Ludwig Von Mises: Economic Truths that Endure
Posted by Orrin Woodward on April 13, 2013
I am in the midst of an ongoing study on the origins of society and continue to be blown away by the works of the Austrian economist, particularly Ludwig Von Mises. Few scholars have thought as deeply and as intelligently on subjects as diverse and yet so important as Mises. Not surprisingly, Mises was featured in my All-Time Top 100 Leadership Book RESOLVED under the courage category. I will be sharing a little of my research on society and what it requires to keep society free on my LeaderShift book tour. Oliver DeMille and I cannot wait to see everyone. I am attaching an article from one of Mises’ former students describing this great man.
Sincerely,
Economic Truths That Endure
By Alfred Tella
It’s been thirty years since my graduate school teacher of economic theory died, and as I again look over his writings that spanned more than a quarter century, I am reminded how relevant they are to the issues of our day. Some truths are enduring.
He was a slight man with big thoughts. Original thoughts. He was a visionary. When he entered the classroom the students stood up out of respect. He believed economics was a science subject to laws, which he revealed with utter clarity and impeccable logic. A champion of free markets and individual liberty, he extended neoclassical theory in important new directions. He taught economics not as a narrow discipline, but as a comprehensive system rooted in philosophy, human nature, and social structure.
He revealed the requirements of prosperity and freedom, the pitfalls of interventionism, the intricacies of the price system, the workings of competition and the market process, and the social benefits of private property and free trade. He explained the causes of inflation and depression and the role of money, entrepreneurship and discovery in a dynamic context. Not least, his work was a devastating reply to the theories of Karl Marx.
His lessons remain a guide to present and future economic policies. Here are a few of his words.
“If taxes grow beyond a moderate limit, they…turn into devices for the destruction of the market economy. The more taxes increase, the more they undermine…the system of taxation itself.”
“The long-term and semi-public credit is a foreign and disturbing element in the structure of the market society. The financial history of the past century shows a steady increase in the amount of public indebtedness. …Sooner or later all these debts will be liquidated in some way or another, but certainly not by payment of interest and principal according to the terms of the contract.”
“Selfish group interests may impel a man to ask [the government] for protection for his own firm. …The only effect of protection is to divert production from those places in which it could produce more per unit of capital and labor expanded to places in which it produces less. It makes people poorer, not more prosperous.”
“Profits…benefit the common man twice. First, in his capacity as a wage earner, by raising the marginal productivity of labor and thereby real wages…. Then later again, in his capacity as a consumer when the products manufactured with the aid of the additional capital flow into the market and become available at the lowest possible prices.”
“Politicians…pretend that their own approach to economic problems is purely practical and free of dogmatic prepossessions. They fail to realize that their policies are determined by definite assumptions about causal relations, i.e., that they are based on definite theories.”
A few of my old professor’s pronouncements went down hard with his students. I was fascinated with the blossoming of quantitative economics, but he would say: “There is no such thing as quantitative economics. All economic quantities we know about are data of economic history.” I sighed and went on to be thoroughly seduced by econometric modeling.
My teacher was a great man, a person of uncompromising intellectual integrity, a giant of the Austrian school of economics. He authored many pioneering books on subjects ranging from the theory of money and credit to socialism to economic epistemology and influenced a generation of economists. If his name is not a household word, his ideas have permeated popular thinking and become part of the conventional wisdom. His master work was Human Action (1949), which enlarged the field of economics by presenting a general theory of choice in all human action. It should be on every congressman’s bookshelf. Today there is an institute and university located in Auburn, Alabama which bear his name and nurture his legacy.
I am grateful to and miss my old New York University professor, Ludwig von Mises.
——-
Alfred Tella is former Georgetown University research professor of economics.
17 Responses to “Ludwig Von Mises: Economic Truths that Endure”
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AR said
I READ THE RESOLVED BOOK … WHAT HAS IMPRESSED ME ABOUT THIS MAN FROM AUSTRIA WAS THE FACT THAT HE LEFT HIS OWN COUNTRY, AT A CERTAIN AGE, TO STAY COMMITTED TO HIS BELIEFS … HE IS A GREAT EXAMPLE OF COURAGE … HE IS IN, IN MY MIND, A TRUE MAN …
I ASSUME THAT HIS DREAM INCLUDED A SOCIETY WHERE ALL PEOPLE COULD LIVE A PROPER LIFE …
Chad Waters said
Orrin,
There are so many other leaders with the thoughts you have and you book Leadershift is going to bring them out of silence and help us on the fight to fixing economys and people alike around the world!
See you thursday in London Ont!
Bill Eder said
Thanks for this blog and a special thank you to you and Oliver for “Leadershift”. Just three more days and we get to read the whole book Alleluia!!
Hope to see you in Madison on the 16th. God bless.
Tim Marks said
Orrin
If taxes grow beyond a moderate limit, they…turn into devices for the destruction of the market economy. The more taxes increase, the more they undermine…the system of taxation itself.”
Sumes up one our biggest issues with our economy for sure!
Great post!
Thanks
Tim
chris gornik said
It’s very encouraging that there is a school which shares the knowlegde of how important a free market system is. Thanks for writing and sharing this information. I look forward to each and every post and wait in anticipation for the email to arrive. God Bless you Orrin and please keep doing what your doing.
matt mielke said
I’m so thankful for Von Mises’ teaching in economics. it is inspiring how one man made the complex simple in the field of economics.
Kevin Hamm said
Thank you for this tribute to a great thinker,
I remember well your earlier blogs about him and of course your mention of him in Resolved. I look forward to the freedom that will enable me to actually study him. See you on Tuesday at Barnes and Noble Madison.
Philip Brittain said
Awesome info! Looking forward to much more on these issues Orrin! Thank you.
David Nelson said
Hello Orrin,
You talking of Ludwig Mises influenced me to start reading Ludwig Mises book Planned Choas. It’s an easy book to read and well written.
Sincerely,
Dave Nelson
Orrin Woodward said
Dave, Most excellent! thanks, Orrin
John Burns said
Leave it to Mises to put together the pieces. Thanks Orrin, can’t wait to see you in Columbus!
J & P Harteis said
Oh to entice our culture to desire the truth, & the hunger to seek it out! We need to get LeaderShift into as many hands & minds as possible, as quickly as possible! Thanks for sounding the warning, Orrin, & alerting the masses! God bless……….
Angie Ballah said
I love the portion of resolved that highlights the courage of Mises! Thank you for a further glimpse into his life!
RussRamey6 said
Looking forward to seeing you Friday in Columbus, getting my copy of your new work Leadershift! Bravo! I have to get free so I can re-read my works from Hayek, Von Mises, Friedman, Schumpeter, etc. On the shoulders of giants! Bravo!
Philip Brittain said
Orrin, I just finished LeaderShift! What an awesome book!
This book is an absolute work of genious! It is a brilliant mix of fable and truth! I love the ending… I won’t spoil it for those who have not read it. I am looking forward to the next book, but even more so, I am eager to contiue my own education and have become more involved in my own local governmental affairs in last couple of months. I have been meeting some of the political players in my area and have been networking to learn as much as I possible can.
In addition to all of this I have been building (with our local team) a stronger, larger team that is experienceing monster growth in each person’s life which will soon result in massive team growth. We have momentum building and God is honoring the work and prayers of the dedicated team members.
Thank-You for the work you have done to prepare the way for the rest of us! May God continue to bless you and your efforts as we prepare for the LeaderShift!
Randy Robson said
A great article of a great man, by a great man! Thanks Orrin.
Marsha Ward said
Orrin, thank you for sharing this great tribute to Ludwig von Mises. I enjoyed reading about him in your book Resolved: 13 Resolutions For Life. It gives me great hope following an amazing leader like you, who is learning from great men like Ludwig von Mises. Thank you for sharing your wisdom.