Ludwig von Mises
Ludwig von Mises (1881-1973) was born in the city of Lemberg (now Lvov) in Galicia, where his father, a Viennese construction engineer working for the Austrian railroads, was then stationed. Both Mises’s father and mother came from prominent Viennese families. He entered the University of Vienna at the turn of the century as a leftist interventionist. There he discovered Principles of Economics by Carl Menger, the founding work of the Austrian School of economics, and was quickly converted to the Austrian emphasis on individual action rather than unrealistic mechanistic equations as the unit of economics analysis, and to the importance of a free-market economy. Mises became a prominent post-doctoral student in the famous University of Vienna seminar of the Austrian economist Eugen von Bohm-Bawerk .
Over his many years of studying economics von Mises developed an integrated, deductive science of economics based on the fundamental axiom that individual human beings act purposively to achieve desired goals. That led him to affirm that the only viable economic policy was one of free markets and the unhampered exercise of the right of private property, with government strictly limited to the defense of person and property within its territorial area.
Mises’ book Socialism (1922) argued that socialism would be disastrous for a modern economy because the absence of private ownership of land and capital goods prevents any sort of rational pricing, or estimate of costs, and that government intervention, in addition to hampering and crippling the market, would prove counter-productive and cumulative, leading inevitably to socialism unless the entire tissue of interventions was repealed. He strongly favored a gold standard in monetary policy. He went to argue that government intervention could not work, and would tend to lead inevitably to socialism. Mises elaborated these insights in his Critique of Interventionism (1929), and set forth his political philosophy of laissez-faire liberalism in his Liberalism (1927).
Mises emigrated to the United States in 1940. His first two books in English were Omnipotent Government (1944), that was the first book to challenge the then-standard Marxian view that fascism and Nazism were imposed upon their nations by big business and the “capitalist class.” His Bureaucracy (1944) explained why government operation must necessarily be “bureaucratic” and suffer from all the ills of bureaucracy.
Mises’s most monumental achievement was his Human Action (1949), the first comprehensive treatise on economic theory written since the first World War. Here Mises elaborated an integrated and massive structure of economic theory on his own deductive, “praxeological” principles. Finally, in 1957 Mises published his last major work, Theory and History, which refuted Marxism and historicism, and set forth his principles for a free society and economy.
His U.S. translator Prof. Leland B. Yeager wrote in his foreword to Nation, State and Economy (1919, 1983 ed.) that “Mises was emphatically not a conservative. His books rail repeatedly against political and economic privilege. He championed political democracy as well as a free market economy. He admired democratic revolutions against hereditary and authoritarian regimes; he sympathized with movements for national liberation and unity.”
Hans-Herman Hoppe, Mises’ leading follower in the United States, wrote that “Mises had a unique idea of how government should work. To check its power, every group and every individual, if possible, must have the right to secede from the territory of the state. He called this the right of self-determination, not of nations as the League of Nations said, but of villages, districts, and groups of any size. In Liberalism and Nation, State, and Economy, he elevates secession to a central principle of classical liberalism. If it were possible to grant this right of self-determination to every individual person, he says, it would have to be done. Thus the democratic state becomes, for Mises, a voluntary organization.”
Although he never wrote at length explicitly advocating decentralism, Mises’ theoretical fondness for secession into smaller units of like-minded people with a common language could be viewed as the ultimate in decentralism. The following are brief excerpts from his works: