Ludwig von Mises

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Ludwig Heinrich Mises

Ludwig Heinrich Edler von Mises (born September 29, 1881 in Lemberg , Austria-Hungary , † October 10, 1973 in New York , from 1919: Ludwig Heinrich Mises ( Nobility Repeal Act ) ) was an Austrian-American economist and theorist of classical liberalism and libertarianism . He is considered to be one of the most important representatives of the Austrian School of Economics in the 20th century .


Grave of the parents in the central cemetery Vienna

Ludwig Edler von Mises was born on September 29, 1881 as the son of Arthur Edlen von Mises and his wife Adele, née Landau, in Lemberg (then the capital of the Crown Land of Galicia , now Lviv , Ukraine ). He came from a wealthy Jewish family. Emperor Franz Joseph I raised his great-grandfather Mayer Rachmiel Mises to hereditary nobility . His brother was the mathematician Richard von Mises . A few years later the family moved to Vienna, where Mises began studying law in 1900 and graduated in 1906 with a dissertation. From 1906 von Mises worked for the Chamber of Commerce and Industry in Vienna and headed the finance department there.

Von Mises wrote in 1940:

“In the first period, which lasted from the collapse of the monarchy in the fall of 1918 to the fall of 1919, the most important task I had set myself was to prevent Bolshevism . I have already told you how I succeeded in doing this through influencing Otto Bauer . The fact that Bolshevism did not come about in Vienna at that time was solely my success. Few people supported me in battle, and their help was quite ineffective. I dissuaded Bauer from the idea of ​​trying to join Moscow . The radical young people, the Bauers authority not recognized and act against the will of the party leadership on their own wanted were so inexperienced, incompetent and full of mutual jealousy, that not even a halfway workable party organization of Communists could set up. Development was in the hands of the leaders of the old social democratic party. In this circle, Bauer had the last word to speak (p. 49). What I achieved was only to postpone the disaster. The fact that Bolshevism did not occur in the winter of 1918/1919 and that the collapse of industry and the banks did not occur as early as 1921 but only in 1931 was largely the result of my efforts (p. 47). "

- Ludwig von Mises, Memoirs , 1940

Mises played a leading role in ending hyperinflation in Austria in 1922 and was a leading voice in the reorganization of the Austrian National Bank on the basis of a gold standard under the supervision of the League of Nations . He advocated drastic cuts in income and corporate taxes that strangled private sector activities and helped put an end to the government's foreign exchange controls that were ruining Austrian trade with the rest of the world.

He taught from 1913 in an unpaid private lectureship , from 1918 as an associate professor at the University of Vienna and from 1934 at the Institut universitaire de hautes études internationales in Geneva . During his time in Vienna, he also held private seminars in his office at the Chamber of Commerce. They enjoyed great interest. Fifty participants took part, including Martha Steffy Browne , Friedrich Engel-Jánosi , Walter Froehlich , Gottfried Haberler , Friedrich August von Hayek , Fritz Machlup , Oskar Morgenstern , Paul Rosenstein-Rodan , Alfred Schütz , Richard von Strigl and Eric Voegelin , all of them Became university professors. The participants of his private seminar partially overlapped with the members of the Vienna Circle around Moritz Schlick . Mises was at the center of Europe's leading philosophers and scientific theorists at the time. He had a close friendship, albeit a short one, with Max Weber . He shared with him the standpoint of the freedom from values of science. Today's Economic Research Institute (WIFO) also goes back to its foundation. Von Mises was one of the leading economic advisers to the Austrian government; his most important colleague at the time was Friedrich August von Hayek.

From Switzerland emigrated von Mises in 1940 in the United States because he felt increasingly threatened in Europe. In the USA, as a consistent liberal during the New Deal phase, he initially had a difficult job and had to live on savings. In 1946 he was granted US citizenship . He taught from 1945 to 1969 - at that time as the oldest teaching professor in the USA - at New York University at an endowed chair. Von Mises was a member of the economically liberal think tank Mont Pelerin Society . Ludwig von Mises is said to have been the model for the comic figure Primus von Quack (English Ludwig von Drake).


Von Mises was initially a supporter of the historical school around Gustav von Schmoller , but after becoming acquainted with the writings of Carl Menger, became a staunch representative of the Austrian school . From 1903 he studied with Eugen von Böhm-Bawerk and expanded his teachings with his book Theory of Money and Circulation .

Theory of money and the means of circulation (1912/1924 expanded)

Ludwig Heinrich Mises in his library

In this habilitation thesis Mises' two open questions from the Austrian School of Economics were answered.

  • Where does money its function as a medium of exchange . Mises was able to show a way out of Menger's circular reasoning. According to Carl Menger , the value of money (its purchasing power ) is determined by supply and demand . The fact that there is demand for it at all (in its function as money), however, presupposes that it already has purchasing power. The value (purchasing power) of money is determined by the supply of money and by the demand for money by its already existing value, its already existing purchasing power. The circular argument is that demand arises because money has purchasing power, and it has purchasing power because there is demand for it. The circle is dissolved by including the time factor . The purchasing power of today's money is derived by market participants from the purchasing power it had yesterday; yesterday from the day before yesterday and so on and on. Purchasing power is therefore handed down. Now, in a second approach, a beginning of the handing-down process must be found. Mises traces this chain back to an origin where money was not yet a medium of exchange, but a very common commodity like any other. Of course, this commodity had to be suitable as an indirect medium of exchange. There were also precious metals in question, in particular gold . Gold was originally held in high esteem as jewelry and a symbol of rank. Money is therefore historically based on gold. It was the exchange ratio of gold for other goods that originally defined the purchasing power of gold money.
  • Mises's second epoch-making discovery was the explanation of business cycles . He proved that in an unaffected free market fluctuations in the purchasing power of money are normal (almost natural), but that the typical extreme economic fluctuations in the form of booms and crashes can be traced back to inflationary money creation by commercial banks , which took place within the framework of a state currency correspond to the will of the governments. Inflation is always a consequence of economic policy ; it is not a natural market phenomenon. These credits were not created through savings as trade credits , but as fiat money ex nihilo , uncovered, as circulating credit within the framework of fractional banking . The additional emissions of capital distort capital flows in such a way that they make the prices of capital goods appear less scarce than they actually are. The result is bad investments in areas whose goods ultimately cannot be bought by consumers. The misallocation of capital not only damages investors, it also weakens economic performance and leads to scarce resources being wasted. Relative impoverishment is the result. In the depression phase, the necessary adjustments to market needs take place in the form of capital destruction and diversion. This goes hand in hand with layoffs, unemployment , relocation of production facilities, migration and reduced incomes .

The business cycle theory of the Austrian School was developed by Mises and further developed by Friedrich August von Hayek .

The Common Economy (1922)

In his book Die Gemeinwirtschaft (later known as Socialism ), he theoretically established as early as 1922 that a purely planned economy could not function because it did not provide any means of determining prices for factors of production . The information function of the market price can no longer lead to an efficient allocation of goods and opportunity costs cannot be taken into account, according to Mises. Without private property and market-based exchange, no prices are formed that indicate the relative scarcity and desirability of goods, and therefore central offices cannot plan efficiently. Therefore, according to his definition , socialist economic systems are not “economic systems” in the true sense, since a comparison of the quantity, quality of goods and efficient use of the scarce means of production is not possible. This argument is based on the assumption that socialist systems do not use monetary systems to value factors of production. This was clearly denied in the course of the Calculation Debate by Oskar Lange . His supporters regard the collapse of the socialist economic systems in the Eastern Bloc 70 years later as confirmation of his prediction.

Von Mises considered capitalism to be a guarantor of human freedom and the only functioning economic system . The modern level of production was only created through free economic activity and only then could it continue. He took the view that state intervention would lead to more and more and ultimately to socialism, which in turn would lead to a radical decrease in general prosperity . (→ oil stain theorem )

Liberalism (1927)

In the 1920s and 1930s von Mises was one of the few German-speaking intellectuals who clung to classical liberalism . In his book Liberalismus from 1927 he tried to justify this logically on a utilitarian basis. Historically, liberalism was the first political direction that wanted to serve the good of all, not the particular classes. Liberalism would not differ from socialism , which also pretends to strive for the good of all, by the goal, but by the means it chooses to achieve this ultimate goal (p. 7).

He described the emergence of fascism in Europe as a movement that turned the indignation of the people over the acts of violence of the Bolsheviks in the Soviet Union into counter-violence. But he warned against seeing it as a model of social development: "The great danger that fascism threatens in domestic politics lies in the belief that it has a great impact on violence" [...] "That is the fundamental mistake , from which fascism suffers and from which it will finally perish ”[…]“ There is no need for foreign policy to call for an endless series of wars in the relationship between people and people by professing the principle of violence, which must destroy all modern morals further execution ".

He went on to write: “It cannot be denied that fascism and all similar dictatorship aspirations are full of the best of intentions and that their intervention has for the moment saved European morality. The merit that fascism has earned with it will live on forever in history. But the policy that has brought salvation at the moment is not of the kind that permanent clinging to it could promise success. Fascism was a stopgap of the moment; to see him as more would be a fatal error. "

Herbert Marcuse used these and other statements by well-known liberals about the emerging fascism to prove his thesis of the "inner relationship between the liberalist social theory and the apparently so anti-liberal totalitarian state theory". The Mises biographer Jörg Guido Hülsmann rejects the claim that Mises excused fascism or classified it as useful with this quote.

Although he personally had quite conservative values, he also advocated the legalization of drugs . He saw the most important means of international peace in the dismantling of all trade barriers ; He also rejected state schools because he saw them as a means of suppressing minorities - especially in what was then Eastern Europe .

Economics (1940) and Human Action (1949)

In 1940 he published the book Economics , which was supposed to summarize the entire teachings of the “Austrian School”. This work was published again in 1949 in the USA under the title Human Action . It was supposed to provide a complete science of human action, which von Mises called praxeology . As the only correct method of this praxeology, which should include economics as a subfield, von Mises saw logical - deductive reasoning. In this way, praxeology can determine objective, a priori true laws. The book was expanded in further editions and finally comprised almost 1,000 pages.

Mises took over the idea of ​​the synthetic a priori from Immanuel Kant that there are true statements about reality that can be derived from simple axioms and logic and therefore no longer need to be tested. But Mises added an important aspect: Kantian mental categories can be understood as finally explored in categories of action. In doing so, Mises bridged the gap in Kantianism, which strictly distinguishes between the mental and the physical.

Almost all economists, including von Mises' own pupil von Hayek , criticized the praxeological method. The view that economic laws can be determined a priori by purely deductive inferences and without empirical observation is rejected by almost all today's economists.

The Bureaucracy (1944)

Among the other works are important: Bureaucracy (dt. The bureaucracy ), in which he set up a theory of bureaucratic economics and demonstrated that bureaucracy is a necessary consequence of state activity, as well as some theoretical writings that dealt with the methodology of economics and in which he tried to justify and defend his praxeology .

Theory and History (1957)

His fourth major work and an outstanding late work is Theory and History . In this philosophical essay, Mises establishes the methodological foundations of the theory of human action ( praxeology ), including economics, and distinguishes it from the methodological foundations of both historiography and the natural sciences . A theory of human action must assume the freedom of will and action, since it is not possible for an outside observer to predict the will of individuals from the physical-chemical realities of social and physical conditions. A theory of human action cannot proceed scientistically, i.e. empirically-inductively, for several reasons. The situations in which action is observed are unrepeatable. No constants that could be used for calculations can be isolated from the complexity of the active factors. The starting point of the investigation lies with the action itself and not in the inner-worldly area. On the other hand, human action is consistently subject to a rational principle: the pursuit of subjectively chosen goals with the intention of improving one's own situation and the choice of presumably more suitable, generally scarce means to achieve this goal. While the subjective choice of target from the perspective of the scientific observer is irrational, i.e. cannot be reduced to objectifiable reasons, the means can be analyzed rationally from a technical point of view. This is the task of a theory of action, especially of economics. The scientific fruitfulness of praxeology is particularly evident in the investigation of economic relationships (for example in the fixing of market prices according to supply and demand). Praxeology not only represents the philosophical-methodological basis of praxeology. It is also the connecting element that connects microeconomic and macroeconomic phenomena and thus enables consistent economic science. For methodological reasons, the economist refrains from examining individual motivations, but takes market participants as they are and their decisions as the starting point for further analyzes which he seeks to understand. In contrast, the historian works with an understanding of the motives of historically significant people. In doing so, he draws on his own prior knowledge of individual motives for action, called von Mises' thymology. This humanities approach thus contains a consistently emphatic component. Psychological (thymological) understanding takes the individual peculiarity and uniqueness of actors seriously. Mises sees the active forces of historical action in the ideas that guide action. But which ideas the actors attach is not determined. From this a historical-philosophical position of openness and contingency is derived. So there are no predetermined goals of an objective history.




  • Susanne Blumesberger, Michael Doppelhofer, Gabriele Mauthe: Handbook of Austrian authors of Jewish origin from the 18th to the 20th century. Volume 2: J-R. Edited by the Austrian National Library. Saur, Munich 2002, ISBN 3-598-11545-8 , p. 934.
  • Bettina Bien Greaves, Robert W. McGee: Mises: Annotated Bibliography . Foundation for Economic Education, 1995, ISBN 978-1-57246-004-1 .


  • Eamonn Butler : Ludwig von Mises: Fountainhead of the Modern Microeconomic Revolution . Gower Publishing Company, 1988, ISBN 978-0-566-05752-6 .
  • Brian Doherty: Radicals for Capitalism: A Freewheeling History of the Modern American Libertarian Movement. PublicAffairs, 2007, ISBN 978-1-58648-350-0 .
  • Israel Kirzner : Ludwig Von Mises: The Man and His Economics . Intercollegiate Studies, 2001, ISBN 978-1-882926-68-8 .
  • Erik Ritter von Kuehnelt-Leddihn : The Cultural Background of Ludwig von Mises. Ludwig von Mises Institute, Auburn 1999 ( PDF )
  • Kurt R. Leube: About Ludwig von Mises. Publishing house economics and finance, Düsseldorf 1996, ISBN 3-87881-103-9
  • Margit von Mises: Ludwig von Mises, On the Value of Better Ideas. Horst Pöller Verlag, Stuttgart, ISBN 3-87959-193-8
  • Carsten Pallas: Ludwig von Mises as a pioneer of modern monetary and economic theory. Metropolis-Verlag, Marburg 2005, ISBN 3-89518-437-3 .
  • Ron Paul : Mises and Austrian economics: A personal view. Ludwig von Mises Institute, Auburn, Alabama 2008
  • Ingo Pies and Martin Leschke: Ludwig von Mises' economic argumentation studies , Mohr, Tübingen 2010, ISBN 978-3-16-150514-0
  • Murray N. Rothbard : Mises, Ludwig Edler von (1881-1973) . In: Steven N. Durlauf, Lawrence E. Blume (Eds.): The New Palgrave Dictionary of Economics . 2nd Edition. Vol. 5. Macmillan and Stockton, London / New York 2008, ISBN 978-0-333-78676-5 , pp. 624-626 .
  • Albert H. Zlabinger: Ludwig von Mises. COMDOK-Verlag, Sankt Augustin 1994, ISBN 3-89351-085-0 .
  • Adele von Mises: Aunt Adele tells . Memoirs, manuscript, 1929–1931. Excerpt in: Albert Lichtblau (Ed.): As if we had belonged . Vienna: Böhlau, 1999, pp. 169–192 [Adele Mises (1858-1937) is the mother of Ludwig and Richard Mises]

Web links

Commons : Ludwig von Mises  - Collection of images, videos and audio files

Individual evidence

  1. ^ Ludwig von Mises: The Free-Market and its Enemies. Publication of the Foundation of Economic Education (FEE), introduction by Richard M. Ebeling; December 2008 Archived copy ( Memento from July 1, 2014 in the Internet Archive ) (FEE)
  2. see: Theory and History, p. 271.
  3. ^ Werner Neudeck: The development of economics in Austria 1918–1938. In: Spiritual life in Austria during the First Republic. Vienna 1986, ISBN 3-7028-0253-3 , pp. 220-230.
  4. cf. Philip Plickert : The last liberal knight in FAZ from September 5, 2013.
  5. Ludwig von Mises: Liberalismus , Jena 1927, p. 41 ff. (PDF; 950 kB)
  6. ^ Herbert Marcuse: Culture and Society I. , Suhrkamp, ​​Frankfurt am Main 1965, p. 23 f.
  7. ^ Jörg Guido Hülsmann : Mises: The Last Knight of Liberalism , Ludwig von Mises Institute 2007. ISBN 978-1-933550-18-3 , p. 560. PDF, online
  8. ^ The Austrian Economics Newsletter 18 (1), Austrians and the Private-Property Society. An Interview With Hans-Hermann Hoppe .
  9. ^ Frankfurter Allgemeine Zeitung : The last knight of liberalism . October 12, 2007