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NOTE 7. Friedrich von Wieser: From Economist to Social Scientist

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Chapter 7, Frederich von Wieser, From Economist to Social Scientist

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His tall, lean and slightly stooping appearance, his narrow bearded face, his blue eyes and

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his hair whitened with age always made a lasting impression on students and listeners. As a

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lecturer he spoke calmly and at a leisurely pace, without notes, and expressed himself

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and Classical Style. His admirers classed him among the greatest stylists of academic

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prose. In the culturally aware cities of Prague and Vienna, he was regarded as a connoisseur

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of art and good music, who would sometimes sit down at the piano himself to give society

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a sample of his ability. Even in his lectures, Friedrich von Mises, whose stature and demeanor

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in a single distance and aloofness, rarely tolerated questions and interruptions. A student

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who wished to have personal contact with him would have to pose some interesting questions.

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If this met with success, he dominated the conversation in truly royal fashion. The born

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thinker avoided disputing other people's writings and ideas directly. Managing without

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footnotes and bibliographies in his publications, Mises spoke and wrote on the results of his

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His own intense observations above all. One would think, not infrequently, he was witnessing

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the escapist inner monologue of a brooding mind. Come the end of his academic career,

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like a learned narcissist whose cognitive paths circled around his own ego, Wieser's

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reflections on his own intellectual development took up only slightly less space than all

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of his references to other authors put together.

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Friedrich von Mises was born in Vienna in 1851, the fourth of nine children. His father,

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Leopold, was initially the Director of Supplies in the War Ministry and later Vice-President

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of the Audit Office. He was knighted in 1859. Friedrich attended the Viennese Schottengymnasium

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at the same time as the young Eugen von Boehm-Bawerk. The Schottengymnasium, an institute for secondary

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The education at the Benedictine Monastery, Schottenklooster, was founded by imperial

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decree in 1807. This would result in a lifelong bond between the two and later Boehm-Bawerk

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would marry Friedrich von Mises' sister Paula. Coming to grips with Roman law while

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studying law at the University of Vienna introduced him to the problems of economics. The writings

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of the English sociologist Herbert Spencer, 1820-1903, directed his attention to the great

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Impersonal Forces of Human Society. But only upon reading Menger's principles did he find

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the perspective he was looking for, one he would perceive later in life as liberation

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from cognitive distress. After finishing his doctorate in 1875, Mises was able, as a result

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of Carl Menger's mediation, to gain a scholarship and hone his expertise under the great minds

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of Economics in Heidelberg, Leipzig and Jena. Thereafter, he spent a number of years in

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the State Finance Authority of Lower Austria until he presented his Habilitationthesis

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über den Ursprung und die Hauptgesetze des wirtschaftlichen Wirtes, 1884, on the origin

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and main laws of economic value. Going further than Carl Menger and William Stanley Jevons,

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He interpreted costs as foregone use or as opportunity costs and introduced the term

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Grenznutzen, marginal utility to economics.

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Mises' first publication met with little response outside Vienna.

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Nevertheless, in 1884 he received, as Emil Sachs had before him, a non-tenured professorship

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in Prague.

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Due to national disputes, the local university had just been split into a German and a Czech

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University. But Wieser was able to quickly settle into the small-scale structures of

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the Deutsche Universität, which only had 12 university lecturers and 572 students.

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In 1886 he married the daughter of a Prague architect. The marriage would remain childless.

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Wieser finally earned a tenured professorship with the publication of Die Naturliche Wirt,

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1989 Natural Value In this work he applied the marginal utility

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theory not only horizontally, that is, to trading and exchange, but also vertically,

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that is, to production processes. He defined the value of higher order goods, productive

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goods, in light of the value of the consumer goods produced alongside them, thus developing

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his imputation theory. Mises, who possessed a certain obsession with compulsive computability,

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Mises recognized as one of the first economists to realize the information value of prices.

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His analysis of economic processes was soon considered a kind of standard model of the

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Austrian School. It was presented comprehensively for the first time in Theorie der gesellschaftlichen

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Wirtschaft 1914, Social Economics. Mises' notion of an economic equilibrium, which he

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conceived as an image of reality, ran distinctly counter to the principal ideas of Menger and

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and Boehm-Bawerk. Looking back to Wieser, Ludwig von Mises would later explain that

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without market activities the subjective valuations of the market participants could not be transformed

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into prices. In the 1890s, Wieser revealed a measured German nationalist position when

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he published several economic, historical and statistical analyses of the Crown Lands,

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Bohemia and Moravia. As president of the Deutsche Gesellschaft für Kunst und Literatur, German

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and Society for Art and Literature, he played an important role in the cultural life of

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Prague. He was even elected President of the Deutsche Universität Prague in 1901. Despite

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all of this, Wieser seized the longed-for chance of returning to the beloved homeland

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after Menger's withdrawal from his Viennese professorship. He participated actively in

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cultural life in Vienna too. His house in Döbling became a treasured meeting place

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for Artists, Politicians and Academics, De Bring is a former suburb of Vienna, incorporating

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it into the town in 1892. Even early on he had given composers like Hugo Wolff and Anton

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Bruckner considerable encouragement in their work. After the turn of the century, having

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written quite a few works on monetary theory, Mises turned more and more to sociological

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questions. In his Theorie der Gesellschaftlichen Wirtschaft, 1914, although remaining formally

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He nevertheless created an image of the individual which was more like a feeble caricature than

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a self-determining and rebellious actor, as described by Carl Menger.

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Mises saw people as thoroughly tamed creatures, even the sense of self is bred by the forces

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of society and is thus oriented in a way which is no longer purely personal.

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is thus nothing more than a selfishness of powerlessness. The First World War erupted

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only a few weeks after his Theorie was published. He was one of the very few Austrians to write

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several pieces that were moderate in tone, but nevertheless decidedly in favour of war.

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At the height of the war and transition economy, old Austrians experimented with central planning,

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the convinced statist Friedrich von Mises became a member of the Herrenhaus. In the three

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In the three last governments of 1917 to 1918, he held the office of Minister of Trade and

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for a while also the office of Minister of Public Works. The disintegration of the monarchy

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hit the staunch German-Austrian particularly hard.

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After retiring from his lecturing duties in 1922, Mises lived partly in seclusion in Vienna

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and partly in his summer residence in Brunnwinkel by the Wolfgangsee. Today Brunnwinkel is a

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Mises and Mises, a part of St. Girgen at the Lake Wolfgangsee in Salzburg, Austria. He

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put together his work on sociology and political science in his magnum opus Gesetz der Macht,

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1926, the Law of Power.

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In a rather disjointed manner, according to Menzel, appraised differently by Morgenstern,

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he presented a medley of comments, clever observations and sociological and historical

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Analyses. On the other hand, Wieser here showed too many character traits of a nebulous

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mind. Anti-Semitic statements and an abstract Führerkult can also be found in the book,

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as well as sources indicating the contrary. Wieser was later labelled a fascist for this

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reason. Führerkult roughly translates as leader worship or literally leader cult. Wieser died

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in July 1926 at his summer residence after contracting pneumonia.

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During his time in Vienna alone, the sophisticated, cultivated teacher had educated an estimated

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15,000 male law graduates and, starting in 1919, female law graduates as well in economics.

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Apart from this, he left no mark worth mentioning, neither as a minister nor as a sociologist.

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As doyen of the Austrian School, he paved the way for his replacement, Hans Mayer, who

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was, however, not capable of following in the steps of his great predecessor.

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As an economist, Mises built upon a strongly qualified subjectivism.

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His value calculation failed due to his notion of imputation.

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The following generations of the Vienna School would largely consider him not a part of their

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camp, but rather as belonging to the Lausanne School, which can be traced back to Léon