WEBVTT NOTE Economics and Moral Courage 1 00:00:00.000 --> 00:00:03.700 All right, our next speaker needs no introduction. 2 00:00:03.700 --> 00:00:10.300 As I said earlier, in 1982, he founded the Mises Institute 3 00:00:10.300 --> 00:00:14.700 after serving as Ron Paul's Congressional Chief of Staff for four years. 4 00:00:14.700 --> 00:00:18.000 He is the editor of a number of books that we have outside for sale, 5 00:00:18.000 --> 00:00:21.000 The Gold Standard Perspectives in the Austrian School, 6 00:00:21.000 --> 00:00:24.600 The Free Market Reader, The Irrepressible Rothbard, 7 00:00:24.600 --> 00:00:27.400 author of two books, Speaking of Liberty, 8 00:00:27.400 --> 00:00:31.300 and his newest book, The Left, The Right, and The State. 9 00:00:31.300 --> 00:00:42.800 Frequent guest on Judge Andrew Napolitano's Freedom Watch with the Judge on Fox.com. 10 00:00:42.800 --> 00:00:47.700 Oh, and he has a website you may have been to called LewRockwell.com. 11 00:00:47.700 --> 00:00:55.500 He is a living libertarian legend, and today he is speaking about economics and moral courage. 12 00:00:55.500 --> 00:01:02.500 Please help me welcome Lew Rockwell. 13 00:01:22.500 --> 00:01:24.500 You are right. 14 00:01:25.500 --> 00:01:29.500 It must be really painful to be an economist of the mainstream today. 15 00:01:29.500 --> 00:01:37.340 Today, or at least it should smart a little. In a financial and economic calamity of the 16 00:01:37.340 --> 00:01:43.240 current scale, people naturally want to know who issued the warnings about the real estate 17 00:01:43.240 --> 00:01:50.220 bubble and its likely aftermath. When private sector jobs have grown none at all in ten 18 00:01:50.220 --> 00:01:57.740 years and when ten years of domestic investment is systematically undone in eighteen months, 19 00:01:57.740 --> 00:02:04.500 When housing prices in some sections of the country collapsed 80% and when formerly prestigious 20 00:02:04.500 --> 00:02:12.160 banks go belly up or receive many, many billions in rescue aid, people want to know which economists 21 00:02:12.160 --> 00:02:14.820 saw this coming. 22 00:02:14.820 --> 00:02:20.520 Perhaps it is these economists, the ones who had long issued the warnings and not the ones 23 00:02:20.520 --> 00:02:27.060 relentlessly consulted by the mainstream media, who should be giving the guidance about going 24 00:02:27.060 --> 00:02:33.660 Maybe it is they who ought to be weighing in on whether the new stock market boom is 25 00:02:33.660 --> 00:02:39.700 a reflection of reality or another bubble developing within a bust that could lead to 26 00:02:39.700 --> 00:02:47.540 a secondary depression. Among the mainstream, however, no one saw it coming. This is because 27 00:02:47.540 --> 00:02:52.520 they have never learned the lesson that Frederic Bastiat sought to teach, namely that we need 28 00:02:52.520 --> 00:02:58.840 Need to look beneath the surface to the unseen dimensions of human action in order to see 29 00:02:58.840 --> 00:03:08.240 the full economic reality. It is not enough just to stand back and look at points on a 30 00:03:08.240 --> 00:03:17.240 chart going up and going down, smiling when things go up, frowning when things go down. 31 00:03:17.240 --> 00:03:22.760 This is the nihilism of an economic statistician who employs no theory, no notion of cause 32 00:03:22.760 --> 00:03:29.720 and effect, no understanding of the dynamics of human history. 33 00:03:29.720 --> 00:03:35.320 So long as things were going up, everyone thought the economic system was healthy. 34 00:03:35.320 --> 00:03:37.700 It was the same in the late 1920s. 35 00:03:37.700 --> 00:03:43.320 In fact, it has been the same throughout human history, and it is no different today. 36 00:03:43.320 --> 00:03:45.360 The stock market is going up. 37 00:03:45.360 --> 00:03:50.720 Actually that is a sign of economic health, but people ought to reflect on the fact that 38 00:03:50.720 --> 00:04:00.000 the highest performing stock market in the world in 2007 belonged to Zimbabwe. 39 00:04:00.000 --> 00:04:05.800 It is because of the tendency to look at the surface rather than at the underlying reality 40 00:04:05.800 --> 00:04:12.520 that business cycle theory has been such a source of confusion throughout economic history. 41 00:04:12.520 --> 00:04:17.960 To understand the theory requires looking beyond the data and into the core of the structure 42 00:04:17.960 --> 00:04:25.400 of production and its overall health. It requires abstract thinking about the relationship between 43 00:04:25.400 --> 00:04:32.120 capital and interest rates, money and investment, real and fake savings, and the economic impact 44 00:04:32.120 --> 00:04:38.200 of central banks and the illusions they weave. You can't get that information by watching 45 00:04:38.200 --> 00:04:43.080 The numbers blowing by you at the bottom of your TV screen. 46 00:04:43.080 --> 00:04:47.800 Then when the crisis hits, it comes as a complete surprise and economists find themselves in 47 00:04:47.800 --> 00:04:52.360 the role of forging a plan to do something about it. 48 00:04:52.360 --> 00:04:56.780 This is when the crudest form of Keynesianism comes into play. 49 00:04:56.780 --> 00:05:01.880 The government spends what money it has and prints what it doesn't have. 50 00:05:01.880 --> 00:05:04.120 Unemployed people are paid. 51 00:05:04.120 --> 00:05:07.000 Tricks to prop up failing industries abound. 52 00:05:07.000 --> 00:05:12.760 Generally the approach is to gin up the public to engage in some form of exchange to keep 53 00:05:12.760 --> 00:05:15.800 reality at bay. 54 00:05:15.800 --> 00:05:20.760 Austrians counsel a different approach, one that takes account of underlining reality 55 00:05:20.760 --> 00:05:23.000 during the boom phase. 56 00:05:23.000 --> 00:05:28.220 They draw attention to the existence of the bubble before it pops, and once it goes away, 57 00:05:28.220 --> 00:05:34.560 the Austrians suggest that it does no good to blow another bubble or otherwise keep uneconomic 58 00:05:34.560 --> 00:05:36.360 Production and Plans Going. 59 00:05:37.480 --> 00:05:41.680 The Austrians in the late 1920s and early 1930s 60 00:05:41.680 --> 00:05:45.140 found themselves having to explain this again and again. 61 00:05:46.000 --> 00:05:49.240 But that was at the onset of the age of positivism, 62 00:05:49.240 --> 00:05:51.320 the method that posits that only what you see 63 00:05:51.320 --> 00:05:54.320 on the surface really matters. 64 00:05:54.320 --> 00:05:57.640 So they had a very difficult time making points 65 00:05:57.640 --> 00:05:59.720 that were more sophisticated. 66 00:05:59.720 --> 00:06:02.480 They were like scientists trying to address 67 00:06:02.480 --> 00:06:07.600 The Convention of Witch Doctors The same is true today. 68 00:06:07.600 --> 00:06:12.600 The Austrian account of the Depression requires thinking on more than one level to arrive 69 00:06:12.600 --> 00:06:17.300 at the truth, whereas economists these days are more likely to be looking for obvious 70 00:06:17.300 --> 00:06:25.720 explanations and even more obvious solutions even when these neither explain nor solve anything. 71 00:06:25.720 --> 00:06:31.340 This puts the Austrians in an interesting position within the intellectual culture of any time 72 00:06:31.340 --> 00:06:38.600 in Any Place. They must go against the grain. They must say things that people do not want 73 00:06:38.600 --> 00:06:45.220 to hear. They must be willing to be unpopular, socially and politically. I'm thinking here 74 00:06:45.220 --> 00:06:51.620 of people like Benjamin Anderson, Gerrit Garett, Henry Hazlitt, and of course F. A. Hayek and 75 00:06:51.620 --> 00:06:58.760 most of all Ludwig von Mises. They gave up career and fame to stick with the truth and 76 00:06:58.760 --> 00:07:01.560 and say what had to be said. 77 00:07:01.560 --> 00:07:05.880 Later in life, Hayek was speaking before a group of economics students. 78 00:07:05.880 --> 00:07:11.800 He bared his soul about the problem of the moral choices economists must make. 79 00:07:11.800 --> 00:07:17.220 He said that it is very dangerous for an economist to seek fame and fortune and to work closely 80 00:07:17.220 --> 00:07:22.120 with political establishments, simply because in his experience, the most important trait 81 00:07:22.120 --> 00:07:27.400 of a good economist is the courage to say the unpopular thing. 82 00:07:27.400 --> 00:07:32.320 If you value your position and your privileges more than the truth, you will say what people 83 00:07:32.320 --> 00:07:36.280 want to hear rather than what they need to hear. 84 00:07:36.280 --> 00:07:40.480 It is a feature that marked the life of Ludwig von Mises. 85 00:07:40.480 --> 00:07:43.840 Today, his name resonates around the world. 86 00:07:43.840 --> 00:07:48.640 The tributes to him pour in on a monthly and weekly basis. 87 00:07:48.640 --> 00:07:50.720 His books remain massive sellers. 88 00:07:50.720 --> 00:07:57.040 He is the standard bearer for the science in service of human freedom, especially at 89 00:07:57.040 --> 00:08:03.560 Like the Guido Hulsman biography of Mises appeared, the appreciation for his courage 90 00:08:03.560 --> 00:08:09.440 and nobility have grown. But we must remember that it was not always so, and it did not 91 00:08:09.440 --> 00:08:15.760 have to be so. This kind of immortality is granted in no small measure because of the 92 00:08:15.760 --> 00:08:24.600 discreet moral choices made in life. If you had asked anyone about this man between 1925 93 00:08:24.600 --> 00:08:28.880 in the late 1960s, the bulk of his career. 94 00:08:28.880 --> 00:08:31.720 The answer would have been that he was washed up, 95 00:08:31.720 --> 00:08:35.600 old school, too doctrinaire, intransigent, 96 00:08:35.600 --> 00:08:37.700 unwilling to engage the profession, 97 00:08:37.700 --> 00:08:42.140 attached to antique ideas and his own worst enemy. 98 00:08:42.140 --> 00:08:45.300 They called him the, quote, last night of liberalism 99 00:08:45.300 --> 00:08:48.320 as a way of conjuring up images of Don Quixote. 100 00:08:49.700 --> 00:08:53.140 Mises was undaunted, excuse me, 101 00:08:53.140 --> 00:08:59.220 When Yale University Press solicited opinions on whether it should publish Human Action, 102 00:08:59.220 --> 00:09:04.060 most people answered that this book should never see the light of day. 103 00:09:04.060 --> 00:09:10.180 Because after all, its day was long past, and it was thanks only to the intervention 104 00:09:10.180 --> 00:09:16.160 of Fritz Machlup and Henry Hazlitt that Yale University Press bothered it all. 105 00:09:16.160 --> 00:09:22.660 But Mises was undaunted then as he had been throughout his life, and as he remained until 106 00:09:22.660 --> 00:09:33.180 Before going into that choice, I would like to speak of another economist who was a contemporary 107 00:09:33.180 --> 00:09:40.640 of Mises. His name was Hans Meyer. He was born in 1879, two years before Mises. He died 108 00:09:40.640 --> 00:09:47.980 in 1955. But while Mises worked at the Chamber of Commerce in Vienna because he was denied 109 00:09:47.980 --> 00:09:53.780 a paid position at the university. Meyer served as one of three full professors, along with 110 00:09:53.780 --> 00:10:01.740 socialist Amar Spahn and Count Degenfield Schoenberg. Of Spahn, Mises wrote in his memoirs 111 00:10:01.740 --> 00:10:07.340 that, quote, he did not teach economics, instead he preached national socialism. Of the Count, 112 00:10:07.340 --> 00:10:12.780 Mises wrote that he was, quote, curly-versed in the problems of economics. It was Meyer 113 00:10:12.780 --> 00:10:29.540 Mayer wrote a handful of essays that contributed little to nothing, but then again his main 114 00:10:29.540 --> 00:10:35.060 concern had nothing to do with theory and nothing at all to do with ideas. His focus 115 00:10:35.060 --> 00:10:40.900 was on academic power within the department and within the profession. People outside 116 00:10:40.900 --> 00:10:45.920 Inside of academia, may not understand what this means, but inside academia, people know 117 00:10:45.920 --> 00:10:51.620 all about this. There are people in every department who expend the bulk of their efforts 118 00:10:51.620 --> 00:10:57.800 on the pettiest form of professional advancement. What is at stake? Not much, but as we know, 119 00:10:57.800 --> 00:11:02.100 the smaller the stakes, the more vicious the fight. 120 00:11:02.100 --> 00:11:07.680 Among the prizes are better titles, higher salaries, the ability to get the best possible 121 00:11:07.680 --> 00:11:14.680 to advance one's favorite people to get a larger office with a puffier chair, to know all the right people in their profession, and best of all to be able to lord it over others, and to be able to reduce the influence of your enemies and increase the influence of your friends in a way that makes people into your lifetime minions and supplicants. 122 00:11:37.680 --> 00:11:42.800 In a political system, there are even more prizes to be close to politicians, to get 123 00:11:42.800 --> 00:11:48.160 outside gigs in which you serve as an expert in drafting legislation, or in legal proceedings, 124 00:11:48.160 --> 00:11:53.280 to testify before Congress, to get called by the MSM to comment on national affairs 125 00:11:53.280 --> 00:11:59.480 and the like. The point is not to advance ideas, but rather to advance oneself in a professional 126 00:11:59.480 --> 00:12:06.560 sense. Outsiders imagine that university life is all about good ideas, but insiders know 127 00:12:06.560 --> 00:12:10.640 know that the real battles that take place within departments often have very little 128 00:12:10.640 --> 00:12:13.560 to do with ideas or principles. 129 00:12:13.560 --> 00:12:18.760 Strange coalitions can develop based entirely on the pettiest of issues. 130 00:12:18.760 --> 00:12:22.480 Professional ambitions are the driving force, not principles. 131 00:12:22.480 --> 00:12:26.640 There are people in every department who are highly accomplished, but whose accomplishments 132 00:12:26.640 --> 00:12:33.700 have nothing to do with science, teaching truth, or pursuing a vocation of real scholarship. 133 00:12:33.700 --> 00:12:37.340 This has been the case, of course, for many centuries in academia, although somehow it 134 00:12:37.340 --> 00:12:42.460 seems worse today, and these petty pursuits are often rewarded in this life while those 135 00:12:42.460 --> 00:12:50.060 who eschew them in favor of truth are pushed aside or relegated to a permanent low status. 136 00:12:50.060 --> 00:12:55.460 This is part of the facts of life, and that is what Hayek was referring to, and Mises's 137 00:12:55.460 --> 00:12:58.900 life illustrates this point perfectly. 138 00:12:58.900 --> 00:13:00.860 Let's return to Professor Meyer. 139 00:13:00.860 --> 00:13:06.780 The main energies of Meyer were spent in an open war on his rival for power, Atmar Spahn. 140 00:13:06.780 --> 00:13:12.300 This consumed him almost completely. He believed he had to keep Spahn at bay in order to advance 141 00:13:12.300 --> 00:13:18.020 himself. Meyer smeared Spahn in every possible way and place and brought unrelenting scandal 142 00:13:18.020 --> 00:13:23.900 to the department with his war to the knife. I note that Meyer and Spahn did not disagree 143 00:13:23.900 --> 00:13:30.420 on any matter of policy in any substantive way. It was all about position and power. 144 00:13:30.420 --> 00:13:34.240 He wasn't consumed with his hatred for and plots against Spahn. 145 00:13:34.240 --> 00:13:39.620 Meyer spent the remainder of his energy building up his power base within the university. 146 00:13:39.620 --> 00:13:44.820 It began well for him as the acknowledged successor to Friedrich von Wieser, the previous 147 00:13:44.820 --> 00:13:46.740 power broker. 148 00:13:46.740 --> 00:13:51.860 Meyer had established himself as the most grumbling student of Wieser's, and his reward 149 00:13:51.860 --> 00:13:57.300 was that Wieser picked him as his successor by passing not only Ludwig von Mises but the 150 00:13:57.300 --> 00:14:00.180 amazing Joseph Schumpeter. 151 00:14:00.180 --> 00:14:06.180 Let's begin Meyer's march. He called the shots. Mises himself was on the enemies list, of course. 152 00:14:06.180 --> 00:14:14.180 In fact, Meyer was responsible, in the large part, for the denial of a paid position at the University of Mises. 153 00:14:14.180 --> 00:14:20.180 But that wasn't enough for Meyer. He treated Mises's students very badly during examinations, 154 00:14:20.180 --> 00:14:26.180 and for this reason, Mises went so far as to suggest to his students and to his seminar participants 155 00:14:26.180 --> 00:14:31.180 They declined to be officially enrolled in order to prevent them from being harmed by Meyer. 156 00:14:31.180 --> 00:14:38.180 Meyer also worked to make it nearly impossible for any student in the department to write a dissertation under Mises. 157 00:14:38.180 --> 00:14:41.180 The politics were vicious and unrelenting. 158 00:14:41.180 --> 00:14:44.180 So what was Mises' attitude towards this? 159 00:14:44.180 --> 00:14:50.180 He writes in his memoir, I could not be bothered by all of these things. 160 00:14:50.180 --> 00:14:52.180 He just kept on doing his work. 161 00:14:52.180 --> 00:14:57.620 You can easily imagine scenes from this period. Mises is in his office writing and reading, 162 00:14:57.620 --> 00:15:01.660 trying to hammer out and perfect the theory of the business cycle or reflect on the problem 163 00:15:01.660 --> 00:15:08.260 of economic methodology. A student might come in and let him know about Meyer's latest antics. 164 00:15:08.260 --> 00:15:12.780 Mises would look up from his work, sigh with exasperation and tell the student not to worry 165 00:15:12.780 --> 00:15:20.540 about it, and then go back to work. He refused to be drawn in. The Mises circle was aghast 166 00:15:20.540 --> 00:15:24.780 by the goings-on, but the members did their best to make light of it. They even made up 167 00:15:24.780 --> 00:15:29.980 a song set to a traditional Viennese melody that they called the Mises-Meier Debate, which 168 00:15:29.980 --> 00:15:35.660 featured the two economists talking past each other and sharing no common values at all. 169 00:15:35.660 --> 00:15:41.060 At one point, Mises's circle grew into a full-blown economic society associated with 170 00:15:41.060 --> 00:15:47.940 the university. Mises could only be vice president. Meier would, of course, be president, since 171 00:15:47.940 --> 00:15:52.940 Mises was the master of the universe as far as economics in Vienna was concerned. 172 00:15:52.940 --> 00:15:54.940 Meyer wouldn't have it any other way. 173 00:15:54.940 --> 00:16:00.940 He never missed a chance to underscore who was in charge and what he could do about it. 174 00:16:00.940 --> 00:16:04.940 Mises' position as vice president would not last. 175 00:16:04.940 --> 00:16:08.940 The time came when Nazism grew in influence in Austria. 176 00:16:08.940 --> 00:16:13.940 As an all-time liberal and as a Jew, Mises knew that his time was limited. 177 00:16:13.940 --> 00:16:16.940 Sensing the possibility of even physical harm, 178 00:16:16.940 --> 00:16:21.780 Mises accepted a new position in Geneva and left for his new home in 1934. 179 00:16:21.780 --> 00:16:26.220 The society declined in membership and otherwise floundered. 180 00:16:26.220 --> 00:16:31.540 In 1938, Austria was annexed to the German Third Reich. 181 00:16:31.540 --> 00:16:34.100 Meyer had a choice about what he would do. 182 00:16:34.100 --> 00:16:36.180 He could have stood by principle. 183 00:16:36.180 --> 00:16:38.420 But why would he do that? 184 00:16:38.420 --> 00:16:43.060 It would have meant sacrificing his self-interest for the greater good, and that is something 185 00:16:43.060 --> 00:16:45.140 Meyer had never done. 186 00:16:45.140 --> 00:16:51.020 Quite the opposite, his entire academic career was about Meyer and Meyer alone. 187 00:16:51.020 --> 00:16:55.980 So to his everlasting disgrace, he read all members of the economic society. 188 00:16:55.980 --> 00:17:00.600 The announcement was that all non-Aryan members were hereby expelled. 189 00:17:00.600 --> 00:17:03.140 This meant, of course, that no Jews were allowed. 190 00:17:03.140 --> 00:17:08.380 He cited, quote, the changed circumstances in German Austria and a view of the respective 191 00:17:08.380 --> 00:17:13.700 laws now also applicable to this state, close quote. 192 00:17:13.700 --> 00:17:18.360 So you can see then that all of Meyer's power over his underlings was bested by the greater 193 00:17:18.360 --> 00:17:25.840 power of the state, to which he was unfailingly loyal. He thrived under the social democrats. 194 00:17:25.840 --> 00:17:31.600 He thrived during the Nazi takeover. He helped the Nazis purge the Jews and the liberals 195 00:17:31.600 --> 00:17:38.300 from his academic department. Now note that Meyer was no raging anti-Semite. His decision 196 00:17:38.300 --> 00:17:43.680 was the result of a series of discrete choices for position and power in the profession against 197 00:17:43.680 --> 00:17:46.880 against Truth and Principle. 198 00:17:46.880 --> 00:17:51.540 One day it seemed harmless in some way, and then the moment of truth arrived, in which 199 00:17:51.540 --> 00:17:57.240 he played a role in the mass slaughter of ideas and those who held them. 200 00:17:57.240 --> 00:18:01.640 Perhaps Meyer thought that he made the right choice, after all, he maintained his privileges 201 00:18:01.640 --> 00:18:07.920 and perks, and after the war, when the communists came to power, he thrived then too. 202 00:18:07.920 --> 00:18:13.040 He did all that an academic was supposed to do to get ahead and to achieve the glory that 203 00:18:13.040 --> 00:18:17.040 that an academic can achieve, regardless of the circumstances. 204 00:18:17.040 --> 00:18:21.040 But consider the irony of this power and glory. 205 00:18:21.040 --> 00:18:27.040 In the bigger picture of continental economics, the Austrians were not highly regarded by the profession at large. 206 00:18:27.040 --> 00:18:33.040 Since the turn of the century, the German historical school had captured the mantle of science. 207 00:18:33.040 --> 00:18:39.040 Their empirical orientation and stance against classical theory had, over the decades, 208 00:18:39.040 --> 00:18:43.240 melded nicely with the rise of positivism in the social sciences. 209 00:18:43.240 --> 00:18:48.800 Never forget that the phrase Austrian School was coined not by the Austrians, but by the 210 00:18:48.800 --> 00:18:54.240 German historical school, and the phrase was used as a put-down, with overtones of a school 211 00:18:54.240 --> 00:19:01.040 mired in medieval scholasticism and deduction rather than real science. 212 00:19:01.040 --> 00:19:05.080 So our friend Meyer thought he was master of the universe, although he was in fact a 213 00:19:05.080 --> 00:19:07.800 small fish in an even smaller pond. 214 00:19:07.800 --> 00:19:15.480 But he played the game, and that was all he did. He thought he won, but history has rendered 215 00:19:15.480 --> 00:19:22.160 a different judgment. He died in 1955, and then what happened? Well, justice finally 216 00:19:22.160 --> 00:19:28.520 arrived and he was instantly forgotten. Of all the students he had during his life, he 217 00:19:28.520 --> 00:19:35.960 had none after his death. There were no Mayarians. Hayek reflected on the amazing development. 218 00:19:35.960 --> 00:19:41.400 He expected much to come out of the Wieser-Meier School and not much to come out of the Mises 219 00:19:41.400 --> 00:19:48.280 branch. He writes that the very opposite happened. Meier's machine seemed promising, but it broke 220 00:19:48.280 --> 00:19:54.440 down completely. While Mises had no machine at all, it became the leader of a global colossus 221 00:19:54.440 --> 00:19:58.320 of ideas. If we look at Mark Blaug's book, Who's Who 222 00:19:58.320 --> 00:20:04.480 in Economics, a 1300 page tome, there is an entry from Menger, Hayek, Boehm-Bawerk and 223 00:20:04.480 --> 00:20:06.680 and of course, Ludwig von Mises. 224 00:20:06.680 --> 00:20:08.080 Henry calls Mises, quote, 225 00:20:08.080 --> 00:20:11.080 the leading 20th century figure of the Austrian School 226 00:20:11.080 --> 00:20:13.960 and credits him with contributions to methodology, 227 00:20:13.960 --> 00:20:17.480 price theory, business cycle theory, monetary theory, 228 00:20:17.480 --> 00:20:19.860 socialist theory and interventionism. 229 00:20:20.900 --> 00:20:24.040 There is no mention of the price he paid in life, 230 00:20:24.040 --> 00:20:26.840 no mention of his courageous moral choices, 231 00:20:26.840 --> 00:20:29.640 no mention of the grim reality of a life moving 232 00:20:29.640 --> 00:20:33.580 from country to country one step ahead of the state. 233 00:20:33.580 --> 00:20:40.580 He ended up being known only for his triumphs, about which perhaps not even Mises was aware during his lifetime. 234 00:20:40.580 --> 00:20:44.580 But guess what? There is no entry at all for Hans Meyer. 235 00:20:44.580 --> 00:20:49.580 It is not that his status is reduced. Not that he is noted and dismissed. 236 00:20:49.580 --> 00:20:53.580 Not that he is put down as a minor thinker with power. 237 00:20:53.580 --> 00:20:58.580 He is not called a Nazi collaborator. He is not called a communist collaborator. 238 00:20:58.580 --> 00:21:05.020 Not at all. He isn't even mentioned. It is as if he never existed. 239 00:21:05.020 --> 00:21:11.020 Meier's legacy vanished so fast after his death that he was forgotten within a few years. 240 00:21:11.020 --> 00:21:17.020 His status is so bad that Wikipedia doesn't have an entry for him. 241 00:21:17.020 --> 00:21:26.020 In fact, this talk today has probably given him more coverage than any other in 50 years, 242 00:21:26.020 --> 00:21:30.060 This may be the last time you ever hear him mention. 243 00:21:30.060 --> 00:21:34.860 The Meyer Line ended, but the Mises Line was just beginning. 244 00:21:34.860 --> 00:21:38.900 He left for Geneva in 1934, accepting a dramatic pay cut. 245 00:21:38.900 --> 00:21:43.340 His fiancee followed and they were married, but not before he warned her that while he 246 00:21:43.340 --> 00:21:48.300 would write much about money, he would never have much of it. 247 00:21:48.300 --> 00:21:52.840 And in Geneva he stayed for six years, having left his beloved Vienna and watched the world 248 00:21:52.840 --> 00:21:55.980 go through the shredding of civilization. 249 00:21:55.980 --> 00:22:01.100 The Nazis ransacked his old apartment, stole his books and all his papers. He was living 250 00:22:01.100 --> 00:22:06.380 a nomadic existence, unaware of where his next position would be. And that was the way 251 00:22:06.380 --> 00:22:12.980 he lived in the prime of his life. He was in his mid-fifties and nearly homeless. 252 00:22:12.980 --> 00:22:18.020 But as he dealt with the Meyer problem during his years in Vienna, Mises would not be distracted 253 00:22:18.020 --> 00:22:24.300 from his important work. For six years he researched and wrote. The result was his magnum 254 00:22:24.300 --> 00:22:28.300 William Opus, a massive treatise on economics called Nationale Economie. 255 00:22:28.300 --> 00:22:33.300 In 1940, he completed the book and it was published in a small print run. 256 00:22:33.300 --> 00:22:40.300 But how intense was the demand in 1940 for a book on the economics of freedom written in German? 257 00:22:40.300 --> 00:22:44.300 This was not destined to be a bestseller. 258 00:22:44.300 --> 00:22:50.300 He surely knew that while writing it, but he wrote it anyway. 259 00:22:50.300 --> 00:22:52.300 Instead of book signings and celebrations, 260 00:22:52.300 --> 00:22:55.300 Mises faced another life-changing event that year. 261 00:22:55.300 --> 00:22:59.300 He received word from his Geneva sponsors that there was a problem. 262 00:22:59.300 --> 00:23:02.300 There were too many Jews taking refuge in Switzerland. 263 00:23:02.300 --> 00:23:05.300 He was told that he needed to find a new home. 264 00:23:05.300 --> 00:23:08.300 The United States was his new safe haven. 265 00:23:08.300 --> 00:23:11.300 He began to write letters for positions in the United States, 266 00:23:11.300 --> 00:23:13.300 but think what this would mean. 267 00:23:13.300 --> 00:23:15.300 He was a German speaker. 268 00:23:15.300 --> 00:23:17.300 He had a reading knowledge of English, 269 00:23:17.300 --> 00:23:37.300 There were serious ideological problems in the United States too. The country was enthralled 270 00:23:37.300 --> 00:23:44.460 with Keynesian economics. The profession had turned. There were very few, if any, real free-market 271 00:23:44.460 --> 00:23:49.820 Economists in the United States to champion his cause. There were a few leads he had on 272 00:23:49.820 --> 00:23:56.160 jobs, but they were mere promises, no discussion of pay or any kind of security, and he ended 273 00:23:56.160 --> 00:24:02.640 up having to leave with no assurances at all. But in the United States, Mises did have a 274 00:24:02.640 --> 00:24:09.160 major champion outside of academia. His name was Henry Hazlitt. Let me review his history 275 00:24:09.160 --> 00:24:21.160 He became so well known as a literary figure that he was hired as literary editor of The 276 00:24:21.160 --> 00:24:28.400 Nation magazine before the New Deal, a very major post. His free market views were not 277 00:24:28.400 --> 00:24:33.200 a special problem for him then, but after the Great Depression, liberal intellectuals 278 00:24:33.200 --> 00:24:38.580 had to make a choice. They had to adhere to free market theory or embrace the industrial 279 00:24:38.580 --> 00:24:41.980 and Planning State of FDR. 280 00:24:41.980 --> 00:24:44.920 The nation went with the New Deal. 281 00:24:44.920 --> 00:24:50.160 That was a major reversal for this organ of liberal opinion that had long championed freedom 282 00:24:50.160 --> 00:24:53.680 and condemned industrial statism. 283 00:24:53.680 --> 00:24:59.500 The New Deal was nothing if not the imposition of a fascist system of economics. 284 00:24:59.500 --> 00:25:04.520 But the nation set a precedent for the American left that this ideological tendency has followed 285 00:25:04.520 --> 00:25:05.980 ever since. 286 00:25:05.980 --> 00:25:12.860 All principles must eventually yield to the one overriding imperative of imposing capitalism 287 00:25:12.860 --> 00:25:15.380 no matter what. 288 00:25:15.380 --> 00:25:18.160 But Hazlitt refused to go along with the change. 289 00:25:18.160 --> 00:25:19.860 He argued with his colleagues. 290 00:25:19.860 --> 00:25:23.580 He pointed out the fallacies of the National Industrial Recovery Act. 291 00:25:23.580 --> 00:25:27.780 He patiently tried to explain to them the absurdities of the New Deal. 292 00:25:27.780 --> 00:25:31.340 He wouldn't give in, so they fired him. 293 00:25:31.340 --> 00:25:34.020 H.L. Mencken saw the greatness of his work. 294 00:25:34.020 --> 00:25:39.140 In fact, Macon referred to him as the one economist who could really write, and so he made him 295 00:25:39.140 --> 00:25:45.300 his own successor at the American Mercury. Sadly, this didn't work out because the ownership 296 00:25:45.300 --> 00:25:50.740 of that publication did not like Hazlitt's Jewishness or his free market bent and sent 297 00:25:50.740 --> 00:25:57.900 him packing again. In different ways, in different sectors, in different countries, it seemed 298 00:25:57.900 --> 00:26:03.260 like Mises and Hazlitt were living parallel lives. At each crossroad in life, they had 299 00:26:03.260 --> 00:26:16.260 They both chose the path of principle. They chose freedom, even when it was at the expense of their own bank accounts, and even when their choice brought professional decline and risked failure in the eyes of their colleagues. 300 00:26:16.260 --> 00:26:25.260 Hazlitt eventually moved to the New York Times, which back then did not have nearly the prestige, I must say the unearned prestige, that it has today. 301 00:26:25.260 --> 00:26:30.940 He was later fired by the Times for opposing Bretton Woods, but while he was there, in 302 00:26:30.940 --> 00:26:36.140 part he used his position to write about Mises' books like socialism. 303 00:26:36.140 --> 00:26:40.100 This grabbed the attention of a handful of American business people like Lawrence Ferdig, 304 00:26:40.100 --> 00:26:45.500 later to become a very generous donor to the Mises Institute, as indeed Henry Haslett was 305 00:26:45.500 --> 00:26:46.740 too. 306 00:26:46.740 --> 00:26:51.300 It was Ferdig and his friends who knew of Mises' arrival in America, and they were 307 00:26:51.300 --> 00:26:52.540 thrilled. 308 00:26:52.540 --> 00:26:59.140 They had seen what a devastating blow FDR and Keynesianism were for free market ideas. 309 00:26:59.140 --> 00:27:04.500 They put together a fund that would provide Mises a position at New York University where 310 00:27:04.500 --> 00:27:10.460 he could teach and write. He was never paid by the university, where he was always a visiting 311 00:27:10.460 --> 00:27:14.980 professor for decades, but through this private endowment. 312 00:27:14.980 --> 00:27:21.980 Do you see how this all links up? Hazlitt took the moral road, the courageous road, the 313 00:27:21.980 --> 00:27:26.820 The road of sacrifice and principle. It was because of that that Mises, who had taken 314 00:27:26.820 --> 00:27:32.660 a similar road, could find safe haven in the United States. It was not the position that 315 00:27:32.660 --> 00:27:38.820 he deserved. He would be treated much worse than Keynesians and Marxists. But it was something. 316 00:27:38.820 --> 00:27:43.580 It was an income to pay the bills. It was a chance to teach and write. He had the freedom 317 00:27:43.580 --> 00:27:48.200 to say what he wanted to say. That was all he needed. 318 00:27:48.200 --> 00:27:52.600 So we can see how these two men of principle, worlds apart, ended up being drawn to each 319 00:27:52.600 --> 00:27:59.720 other because they each recognized a type, men who were willing to do what is right. 320 00:27:59.720 --> 00:28:05.400 Regardless of the circumstances, each could have gone another way. Mises might have been 321 00:28:05.400 --> 00:28:10.380 every bit as famous and powerful in Vienna as Meyer had been, but he would have thrown 322 00:28:10.380 --> 00:28:17.180 away the immortality of his ideas in the process. Hazlitt could have had a high position with 323 00:28:17.180 --> 00:28:31.140 One of the people who had been drawn to Mises through Hazlitt's writings was the head of 324 00:28:31.140 --> 00:28:36.780 Yale University Press. He approached Mises about doing an English language edition of 325 00:28:36.780 --> 00:28:43.340 his magnum opus from 1940. Mises had already dedicated six years to that book and it had 326 00:28:43.340 --> 00:28:49.500 Sunk Without a Trace. Now he was being asked to translate it into English. It was a daunting 327 00:28:49.500 --> 00:28:56.220 task but he agreed. Yale then set out to find referees to approve such a huge publishing 328 00:28:56.220 --> 00:29:02.620 risk. Yale first went to Mises' old colleagues and they were about as disappointing as referees 329 00:29:02.620 --> 00:29:07.420 as they were in other aspects of their careers. They wrote that there was no need to publish 330 00:29:07.420 --> 00:29:15.140 Mises' ideas were old and superseded by Keynesian theory, but Yael persisted and Hazlitt finally 331 00:29:15.140 --> 00:29:19.460 managed to assemble a group of people who would endorse the book's translation and 332 00:29:19.460 --> 00:29:22.260 Mises got to work. 333 00:29:22.260 --> 00:29:26.860 Now we all know the frustration that comes with losing a file on one's computer and 334 00:29:26.860 --> 00:29:28.860 having to recreate it. 335 00:29:28.860 --> 00:29:34.500 Imagine what it was like for Mises to lose a thousand page book, to lose it to history 336 00:29:34.500 --> 00:29:39.620 in Dark Times and Being Asked to Recreate it in Another Language. 337 00:29:39.620 --> 00:29:41.220 But he was undaunted. 338 00:29:41.220 --> 00:29:47.020 He got to work and the result appeared fully nine years later and of course that book was 339 00:29:47.020 --> 00:29:50.340 called Human Action. 340 00:29:50.340 --> 00:29:56.660 By academic standards, it was a best seller and remained so 60 years later. 341 00:29:56.660 --> 00:30:01.940 Even so, Mises remained at his unpaid, unofficial position, but he gathered around himself students 342 00:30:01.940 --> 00:30:07.100 for his seminar, even though other professors warn the students not to take his class or 343 00:30:07.100 --> 00:30:11.820 attend the sessions. They discourage their students from having anything to do with them 344 00:30:11.820 --> 00:30:18.820 at all, and the dean seconded their hostility. The dean was John Sawhill, who later became 345 00:30:19.340 --> 00:30:26.340 the first energy czar under Richard Nixon, a very bad man. But Mises, who had navigated 346 00:30:26.340 --> 00:30:45.340 But Mises, who had navigated the wars at the University of Vienna, this was very small potatoes, nothing to pay attention to at all, slowly his fame spread, but we need to remember that even at its height at this time, in the United States, it was tiny compared to what it is today. 347 00:30:45.340 --> 00:30:50.500 In fact, Mises died a year before what is usually considered the Austrian revival, which 348 00:30:50.500 --> 00:30:56.360 is often dated from 1974 when Hayek received the Nobel Prize, a prize that was entirely 349 00:30:56.360 --> 00:31:02.980 unexpected and a real tribute, excuse me, a prize that was entirely unexpected and which 350 00:31:02.980 --> 00:31:07.700 he shared with a socialist and which shocked a profession that had no interest in the ideas 351 00:31:07.700 --> 00:31:12.060 of either Mises or Hayek, both of whom they considered to be dinosaurs. 352 00:31:12.060 --> 00:31:17.260 It's interesting to read Hayek's acceptance speech with the Mises Institute published 353 00:31:17.260 --> 00:31:23.100 this year. It's a tribute to a profession with which he wanted closer ties, but it was 354 00:31:23.100 --> 00:31:28.780 not a loving presentation of the glories of academia. In fact, it was the opposite. He 355 00:31:28.780 --> 00:31:33.860 said that the most dangerous person on earth is the arrogant intellectual who lacks the 356 00:31:33.860 --> 00:31:39.500 humility necessary to see that society needs no masters and cannot be planned from the 357 00:31:39.500 --> 00:31:45.660 and the top-down, and intellectual lacking and humility can become a tyrant, he said, 358 00:31:45.660 --> 00:31:49.140 and an accomplice in the destruction of civilization itself. 359 00:31:49.140 --> 00:31:54.420 It was an amazing speech for a Nobel Prize winner to give on the implicit condemnation 360 00:31:54.420 --> 00:31:59.620 of a century of intellectual and social trends and a real tribute to Mises, who had stuck 361 00:31:59.620 --> 00:32:05.620 by his principles and never given in to the academic trends of his time. 362 00:32:05.620 --> 00:32:09.620 A similar story could be told about the life of Murray and Rothbard. 363 00:32:09.620 --> 00:32:17.620 He might have become a regular star in an Ivy League department, but instead decided to follow the lead of Mises in economic science. 364 00:32:17.620 --> 00:32:23.620 As a result, he taught at a tiny college in Brooklyn for many years at very low pay. 365 00:32:23.620 --> 00:32:28.620 But as with Mises, this element of Rothbard's life is largely forgotten. 366 00:32:28.620 --> 00:32:33.620 After their death, people have forgotten all the trials and difficulties these men faced. 367 00:32:33.620 --> 00:32:39.620 And what did they earn for their commitments? They earned for their ideas a certain kind of immortality. 368 00:32:39.620 --> 00:32:46.620 What are those ideas? They said that freedom works, and freedom is right. 369 00:32:46.620 --> 00:32:51.620 That government does not work, and that it is the source of great evil in this world. 370 00:32:51.620 --> 00:32:55.620 They proved these propositions for thousands of applications. 371 00:32:55.620 --> 00:32:59.620 They wrote these truths in scholarly treatises and popular articles, 372 00:32:59.620 --> 00:33:03.620 and history has vindicated them again and again. 373 00:33:03.620 --> 00:33:08.620 We are living now through another period of economic planning 374 00:33:08.620 --> 00:33:11.620 and we're seeing economists split on both sides. 375 00:33:11.620 --> 00:33:16.620 The overwhelming majority are saying what the regime wants them to say. 376 00:33:16.620 --> 00:33:22.620 To depart too much from the prevailing ideology of power is more of a risk than most want to take. 377 00:33:22.620 --> 00:33:26.620 A small minority, the same group that warned of the bubble, 378 00:33:26.620 --> 00:33:32.380 is again warning the stimulus is a fake and they are going against the grain in 379 00:33:32.380 --> 00:33:39.520 saying so. I'm with Hayek on this point. To be an economist with integrity means 380 00:33:39.520 --> 00:33:43.500 having to say things that people don't want to hear and especially to say 381 00:33:43.500 --> 00:33:48.340 things that the regime does not want to hear. It takes more than technical 382 00:33:48.340 --> 00:33:52.840 knowledge to be a good economist. It takes moral courage and that is an even 383 00:33:52.840 --> 00:33:57.080 is a shorter supply than economic logic. 384 00:33:57.080 --> 00:34:02.200 The Mises Institute will continue to be a harbinger of both, as it has been for the 385 00:34:02.200 --> 00:34:04.520 whole of its history. 386 00:34:04.520 --> 00:34:10.400 And just as Mises needed Haslett and Ferdig, so we need our supporters, everyone in this 387 00:34:10.400 --> 00:34:17.080 room, to give us a voice and to help us reach out to many more students, faculty, professionals 388 00:34:17.080 --> 00:34:20.680 and citizens of all types as we can. 389 00:34:20.680 --> 00:34:23.080 It's a burden we must all bear. 390 00:34:23.080 --> 00:34:29.840 As Mises said, in the end, no one is safe if civilization is sweeping to destruction. 391 00:34:29.840 --> 00:34:34.000 And the only way to fight bad ideas is with good ones. 392 00:34:34.000 --> 00:34:38.240 That's a fight I'm willing to engage in so long as God gives me breath. 393 00:34:38.240 --> 00:34:43.880 And I hope that all of you will continue to fight or join the fight with the Mises Institute. 394 00:34:50.680 --> 00:35:12.720 I don't know if you all know, but when Lew took the job starting the Institute, he promised 395 00:35:12.720 --> 00:35:27.920 He made the deal with Ludwig von Mises' widow that he would spend the rest of his life with the Mises Institute and devote the rest of his life to this, and he has. 396 00:35:27.920 --> 00:35:38.720 He continues as chairman and CEO, and we are all the better for it. 397 00:35:38.720 --> 00:35:47.920 I want to make one comment about, I understand we've run out of books. What a terrible thing. 398 00:35:47.920 --> 00:35:51.920 So thank you for your book buying prowess. I'm not sure this has happened. If we have 399 00:35:51.920 --> 00:35:57.960 books, there's only a few left, but I want to remind you, just go to Mises.org. Actually, 400 00:35:57.960 --> 00:36:05.660 there's no www to it. Mises.org, go to the store. We've got everything there available 401 00:36:05.660 --> 00:36:14.140 for Purchase. I do want to mention the gift cards on the table again today. I get a copy 402 00:36:14.140 --> 00:36:20.700 of Reassessing the Presidency. It will go to the fine work that Lew started so many 403 00:36:20.700 --> 00:36:28.380 years ago and continues to this day. You actually heard from two gentlemen who have gone through 404 00:36:28.380 --> 00:36:36.900 through the program, Peter Klein, M.U. class of 1989, and Bob Murphy, M.U. class of 2000-2001. 405 00:36:36.900 --> 00:36:44.740 So I think you have a good taste of what Mises Institute and Mises University produces. 406 00:36:44.740 --> 00:36:52.700 Again, I want to thank our sponsor today, Mr. Jim Wolfe, for his fine sponsorship of 407 00:36:52.700 --> 00:36:53.700 at this event. 408 00:36:53.700 --> 00:37:09.620 And of course thank our speakers, thank our staff, taking this show on the road takes 409 00:37:09.620 --> 00:37:14.860 a little doing, a lot of moving parts, but they all do a fine job, Christy, Will, Chad, 410 00:37:14.860 --> 00:37:16.940 James Fogel, so I want to thank them. 411 00:37:22.700 --> 00:37:27.540 and Lou mentioned that great Mises quote but I'd like to repeat it because I 412 00:37:27.540 --> 00:37:30.780 think it bears repeating everybody carries a part of society on his 413 00:37:30.780 --> 00:37:36.220 shoulders no one is relieved of the share responsibility by others no one 414 00:37:36.220 --> 00:37:40.620 can find a safe way for himself if society is sweeping toward destruction 415 00:37:40.620 --> 00:37:44.660 therefore everyone in his own self-interest must thrust himself 416 00:37:44.660 --> 00:37:49.460 vigorously into the intellectual battle I want to thank all of you for thrusting 417 00:37:49.460 --> 00:37:56.460 into the intellectual battle this Saturday. Enjoy the rest of your weekend.