Ludwig Heinrich Edler von Mises was an
Austrian economist,
philosopher,
author and
classical liberal who had a significant influence on the modern
free-market libertarian movement and the
Austrian School.
Economist and political theorist
F. A. Hayek first came to know Mises while working as Mises' subordinate at a government office dealing with Austria's post-
World War I debt.
Hayek wrote:
there I came to know him mainly as a tremendously efficient executive, the kind of man who, as was said of John Stuart Mill,
because he does a normal day's work in two hours, always has a clear
desk and time to talk about anything. I came to know him as one of the
best educated and informed men I have ever known...
It was Hayek's development of Mises' innovative theoretical work on
the business cycle which later earned him the
Nobel Prize in
economics.
In 1934, Mises left Austria for
Geneva, Switzerland, where he was a professor at the Graduate Institute of International Studies until 1940. Fearing the prospect of Germany taking control over Switzerland, in 1940 Mises with other Jewish refugees left Europe and emigrated to New York City.
There he became a visiting professor at New York University, from 1945 until his retirement in 1969, though he was not salaried by the university.
Mises wrote and lectured extensively on behalf of
classical liberalism and is seen as one of the leaders of the
Austrian School of economics.
Many of his works, including
Human Action, were on two related economic themes:
- monetary economics and inflation;
- the differences between government controlled economies and free trade.
Mises argued that money is demanded for its usefulness in purchasing
other goods, rather than for its own sake and that any unsound
credit expansion causes
business cycles.
His other notable contribution was his argument that
socialism must fail economically because of the
economic calculation problem –
the impossibility of a socialist government being able to make the
economic calculations required to organize a complex economy.
Mises
projected that without a
market economy there would be no functional
price system,
which he held essential for achieving rational and efficient allocation
of capital goods to their most productive uses.
Socialism would fail as
demand cannot be known without prices, according to Mises. Mises'
criticism of socialist paths of economic development is well-known, such
as in his 1922 work
Socialism: An Economic and Sociological Analysis:
The only certain fact about Russian affairs under the Soviet regime
with regard to which all people agree is: that the standard of living of
the Russian masses is much lower than that of the masses in the country
which is universally considered as the paragon of capitalism, the
United States of America. If we were to regard the Soviet regime as an
experiment, we would have to say that the experiment has clearly
demonstrated the superiority of capitalism and the inferiority of
socialism.
-- which comes complete with the possibly overdone sub-headline: "Why, Sixty Years After His Death, John Maynard Keynes is the Most Important Economic Thinker for America."
