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NOTE Epilogue to 'Mises: The Last Knight of Liberalism'

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Epilogue

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If ever it could be said that one man stood against the ideological tide of an era, that

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was von Mises. But whether his efforts have turned that tide is a question to be resolved

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in the future by those who understand his theories and share his love of liberty. Ludwig

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von Mises was the last knight of liberalism, but to think of him as a political thinker

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only is to underestimate his place in the history of ideas. He pioneered the integration

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of monetary theory into value theory, macro and microeconomics, the theory of economic

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calculation and the inquiry into the a priori foundations of economic science. Even more

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than that, he excelled as a systematic thinker. He created a comprehensive system of economic

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Economic Theory and also highlighted the place of economics among the sciences and its role

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within human civilization. More than any other economist before or after him, he has clarified

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its political, social and cultural implications. Economics was not merely the foundation of

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a comprehensive political programme centred on private property rights, it was the scientific

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cornerstone of an entire world view in which peace, cooperation and tolerance reigned supreme.

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As he saw it, opting for a free society did not demand cold-heartedness or mistrusting

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the intellect. It was the type of society that was demonstrably best at promoting the

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material, cultural and spiritual well-being of the overwhelming majority of mankind, of

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all those who did not aspire to live off spoliation. Human reason, despite its limitations, was

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the most precious tool in a man's pursuit of happiness, and it led straight to the case

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for classical liberalism and the market economy. Other thinkers, most notably F. R. Hayek,

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had criticised socialism and statism as the fruit of excessive rationalism. For Mises,

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the planning state and the interventionist state were not reasonable enough. Their intellectual

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Several champions were quite simply wrong on the essential question, but rather than

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admitting the case for liberty and capitalism, these advocates spent their time finding ever

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new justifications for government interventionism by contesting the very existence of economic

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laws if necessary. This was not so much an intellectual hubris as it was a moral one.

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It was not, above all, an empty pretense of knowledge. It was a revolt against reason.

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This expression is taken from the title of chapter 3 in Human Action. The chief contribution

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of Human Action is to make this point. Ever since its first publication in 1949, Mises's

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magnum opus has remained for our time what the inquiry into the nature and causes of

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the wealth of nations was for the 18th and 19th centuries, a handbook of the science

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of human liberty, a treatise of the scientific foundations underpinning political liberalism.

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Just as Adam Smith's work was based on comprehensive acquaintance with the economic knowledge of

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his day, Human Action portrays the grammar of modern economics. The foundation of modern

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economic thought is the theory of subjective value, developed by Menger and others. Mises

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complemented this theory by a general theory of economic calculation. Its central idea

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is that economic rationality is logically and historically contingent. Contradicting

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According on this point all economic literature since Adam Smith, as well as fellow Austrians

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including Visa and Hayek, Mises stressed that calculation in terms of money prices is not

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just one form of economic calculus, it is the only type of economic calculus there is.

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It follows that human civilization is the fragile fruit of certain cultural conditions

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that are necessary for the emergence of money and monetary calculus. Here economics comes

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is again into play. Learning, developing and spreading the teachings of economic science

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has brought about an unheard of increase of living standards after the 18th century, along

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with the cultural achievements of a great number of people, who then became affluent

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enough to dedicate their lives to the arts and the sciences. To preserve these cultural

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standards it is necessary not to lose sight of their economic foundations, it is necessary

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to Learn Economics, Mises stresses, this is in our age the primary civic duty, and he

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insists that the matter is too important to be entrusted to public education and government

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expert.

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Economics must not be relegated to classrooms and statistical offices, and must not be left

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to esoteric circles.

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It is the philosophy of human life and action, and concerns everybody and everything.

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is the Pith of Civilization and of Man's Human Existence.

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In the concluding chapters of his magnum opus, he emphasized the importance of private education.

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It was an important lesson he had learned first-hand in his long life.

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Government sponsorship introduces a pro-government bias into economic education and economic

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research, thus undermining the social function of economic science.

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He concluded Human Action with this statement.

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The body of economic knowledge is an essential element in the structure of human civilization.

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It is the foundation upon which modern industrialism and all the moral, intellectual, technological

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and therapeutic achievements of the last centuries have been built. It rests with men whether

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they will make the proper use of the rich treasure with which this knowledge provides

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them or whether they will leave it unused. But if they fail to take the best advantage

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When he wrote these lines, Mises could look back on a lifetime invested in the development

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of economics. Little by little he had come to realise that his discipline was the intellectual

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foundation of modern civilisation, and that all people who care about other people and

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the progress of human civilization had to become acquainted with it. This was not a

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conviction he had adopted in youthful exuberance when he first came across the writings of

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Menger and the classical economists. It was an opinion that grew in him, even after he

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had already reached a fairly advanced age. The passage just quoted is from Human Action.

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Nine years earlier, in nationale économie, Mises could not bring himself to assign economics

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was quite such an elevated place, but then he was only 58 years old. By economics, Mises

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meant the science that came from classical figures, such as Hume, Smith, Ricardo, Say,

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and Bastiat, that had been transformed by Menger and others in the light of the new

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subjective value theory, which had further been transformed by Mises and others in the

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of the 20th Century and which Mises expected to be transformed ever further by future generations.

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It was the science that analyzed the logical implications of human action dealing with

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scarce goods. It was the science that demonstrated again and again that government interventionism

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could not work miracles but was bound by inexorable laws of cause and effect. This science came

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to be supplanted in the course of the 20th Century, and in particular after the Second

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World War, by a new discipline that, while being taught under the same name as the old

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economics, set out to apply the methods of the natural sciences to elucidate phenomena

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such as prices, income, employment, inflation and growth. Mises digested the challenges

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that the various strands of this new discipline raised for the old economics. When he published

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Human Action then, it was not merely a summary of his own previous works, but a new synthesis

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developed in critical response not only to historicism and Marxism, but also to positivism,

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experimental psychology and game theory, disciplines that still dominate the social sciences in

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our day. Ironically, the very success of the ideas that Mises combated in a lonely struggle

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more than 30 years ago now make for the lasting importance of his own system of thought.

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Misesian economics is today a strong and fast-growing paradigm, as witnessed by the number of publications

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The most surprising aspect of this growth is that it has virtually no institutional backing.

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Mises himself turned politically incorrect at an early stage of his career and later

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on he felt even more out of fashion due to his epistemological views. The colleges and

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These universities shunned him. The political parties in power did not listen and were certainly

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glad that nobody else seemed to do so either. Mises enjoyed some personal backing by private

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foundations most notably the Volcker Fund and the Earhart Foundation. After his death,

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his legacy was promoted actively by the Ludwig von Mises Institute in Alabama. But these

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few and financially insignificant institutions had a hard time competing with organizations

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that bore the stamp of official government approval. It was and still is an uphill battle.

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Thus the main explanation of the present-day growth of the Misesian paradigm is the extraordinary

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vigour of the ideas that inspire it. Mises is a classic, but in our day he is more than

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that. A classic author has given mankind a timeless formulation of essential questions

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and sometimes time-tested answers. Yet these questions and answers are not necessarily the

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ones that move us today or are relevant to solve the problems that we confront. Not so

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in the case of Mises. More than thirty years after his death, his writings still strike

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the reader, academic and layman alike, as relevant and thought-provoking. His books

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and articles are still bought by the thousands each year, and, most of all, read. How many

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Many economics students today actually read something Adam Smith or David Ricardo have

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written. Any teacher of economics knows the answer. The same answer holds true for the

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writings of 20th century luminaries such as Gustav Kassel or Frank Knight. It holds

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true even for the writings of John Maynard Keynes, the greatest champion ever of interventionism

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is constantly referred to in the classroom and in the media, but few people have ever

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What is it that makes for this continued relevance?

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Looking back at the end of this volume on the life and work of Mises, many plausible

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answers could be given to this question.

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One could single out a substantial number of path-breaking contributions in various

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and its fields of economic analysis. One could refer to his personal virtues, entailing admiration

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and inspiration on the part of many close associates. But we would like to stress another consideration,

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an aspect of overriding importance that helps explain both the fascination of his work and

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his place in the history of thought, realist epistemology. Mises's work stands for the

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The idea, or hypothesis, that some aspects of social reality cannot be adequately analyzed

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with the methods used in the natural sciences and in historical investigation. Yet this

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layer of the social world can be described with praxeology and economics. There are time

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invariant causes and effects in human action. Praxeology is the descriptive knowledge of

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It was this idea that attracted Mises to Menger and that turned him into an economist once

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he convinced himself that Menger was on to something. It is the same idea that still

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attracts people to Mises' writings as a radical alternative to the great number of

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contemporary approaches that, while discarding the realist hypothesis from the outset, seem

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to fail to deliver the goods. Whoever wishes to engage in the analysis of the causes and

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and effects that prevail in the social world would do well to start with Mises, unless

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he wishes to go even further back and find his own way from the classical economists

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or from the school of Salamanca. As things stand today, Mises's writings provide the

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only continuous link between modern economic thought and the long tradition of realist

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Social Analysis that reaches back to Nicolas Oresme in the 14th century. This is not to

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say of course that the Misesian paradigm defines some sort of perfection in the social sciences,

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but it has given us the most recent system of social thought from a realist point of

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view and thus it seems to be at present the most useful starting point to engage in that

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and the great intergenerational venture that we call the social sciences.

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It has also given us a most fruitful intellectual apparatus for understanding the workings of

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society in all times and places.

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The Ludwig von Mises Institute hopes that you have enjoyed this audiobook.

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The Mises Institute dedicates this volume to all of its generous donors and wishes to thank these patrons in particular.

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