Ludwig Von Mises's Human Action: A 50th Anniversary Appreciation

Article excerpt

Fifty years ago, on September 14, 1949, Yale University Press released a major new work-Human Action by the Austrian economist Ludwig von Mises.1 The following week, in his regular Newsweek column, Henry Hazlitt referred to this book as "a landmark in the progress of economics.... Human Action is, in short, at once the most uncompromising and the most rigorously reasoned statement of the case for capitalism that has yet appeared. If a single book can turn the ideological tide that has been running in recent years so heavily toward statism, socialism, and totalitarianism, Human Action is that book. It should become the leading text of everyone who believes in freedom, individualism, and . . . a free-market economy."2

It is useful to recall the state of the world when this book first appeared. The Soviet system of central economic planning had been imposed by Stalin on all of eastern Europe. In Asia, Mao Zedong's communist armies were just completing their conquest of the Chinese mainland. In western Europe, many of the major noncommunist governments were practicing what the German free-market economist Wilhelm Ropke called at the time "national collectivism"-a "combination of repressed inflation, collectivist controls, `full employment,' exchange control, state monopolies, bilateralism, subsidies, fiscal socialism [and] `cheap money' policies." In the United States, government policy was guided by what Hazlitt referred to in Newsweek a few weeks before his review of Human Action as "ultraKeynesian ideology."3

In Human Action, Mises opposed every one of these trends and policies, plus many others in contemporary social philosophy, philosophy of science, and economic theory and method. He challenged the foundations, logic, and conclusions of every facet of twentiethcentury collectivism. As E A. Hayek explained, in reviewing the German-language version of the book:

There appears to be a width of view and an intellectual spaciousness about the whole book which are much more like that of an eighteenth-century philosopher than that of a modern specialist. And yet, or perhaps because of this, one feels throughout much nearer reality, and is constantly recalled from the discussion of technicalities to the consideration of the great problems of our time.... It ranges from the most general philosophical problems raised by all scientific study of human action to the major problems of economic policy of our own time.4

And as his American student and friend Murray N. Rothbard pointed out, "Human Action is it: Mises's greatest achievement and one of the finest products of the human mind in our century. It is economics whole . . . and provided a way out for the discipline of economics, which had fragmented into uncoordinated and clashing sub-specialties. In addition to providing this comprehensive and integrated economic theory, Human Action defended sound, Austrian economics against all its methodological opponents, against historicists, positivists, and neo-classical practitioners of mathematical economics and econometrics. He also updated his critique of socialism and interventionism."5

Early Career

Ludwig von Mises was born in Lemberg, Austria-Hungary, on September 29, 1881. Though originally interested in history, he turned to economics shortly after entering the University of Vienna in 1900 and reading Principles of Economics by Carl Menger, founder of the Austrian school of economics. While at the University he studied with Eugen von Bohm-Bawerk, the person perhaps most responsible for establishing international respect for the Austrian school. In 1906 Mises was awarded a doctoral degree in jurisprudence (at that time economics was studied as part of the law faculty at the university).

Beginning in 1909 Mises worked at the Vienna Chamber for Commerce, Trade, and Industry as an economic analyst within its department of finance. In this capacity he evaluated and made recommendations about various legislative proposals in the areas of banking, insurance, monetary and foreignexchange policy, and public finance. …