Ludwig von Mises (September 29, 1881 – October 10, 1973) was a renowned economist who pioneered the development of what is known as the Austrian School of Economics. In 1949, Mises published his seminal book, “Human Action,” which is primarily a study of human action and behavior (“praxeology”) and its application to economic theory. “Human Action” is a foundational work in the annals of Austrian economics and libertarian thought.
He earned the living most people associate with his name only late. Mises took his doctorate at the University of Vienna in 1906 and earned his keep as an economic adviser at the Vienna Chamber of Commerce, teaching at the university without pay. The Theory of Money and Credit, his first major book, appeared in 1912, and a 1920 essay on economic calculation under socialism made his name in European debates. Through the twenties and early thirties his private seminar met every other week in his Chamber of Commerce office and drew the young economists who later carried his questions across the Atlantic. He left Austria for a professorship in Geneva in 1934, then sailed for New York in 1940 and started over at fifty-eight. Human Action, the summation of his work, appeared in 1949, and he taught at New York University into his late eighties.
Mises was a staunch defender of free market capitalism and the protection of private property rights. During the height of the Cold War, Mises was heavily critical of socialist, communist, and central planning economies. He argued that only a market economy driven by the protection of private property and individual decisions can efficiently allocate resources to their most valued use and spur innovation. Mises was also a proponent of the gold standard and the concept of “sound money.” He warned that continued government intervention in the economy and devaluing the currency through constant “money printing” would have significantly negative inflationary impact on the economy.
Mises left an enduring legacy that has seen a resurgence in recent years with the return of inflation to developed market economies, increased government intervention, and the apparent return to favor of socialist policies. In addition to pure economics, Mises’s work has had a large influence on the concepts of individual freedom and the role of government in society. He is frequently cited by politicians, business leaders, and scholars. As a testament to his legacy, the Mises Institute was founded in 1982 and continues to be an influential think-tank supporting the Austrian School of Economic ideals and promoting free market capitalism.
Core Ideas
- Start with the acting person. Only the individual thinks, reasons, and acts; every institution and price is the residue of individual choices.
- Value lives in the valuer. Nothing is worth anything in itself; worth comes from how a person ranks it against what else he could have.
- Prices are the missing instrument. Without private owners trading at money prices, no one can calculate what a plan costs or compare one way of producing a thing with another.
- Serve the buyer or lose the office. The entrepreneur’s profit is the consumers’ verdict on how well he gave them what they asked for.
- Ideas move first. The beliefs people accept today become the institutions they live under tomorrow, which is why arguments matter more than decrees.
Ludwig von Mises Quotes
“All rational action is in the first place individual action. Only the individual thinks. Only the individual reasons. Only the individual acts.”
— Socialism (1922)
“Value is not intrinsic; it is not in things. It is within us; it is the way in which man reacts to the conditions of his environment.”
— Human Action (1949)
“Economics is a living thing—and to live implies both imperfection and change.”
“He who is unfit to serve his fellow citizens wants to rule them.”
“The Marxians love of democratic institutions was a stratagem only, a pious fraud for the deception of the masses. Within a socialist community there is no room left for freedom.”
“All people, however fanatical they may be in their zeal to disparage and to fight capitalism, implicitly pay homage to it by passionately clamoring for the products it turns out”
“It is vain to fight totalitarianism by adopting totalitarian methods. Freedom can only be won by men unconditionally committed to the principles of freedom. The first requisite for a better social order is the return to unrestricted freedom of thought and speech.”
“The worst thing that can happen to a socialist is to have his country ruled by socialists who are not his friends.”
“The champions of socialism call themselves progressives, but they recommend a system which is characterized by rigid observance of routine and by a resistance to every kind of improvement. They call themselves liberals, but they are intent upon abolishing liberty. They call themselves democrats, but they yearn for dictatorship. They call themselves revolutionaries, but they want to make the government omnipotent. They promise the blessings of the Garden of Eden, but they plan to transform the world into a gigantic post office. Every man but one a subordinate clerk in a bureau. What an alluring utopia! What a noble cause to fight!”
— Bureaucracy (1944)
“It is not the fault of the entrepreneurs that the consumers, the people, the common man, prefer liquor to Bibles and detective stories to serious books, and that governments prefer guns to butter. The entrepreneur does not make greater profits in selling bad things than in selling good things. His profits are the greater the better he succeeds in providing the consumers with those things they ask for most intensely.”
— Human Action (1949)
Ludwig von Mises Books
“Human Action: The Scholar’s Edition” – by Ludwig von Mises. The 1949 summa: the whole theory of human action in one vast treatise, best read with a pencil and no hurry.
“The Theory of Money and Credit” – by Ludwig von Mises. His first major book from 1912: money, banking, and the trade cycle built up from individual choice.
“Liberalism: The Classical Tradition” – by Ludwig von Mises. The short way in: his 1927 statement of classical liberalism in a single sitting, against Human Action’s mountain.
“The Best of Ludwig von Mises” – by Ludwig von Mises, edited by Jeffrey A. Tucker. A gentler on-ramp of essays and excerpts to try before the big books.
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