53.920 --> 00:16:58.800 particularly dear to these Ranyans was atheism, the religious belief in the non-existence 178 00:16:58.800 --> 00:17:04.080 of God. For Ayn Rand and her disciples it had always been a matter of course to contest 179 00:17:04.080 --> 00:17:09.160 any evidence purporting to prove the existence of God and to emphasise any argument or piece 180 00:17:09.160 --> 00:17:11.160 The Unconditional Adoption of Atheism 181 00:17:39.160 --> 00:17:51.920 One might argue that the Randian insistence on action in conformity with its atheistic 182 00:17:51.920 --> 00:17:57.400 ideal was a healthy attitude to preserve and cultivate purism, and indeed from this point 183 00:17:57.400 --> 00:18:03.520 of view Randianism might be as legitimate as any other religion. It was however not 184 00:18:03.520 --> 00:18:08.560 the attitude that Murray Rothbard brought to his encounters with fellow human beings. 185 00:18:08.560 --> 00:18:13.060 He had a firm opinion on various questions, but he was mainly interested in argument and 186 00:18:13.060 --> 00:18:17.920 debate as the best method to test positions and opinions. 187 00:18:17.920 --> 00:18:22.080 When it became obvious that he preferred being married to Joanne, to being numbered among 188 00:18:22.080 --> 00:18:28.360 the Randians, things turned ugly. In early summer 1958 Rothbard was asked to abandon his 189 00:18:28.360 --> 00:18:34.480 theistic wife. He refused to comply. This incident had direct repercussions on the Austro-libertarian 190 00:18:34.480 --> 00:18:39.340 Movement, in that it led to the disintegration of the Circular Bastia, the Misesian study 191 00:18:39.340 --> 00:18:46.800 group that met at Murray Rothbard's apartment, and had included Hessen, Ligio, Raco and Reisman. 192 00:18:46.800 --> 00:18:50.920 Hessen and Reisman remained in the Randian orbit and had no further contact with their 193 00:18:50.920 --> 00:18:56.060 former friends, who had in their view betrayed reason. Rothbard in turn pulled no punches 194 00:18:56.060 --> 00:19:01.300 about what he came to call the Ayn Rand cult. He later had telephone shouting matches with 195 00:19:01.300 --> 00:19:06.140 Nathaniel Brandon, a man who took pride in outdoing everyone else in worshipping his 196 00:19:06.140 --> 00:19:09.460 mistress in both connotations. 197 00:19:09.460 --> 00:19:14.180 Brandon charged Rothbard with plagiarism and threatened him with a lawsuit alleging that 198 00:19:14.180 --> 00:19:19.040 Rothbard in a recent paper had adopted ideas from Ayn Rand and Brandon's wife Barbara without 199 00:19:19.040 --> 00:19:24.120 duly acknowledging this intellectual debt. The charge was baseless. It cost Rothbard's 200 00:19:24.120 --> 00:19:28.680 friend Leonard Ligio only a couple of hours of work in a public library to document that 201 00:19:28.680 --> 00:19:33.920 The stolen ideas had been part of the Western intellectual heritage for several centuries 202 00:19:33.920 --> 00:19:39.760 and had originated in many cases with Catholic scholastic thinkers. Mises had taken part 203 00:19:39.760 --> 00:19:44.520 in the symposium on relativism at which Rothbard had presented the original version of the 204 00:19:44.520 --> 00:19:50.080 paper under dispute. The symposium took place in 1959 at Emory University. The Volcker Fund 205 00:19:50.080 --> 00:19:55.640 sponsored it. Helmut Schuck, a professor of sociology at Emory, organised the event. Schuck 206 00:19:55.640 --> 00:20:00.400 Rock also wrote the most scathing indictment of the charges made against Rothbard. About 207 00:20:00.400 --> 00:20:06.720 Rand and Barbara Brandon, he said, they clearly suffer from a serious case of what Sorokin, 208 00:20:06.720 --> 00:20:12.480 Fadds and Feubels calls the discoverer's complex. They seem to think that they, the 209 00:20:12.480 --> 00:20:16.840 female innovators of unique ideas, were robbed by a bad male. 210 00:20:16.840 --> 00:20:23.000 Mises was speechless at the Randians' charge of plagiarism against Rothbard, but he avoided 211 00:20:23.000 --> 00:20:27.560 and any direct involvement in the controversy which he was sure would resolve itself in 212 00:20:27.560 --> 00:20:30.320 Rothbard's favour. 213 00:20:30.320 --> 00:20:36.080 Mises had good reason not to create even more bad blood between his disciples and the Randians. 214 00:20:36.080 --> 00:20:41.360 At the beginning of the 1960s, Brandon's organisation was very successful in selling Mises' writings, 215 00:20:41.360 --> 00:20:43.800 in particular planning for freedom. 216 00:20:43.800 --> 00:20:49.520 At the end of 1961, the book was almost sold out, and Nymeyer planned an extended second 217 00:20:49.520 --> 00:20:52.720 edition, including an additional essay. 218 00:20:52.720 --> 00:20:57.320 The organisation that was very successful in selling Mises's books was the Intercollegiate 219 00:20:57.320 --> 00:20:59.480 Society of Individualists. 220 00:20:59.480 --> 00:21:05.180 Ayn Rand and Nathaniel Brandon also tried to establish closer ties with Mises, inviting 221 00:21:05.180 --> 00:21:11.160 him to attend their lecture evenings and social gatherings. Mises reciprocated to a certain 222 00:21:11.160 --> 00:21:15.880 extent. He appreciated intellectual affinities with the Randians, but he was not fond of 223 00:21:15.880 --> 00:21:22.200 their fanatical zeal. He liked to persuade other people through detached speech and writing, 224 00:21:22.200 --> 00:21:26.600 Whereas the Randians strove to make converts to the cause of objectivism by applying the 225 00:21:26.600 --> 00:21:32.480 same techniques used by religious cons, group sessions, psychoanalysis and group pressure. 226 00:21:32.480 --> 00:21:37.080 Mises could perfectly well respect and even befriend people with whom he disagreed, even 227 00:21:37.080 --> 00:21:41.280 when these disagreements concerned questions of fundamental importance. This was the case, 228 00:21:41.280 --> 00:21:46.800 for example, with Louis Auger, a positivist, Gottfried von Habeler, an interventionist, 229 00:21:46.800 --> 00:21:51.720 Louise Zommer, a protectionist, and Murray Rothbard, an anarchist. 230 00:21:51.720 --> 00:21:56.700 It goes without saying that he did not avoid socialising with honest socialists. Cases in 231 00:21:56.700 --> 00:22:01.400 point were the Bowers, until their fallout with Mises in 1919, as well as his critic 232 00:22:01.400 --> 00:22:07.420 Carl Landauer, whom he probably met in 1952 at Berkeley, and he wrote letters of recommendation 233 00:22:07.420 --> 00:22:12.720 for interventionist professors. Leland Jaeger, a monetarist, once wrote to Mises, I hope 234 00:22:12.720 --> 00:22:17.160 Hope you agree that among people who are united in favour of economic liberalism, there can 235 00:22:17.160 --> 00:22:22.520 be a healthy controversy on such details as the admissibility of the price-level concept 236 00:22:22.520 --> 00:22:26.880 and whether the gold standard or price-level stabilisation is the better rule for monetary 237 00:22:26.880 --> 00:22:31.840 policy. And this hope was entirely justified despite the fact that Jaeger's disagreements 238 00:22:31.840 --> 00:22:37.000 with Mises concerned more than mere details. Mises would not hold anyone in low esteem 239 00:22:37.000 --> 00:22:42.240 just because the person in question held opinions that Mises believed were entirely wrong. Steeped 240 00:22:42.240 --> 00:22:47.400 In the Humanism of the Christian Occident, he held the individual above anything else. 241 00:22:47.400 --> 00:22:51.680 He was not concerned about individual souls, of course, but he did care supremely about 242 00:22:51.680 --> 00:22:53.240 individual liberty. 243 00:22:53.240 --> 00:22:57.100 He was happy for each new convert to the cause of liberty, but he would have been unable 244 00:22:57.100 --> 00:23:02.480 to rejoice over conversions obtained through group pressure and other forms of harassment. 245 00:23:02.480 --> 00:23:07.280 For Mises, only one sin was unforgivable, lack of integrity. 246 00:23:07.280 --> 00:23:10.920 Speaking and behaving against one's better knowledge could not be excused. 247 00:23:10.920 --> 00:23:15.200 This is why Mises maintained a lifelong friendship with Gottfried Habeler, whom he believed to 248 00:23:15.200 --> 00:23:19.440 be an honest interventionist, but broke with Fritz Machlup when he started qualifying the 249 00:23:19.440 --> 00:23:21.400 case for the gold standard. 250 00:23:21.400 --> 00:23:26.380 At the same time, Mises recommended Leland Jaeger for Montpelerin Society stipends, even 251 00:23:26.380 --> 00:23:30.340 though Jaeger was no less skeptical of gold money than Machlup. 252 00:23:30.340 --> 00:23:35.080 But the Iranian mind was not overly concerned with the trifling virtue of integrity. 253 00:23:35.080 --> 00:23:39.780 There was only reason, always capitalized, and whoever did not come to endorse reason 254 00:23:39.780 --> 00:23:44.160 The decision, as defined by the Ayn Randt Church, had to be stupid, evil or hard of 255 00:23:44.160 --> 00:23:45.160 hearing. 256 00:23:45.160 --> 00:23:47.760 Being friends with such a person was out of the question. 257 00:23:47.760 --> 00:23:52.260 The Randian way of dealing with disagreements was to confront the dissenter with a stark 258 00:23:52.260 --> 00:23:53.260 choice. 259 00:23:53.260 --> 00:23:57.360 Either undergo an endless series of discussions with the foregone conclusion that the dissenter 260 00:23:57.360 --> 00:24:02.880 had fallen prey to the heresy of irrationalism, or be expelled from the group and shunned 261 00:24:02.880 --> 00:24:04.920 by all its members. 262 00:24:04.920 --> 00:24:09.920 In the fall of 1961 Nathaniel Brandon showed once again that bullying his opponents was 263 00:24:09.920 --> 00:24:10.920 his forte. 264 00:24:10.920 --> 00:24:15.560 The New Individualist Review, a journal edited by Ralph Reiko, who was by then a doctoral 265 00:24:15.560 --> 00:24:19.860 student in Chicago under Hayek, had published a critical piece on Ayn Rand. 266 00:24:19.860 --> 00:24:24.480 This prompted Brandon to ask Hayek, who was on the editorial board of the review, publicly 267 00:24:24.480 --> 00:24:30.280 to dissociate himself from the author of the article and to insist an apology to his Rand 268 00:24:30.280 --> 00:24:35.120 be printed in the New Individualist Review on your behalf and in your name. 269 00:24:35.120 --> 00:24:39.920 He also sent a copy of the letter to Mises, who was certainly happy to have kept the Randians 270 00:24:39.920 --> 00:24:40.920 at arm's length. 271 00:24:40.920 --> 00:24:43.920 Of course, Hayek never complied. 272 00:24:43.920 --> 00:24:46.440 Mises abhorred such bullying. 273 00:24:46.440 --> 00:24:48.800 He had a different way of dealing with smears. 274 00:24:48.800 --> 00:24:53.740 In the fall of 1961, Mises and Rand met at a party in Henry Hazlitt's house. 275 00:24:53.740 --> 00:24:55.960 It was not their first personal meeting. 276 00:24:55.960 --> 00:25:01.320 They also met in early July 1961 and they discussed the problems which we both consider 277 00:25:01.320 --> 00:25:07.700 as vital. It is possible they stayed in touch in the 1960s. In June 1970 Mises promised 278 00:25:07.700 --> 00:25:13.120 his Mexican friend Velasco that he would talk to her about him and his work. After dinner 279 00:25:13.120 --> 00:25:18.420 a discussion between them turned into an argument on philosophical principle and drew the attention 280 00:25:18.420 --> 00:25:23.300 of the bystanders. It is not clear what was said, even though there were a number of topics 281 00:25:23.300 --> 00:25:49.660 In Correspondence with Mutesius, he said that Ayn Rand was the most energetic opponent of 282 00:25:49.660 --> 00:25:55.500 Antitrust Policy. In any case, Russell Kirk, a notorious critic of Randianism, who had 283 00:25:55.500 --> 00:25:59.940 witnessed the discussion, was later reported to have said in his lectures before student 284 00:25:59.940 --> 00:26:05.240 audiences that Mises had called Ayn Rand a silly little Jew girl. When the report was 285 00:26:05.240 --> 00:26:11.500 brought to Mises's attention, he immediately wrote to Kirk, I never called Mrs. Ayn Rand, 286 00:26:11.500 --> 00:26:16.620 or for that matter anyone else, a silly little Jew girl. I should be obliged if you would 287 00:26:16.620 --> 00:26:19.720 not repeat this false story in the future. 288 00:26:19.720 --> 00:26:21.320 Kirk denied it all. 289 00:26:21.320 --> 00:26:26.800 Your informant, with the eccentricity and fanaticism characteristic of the Ranian cult, 290 00:26:26.800 --> 00:26:30.800 seems to have combined details from several accounts of the meeting between yourself and 291 00:26:30.800 --> 00:26:36.640 Miss Rand, which she had heard, and to have attributed the composite story to me. 292 00:26:36.640 --> 00:26:41.320 Any anti-Jewish prejudice or suggestion thereof was not contained in my second-hand account 293 00:26:41.320 --> 00:26:46.280 nor in the account which I heard, but I'm glad to have from Mr. Hazlitt a more accurate 294 00:26:46.280 --> 00:26:50.520 Report of the Encounter Before Receiving Your Letter 295 00:26:50.520 --> 00:26:53.040 Against the Neoliberals 296 00:26:53.040 --> 00:26:59.720 The Montpelerin Society had begun as an ecumenical undertaking, bringing together purebred liberals 297 00:26:59.720 --> 00:27:05.240 of the classical tradition and neoliberals, who endorsed interventionist schemes to one 298 00:27:05.240 --> 00:27:11.680 degree or another. From the beginning, Mises had been sceptical about the ecumenical concept, 299 00:27:11.680 --> 00:27:16.240 but for the first five or six years his apprehensions seemed unwarranted, even though the 300 00:27:16.240 --> 00:27:30.240 and the organization of all Mont Pelerin activities lay in the hands of a devout neoliberal, Alfred Hohnolt, from Switzerland, who Mises had first met at the 1928 Zurich meeting of the Verein für Sozialpolitik. 301 00:27:30.240 --> 00:27:43.240 An admirer of Roth's serfdom, Hohnolt had been among those who encouraged Hayek to convene the foundational meeting of the Society at Mont Pelerin, and he had also raised substantial funds for the event. 302 00:27:43.240 --> 00:27:47.620 At this meeting, the ambitious Hounault was elected Secretary of the Society, but after 303 00:27:47.620 --> 00:27:53.560 a few years, he was no longer satisfied with his position under Hayek. His long-term goal 304 00:27:53.560 --> 00:27:59.440 was to become Mont Pelerin Society President. His strategy was to make himself irreplaceable. 305 00:27:59.440 --> 00:28:06.520 He dealt with the smallest details of organisation and, by the mid-1950s, started to handle correspondence 306 00:28:06.520 --> 00:28:12.180 without consulting Hayek, who resented these encroachments from a man he did not exactly 307 00:28:12.180 --> 00:28:19.020 After 1956, the conflict between the two men grew more intense and eventually came to a 308 00:28:19.020 --> 00:28:23.420 clash that brought this society to the verge of dissolution. 309 00:28:23.420 --> 00:28:26.580 In the early years, this clash was barely visible. 310 00:28:26.580 --> 00:28:31.420 With the support of Hohenoldt and others, the neoliberals steadily increased their numbers, 311 00:28:31.420 --> 00:28:33.900 but they did not dominate this society. 312 00:28:33.900 --> 00:28:37.860 The main reason was probably that although Hohenoldt had financial backing in the Swiss 313 00:28:37.860 --> 00:28:49.580 Hayek, Mises and a few other classical liberals had a primordial impact on the selection of 314 00:28:49.580 --> 00:28:51.900 topics to be discussed. 315 00:28:51.900 --> 00:28:55.860 On the one hand, this was due to their scientific pedigree. 316 00:28:55.860 --> 00:29:01.040 On the other, they enjoyed substantial financial backing from the Volcker Fund and from individuals 317 00:29:01.040 --> 00:29:04.460 such as Neumeier, Greed and Crane. 318 00:29:04.460 --> 00:29:09.940 At least until the end of 1953, the Volcker Fund paid the membership fees and often also 319 00:29:09.940 --> 00:29:15.420 covered travel expenditure for virtually all non-US members of the Montpilarin Society. 320 00:29:15.420 --> 00:29:20.660 And the Fund was eager to accommodate Mises' wishes, and probably Hayek's wishes also, 321 00:29:20.660 --> 00:29:26.460 when it came to securing financially the presence of certain members at the meetings. For example, 322 00:29:26.460 --> 00:29:32.100 when Mises declared that he would not attend the 1954 meeting in Venice because of insufficient 323 00:29:32.100 --> 00:29:37.860 For French and British participation, the Volcker Fund asked them to handpick the beneficiaries 324 00:29:37.860 --> 00:29:41.940 of financial assistance in order of their relative importance. 325 00:29:41.940 --> 00:29:48.120 Mises named among the French economists one Louis Boudin, two Daniel Villet, three François 326 00:29:48.120 --> 00:29:55.140 Trevaux, and four Bertrand de Jouvenil. Among the British, one Dukes, two Plant and three 327 00:29:55.140 --> 00:30:00.840 Denison, as well as the Irishman Duncan, Mises did not attend the Venice meeting because 328 00:30:00.840 --> 00:30:10.240 2 years later he approved to the funding of Coase, Nutter, Alkin, Philbrook and Jaeger. 329 00:30:10.240 --> 00:30:14.280 At the end of that first phase of the history of the Montpilarin Society, therefore, the 330 00:30:14.280 --> 00:30:19.120 leadership around Hayek was far more radically libertarian than most of the regular members, 331 00:30:19.120 --> 00:30:24.900 especially those from Europe. The coexistence within the Montpilarin Society of groups with 332 00:30:24.900 --> 00:30:29.920 such different orientations was well known by its members. It was also fairly obvious 333 00:30:29.920 --> 00:30:39.920 A case in point was Jean-Pierre Amelius, a young professor of business and economics in Luxembourg, whom Mises knew through correspondence. 334 00:30:39.920 --> 00:30:42.920 At that point, Amelius was 29 years old. 335 00:30:42.920 --> 00:30:50.920 Amelius had recently discovered the literature of classical liberalism, which he devoured and translated into French and German. 336 00:30:50.920 --> 00:30:58.600 Mises had him invited for the 1953 Mont Pelerin Society meeting in Seydisberg. He also suggested 337 00:30:58.600 --> 00:31:03.600 invitations for Fertig, Courtney and Neumeyer. These three men were admitted as new members 338 00:31:03.600 --> 00:31:09.120 in a council meeting of Hayek, Rappard, Ittah, Mises and Houlot. 339 00:31:09.120 --> 00:31:13.160 Hamilius immediately noticed that the society was divided along the lines of ideological 340 00:31:13.160 --> 00:31:19.200 orientation and language into different groups and clans. He himself felt closest affinities 341 00:31:19.200 --> 00:31:25.280 to the American group of Mises, Hayek, Hazlitt, Morley, Furtick and Miller. From the other 342 00:31:25.280 --> 00:31:29.880 participants who did not know that he had gotten his invitation through Mises, he heard 343 00:31:29.880 --> 00:31:37.120 reservations about the Old Guard Mises, Hayek, who were sometimes called the Old Conservatives. 344 00:31:37.120 --> 00:31:41.600 The young professor from Luxembourg was eagerly taking notes and discussing the interventionist 345 00:31:41.600 --> 00:31:47.040 schemes of various members who were not yet part of the Old Guard. Thus John von Sickle 346 00:31:47.040 --> 00:31:51.960 Ludwig Erhard proposed taxing rich heirs, Wilhelm Röpke favoured subsidies for homeowners, 347 00:31:51.960 --> 00:31:56.920 and Otto Weidt argued that heavy taxation would not deter entrepreneurs from working. 348 00:31:56.920 --> 00:32:02.360 Ludwig Erhard, fresh from the victory of his party in the 1953 elections in Germany, also 349 00:32:02.360 --> 00:32:04.320 gave a talk at the meeting. 350 00:32:04.320 --> 00:32:09.040 Hermannius' report shed light on the change of relative weights within the society that 351 00:32:09.040 --> 00:32:14.040 resulted from the apparent success of Ludwig Erhard's neoliberal policies in Germany, 352 00:32:14.040 --> 00:32:18.240 and the so-called Wirtschaftswunder or economic miracle. 353 00:32:18.240 --> 00:32:22.600 To the socialists and social democrats who dominated the climate of mainstream economic 354 00:32:22.600 --> 00:32:27.960 opinion at the time, it was truly miraculous that the abolition of price controls and the 355 00:32:27.960 --> 00:32:33.400 transition from a centrally planned economy to a demarcated economy would yield substantial 356 00:32:33.400 --> 00:32:35.240 economic benefits. 357 00:32:35.240 --> 00:32:40.480 For unrepentant classical liberals such as Mises there was no miracle at all, but Earhart's 358 00:32:40.480 --> 00:32:46.480 was problematic because it gave unwarranted credentials to his middle-of-the-road philosophy. 359 00:32:46.480 --> 00:32:53.480 This also applied to his closest advisors, who were often referred to as champions of the social market economy, 360 00:32:53.480 --> 00:32:58.480 or leaders of the Ordo School of Economics, his Under Secretary of State Müller-Armack, 361 00:32:58.480 --> 00:33:05.480 and the Professors Wilhelm Röpke, Geneva, Alexander Rüstorf, Heidelberg, and Walter Euken, Freiburg. 362 00:33:05.480 --> 00:33:10.520 book. In short, the success of Earhart's initial classical liberal policies was used 363 00:33:10.520 --> 00:33:17.720 to vindicate subsequent interventionist policies, in particular antitrust laws and inflation. 364 00:33:17.720 --> 00:33:22.700 Even before the war, Mises did not have the highest opinion of most German economists. 365 00:33:22.700 --> 00:33:27.720 After his emigration, he had avoided any closer involvement with them. He would acknowledge 366 00:33:27.720 --> 00:33:32.960 Earhart's achievements by contributing to a fest drift in Earhart's honour, but he 367 00:33:32.960 --> 00:33:44.320 Only after Gottfried Habeler pleaded a case of the editors did Mises agree to write a 368 00:33:44.320 --> 00:33:50.360 piece on economic liberalism, a complement to Hayek's article on political liberalism. 369 00:33:50.360 --> 00:33:54.200 His contribution was eventually published under the title Market. He delivered the work 370 00:33:54.200 --> 00:33:59.340 before the end of March 1955. The publishers improved his article after having received 371 00:33:59.340 --> 00:34:06.100 and the prospect of cooperating with a fashionable ordo school, be it in the Mont Pelerin society 372 00:34:06.100 --> 00:34:12.340 or elsewhere, did not exactly warm his heart either. He believed the ordo people were hardly 373 00:34:12.340 --> 00:34:17.420 better than the socialists he had fought all his life. In fact, he eventually called them 374 00:34:17.420 --> 00:34:23.220 the ordo interventionists. It must be said, however, that he supported them whenever common 375 00:34:23.220 --> 00:34:24.940 and Ground could be found. 376 00:34:24.940 --> 00:34:31.180 Thus, in June 1950, he recommended the translation of Röpke's textbook Die Lehre von der Wirtschaft 377 00:34:31.180 --> 00:34:35.540 to the University of Chicago Press, and his New York associates seemed to have harbored 378 00:34:35.540 --> 00:34:41.620 essentially the same views, but without Mises's hesitation to express such views in print. 379 00:34:41.620 --> 00:34:46.420 There were classical liberals in Germany who opposed the interventionist excesses of the 380 00:34:46.420 --> 00:34:51.420 Earhart Ministry and the Ordo School, the leaders of the laissez-faire group were Volkmar 381 00:34:51.420 --> 00:34:57.740 by Mutesius and Hans Helwig. Mutesius, who was based in Frankfurt am Main, ran two successful 382 00:34:57.740 --> 00:35:04.460 journals, Zeitschrift für das gesamte Kreditwesen and Monatsblätter für freiheitliche Wirtschaftspolitik. 383 00:35:04.460 --> 00:35:09.700 But they could do no more than fight an honorable rearguard action. Being the night professorships 384 00:35:09.700 --> 00:35:13.940 said the universities. Their foremost means of action was Mutesius' journal.