Mises at the Outset of the Thirties

Mises' place in the economics profession would seem to have become firmly established by the end of die 1920s. He was the author of a number of books, including two major works (Theory of Money and Credit and Socialism) that would still be in print at the end of the century. His "influence, as teacher and mentor," was, mainly as a result of his Privatseminar, "enormous."16 Nor was this influence confined to his own country. In Rothbard's words: "such were Mises' remarkable qualities as scholar and teacher that...his Privatseminar became the outstanding seminar and forum in all of Europe for discussion and research in economics and the social sciences."17 In a tribute to Mises presented by Hayek in 1956 (in honor of the fiftieth anniversary of Mises' doctorate from the University of Vienna) he referred to the "profound impression" which Mises' Socialism had made on those who were young scholars, whether in England, Germany, Austria, or Sweden, during the twenties. That work, Hayek wrote, was on "political economy in the tradition of the great moral philosophers, a Montesquieu or Adam Smith, containing both acute knowledge and profound wisdom. I have little doubt that it will retain the position it has achieved in the history of political ideas. But there can be no doubt whatever about die effect on us who have been in our most impressible age. To none of us...was the world ever the same again. If Röpke stood here, or Robbins, or Ohlin...they would tell you the same story..." (mywm, 189). By 1930, Mises had published an additional stream of books and monographs, further amplifying his views on such phenomena as inflation, the trade cycle, the ideal of the (classi cally) liberal society and the dangers of interventionism. Virtually all his later positions on economic theory, economic methodology, and economic policy had been clearly articulated by 1930.

Yet the same Hayek who spoke so glowingly of die international impact of Mises' work on socialism was able to state that, as of 1931, "Mises was still a relatively minor figure confined to a particular field [B]y the early 1930s, Mises was internationally—so far as he was known at all, which was limited—known to people like Robbins as a man who had done a distinctive contribution to the theory of money, developing Menger and developing most effectively his criticism of socialism."18 To be sure, this statement was an oral, off-the-cuff response to a rather persistent interviewer (and the statement continues, in fact, to include several inaccuracies concerning dates of later works of Mises). Yet the view expressed should not be declared flatly inconsistent with the more flattering view of Mises' influence expressed in Hayek's tribute quoted above. The simple truth is that, for all his renown in the German-speaking (and German-reading) segment of die economics profession, Mises' books and papers were virtually unknown to the vast majority of the international profession, for whom die only language of relevance was English. It was only in die thirties that, as a result of the initiatives of Lionel Robbins, die two major books of Mises were translated into English. These translations would establish Mises as an internationally known theorist in die U.K. (and, to a lesser extent, in the U.S.), perhaps with the help of the circumstance that he was known as the mentor of Friedrich Hayek, whose star rose phenomenally in British economics during the early thirties.19

It may be suggested that there was a special factor that was to help establish the prominent, international professional reputation that Mises had acquired by die end of die thirties in the economics profession. This factor was die widespread recognition by 1940 that Mises' views on economic method and economic policy, as well as on economic theory itself, were thoroughly out of step with the new ideas that were then asserting themselves. Distinctiveness, for better or for worse, helps promote recognition. Although most of Mises' later positions had already been dearly articulated, at least in die German language, before 1930 (and certainly by 1933), these positions were not yet wen, either by Mises or by others, as setting Mises apart from his contemporaries. Mises' distinctiveness had not yet been firmly established by 1930. In feet it was in 1932 that Mises referred approvingly to a statement by Oskar Morgenstern that the major contemporary schools of economic thought, "the Austrian and the Anglo-American Schools and School of Lausanne...differ only in their mode of expressing the same fundamental idea and that they are divided more by their terminologies and by peculiarities of presentation than by die substance of their teachings" (ep, 214).

Mises himself was clearly not yet aware of how thoroughly his own views on the method and substance of economic theory differed from what was to emerge as the new mainstream consensus. Quite apart from the extraordinary influence which John Maynard Keynes was to exercise on the profession toward the end of die decade, those years of "High Theory" (as Shackle has called the thirties) placed mainstream price theory on a path pointing dramatically away from the direction that Mises was, more and more emphatically, to take in the years ahead. By 1930 the stage was set, as it were, for Mises to emerge with all the unique methodological and substantive distinctiveness that was to render him so unfashionable and so unpopular a figure in the post-Woiid War II economics profession. It will be these elements of methodological and substantive distinctiveness that will occupy us during much of the rest of this book.

0 0

Post a comment