Jeff Deist: Dr. Guido Hülsmann is a Mises Institute Senior Fellow and professor of economics at the University of Angers in France. He wrote the comprehensive biography of Ludwig von Mises, an enormous project that gave him unique insights into the mind, work, and life of this twentieth-century giant. Dr. Hülsmann subsequently also wrote a fascinating book about the ethics of money production, a topic inspired by Mises himself.
We discussed Dr. Hülsmann’s years spent writing the biography, the serendipitous discovery of the Mises papers in Moscow that made the book possible, how Mises endured and kept working as Europe burned, and how his personal sacrifices helped pave the way for Austrian academics working today. Stay tuned.
Ladies and gentlemen, welcome to another edition of Mises Weekends. I’m Jeff Deist, and I’m very happy and pleased to be joined this weekend in the studio by a guest visiting us here at the Mises Institute in Auburn, Dr. Guido Hülsmann.
JD: Good morning. How are you?
Guido Hülsmann: I’m doing very fine. It’s a great pleasure to be at the Mises Institute.
JD: Guido, your book, The Ethics of Money Production, was published just about a year after your Mises biography. Did your time spent studying Mises inspire you to write the book?
GH: In a way, yes, but not in the way you would expect it. This was rather a therapeutic activity, so I could not fully focus on the Mises biography because it was really a lot of work in the sense that I did not really feel as a historian of thought, that it was my main passion as a scholar, which was always economics. So, writing a Mises biography was an unusual activity to learn many things and of course was very instructive. I got much more educated about many questions, but it was really hard work in the sense that often, I didn’t find much pleasure in doing it. I mean, writing the biography provided pleasure, but researching all those things, that was a lot of hard work. And so on the other hand, to just let steam off, I always was carrying on some economic research, so I was writing articles that were published in the Quarterly Journal of Austrian Economics and other scientific journals, but also then the Ethics of Money Production and that was in fact, in a way, it was due to the initiative of one of the supporters of the Mises Institute, George Crispin, whom you might have known.
So George moved with his very charming wife, Theresa, to Auburn at some point in the late 1990s. He had been an engineer for many decades before and so he was constantly present and he showed up at our seminars and at the Mises Summer University and also at the events that we organized for the students that were here. At one point in 2003, he asked me whether I would be willing to run a seminar for him and his friends and I don’t know whether it was the Rotary Club or the Lions Club, something of this sort and I agreed yes, why not, so he wanted to have a seminar in monetary economics.
So I went with them through the history of monetary thought and so I had all the lecture notes already provided and the Mises Institute so graciously accepted to publish it.
JD: Guido, your biography of Mises is entitled, Mises: The Last Knight of Liberalism. Now I know that this was an enormous undertaking, a project that took you many years. Can you go back in time and tell us a little bit about that process?
GH: It is a huge project. Yesterday some students asked me if I would accept to do it again? I said if somebody asked me now I would say no.
JD: No, you wouldn’t do it again.
GH: Knowing how much work was involved, no, and of course it’s very different because now I’m an established scholar, so I have many other things I can do and many other ways I can earn my living, so when Lew [Rockwell] asked me to write a Mises biography, it came just at the right moment of my career because I did not have an academic position and I was not a professor, there was no revenue coming in from giving lectures, teaching students, carrying on research, so it came just about the right point of time.
I wanted to go back into academia and I had obtained two scholarships in 1996, from two German science foundations which are the equivalent to the National Foundation for the Sciences, so very prestigious stuff. With one I went to France and the other one I went to the United States. At just about the same time I heard that I had been accepted for these grants, Lew asked me whether I would be willing to write a Mises biography, because I knew Austrian economics and because I could read the original material in German, especially, and some of it is also in French. The reason why he asked me was because just before, it had become known that the documents that Mises had in his Vienna apartment, which had been confiscated by the Nazis in 1938, had been rediscovered in Moscow of all places. So the Red Army had discovered all this material stocked in Nazi train wagons and at the end of the war and they brought all of this to Moscow.
They were not particularly interested in Mises, but Mises papers were stocked with lots of other similar archives that belonged to regime opponents, so liberals like Mises or communists and various Jewish organizations and so on. The communists brought all of this to Moscow, of course, in the hope that they might find material that they might use against postwar opponents. The first American scholar of an Austrian bent who got wind of this was Richard Ebeling, and he was working himself already for some time on a Mises biography and he went to Moscow, I believe in 1996 and spent some time in the archives and got copies of the material and went there with his wife, who is Russian and so carried this back and then spread the news, there is this great stuff out there. So Lew wished to have someone write a biography of Mises for the Mises Institute and just at about the same time, I had got in contact with the Mises Institute. I had been in touch with them since 1994. They had seen me deliver papers at the conferences in ’95, ’96, so in January of ’97, I think it was, Lew wrote to me an email asking me whether I would be willing to do this. This was like heaven for me because this was my way back into academia, so that’s how it started.
JD: I must say from my perspective, this biography is an enormous contribution to the scholarship of Austrian economics and I really believe that a giant like Mises deserved a more comprehensive biography than what existed when you wrote this book.
GH: Well, I’m happy that you appreciated the work that I did and certainly it fills a gap because no such work was available, but in all fairness it must be said that there are not many persons who have the courage to read a book of more than 1,000 pages, which it has become. The Mises biographies written by Murray Rothbard, by Israel Kirzner, and also Margit von Mises certainly have their place and their good function and fortunately they exist for many readers who like to first have a Readers Digest version or a shorter version.
Then of course, I did something that the others couldn’t do and namely go through all the Mises papers, which was simply not available, especially the pre-World War II papers. Other documents had been available, namely all the material that Mises left at his desk, so his papers from his decades in the United States which his wife sold to Grove City College. So they were on call at Grove City College and could have been consulted by Murray Rothbard, by Israel Kirzner, but they didn’t do this because really as I mentioned before, this is very painstaking archival work. It’s not a great pleasure, especially if you are an economist, it’s not the kind of work that you would usually do, but I mean, I knew when I agreed to write the Mises biography, that that is exactly what I would have to do, so it was an awesome experience because I learned the trade, so to speak, of an historian, at least to some extent.
JD: Guido, let’s talk for a moment about Mises’s first book which he wrote at a fairly young age, The Theory of Money and Credit. I was rereading the introduction to that book just recently and really it’s amazing how prescient it was. It could have been written today and I’m astounded he was able to foresee so much and write that book in 1912.
GH: Yes, it was a great achievement and we at the occasion of the one-hundredth anniversary, the centennial of the first publication of this book, we organized a few years back, a colloquium at the Austrian Scholars Conference in which many colleagues made great contributions. We published the proceedings of that colloquium in a book published by the Mises Institute under the title, Theory of Money and Fiduciary Media, in celebration of the centennial and all of us and of course, if you have a fresh look at a book, you read it again and you come to appreciate this in more detail than you did before and one of the marks of Mises’s writings in a subsequent reading, you always discover things that had escaped your notice previously, which is true for all of his great books.
You read Ma href=”http://store.mises.org/Socialism-An-Economic-and-Sociological-Analysis-P55.aspx”>Socialism, you read Human Action, there’s always something that you didn’t notice the first time and finally you see the depth of his analysis, but on the occasion of this book I spent a lot of time preparing my chapter to this book and what I did was to compare the various editions, the first few German editions and the English edition and also had a look back on the history of monetary economics in the nineteenth century, which I did not do for the Mises biography and so in a way, my chapter for this centennial volume is much more in-depth than what I did in the Mises biography.
And there already, I attempted dealing with The Theory of Money and Credit, which contains I think forty pages or something like this, so it’s already big, just to show how rich his monetary thought and how great the contribution is. And what Mises in fact does is to create a great synthesis of one hundred years of classical monetary thought, that’s what it is. So he reads all the material coming from Adam Smith and great contributions from Adam Smith is to say, we cannot grow rich by having more money, especially not by manipulating the money supply and so wealth comes from elsewhere. It comes from hard work and the division of labor. It comes from a frugal lifestyle. It comes from innovation and so on, but not from the spending of money.
And of course, this brought various responses and all the money cranks, also in the nineteenth century that somehow had a valid point, so they could create cracks in the classical edifice and finally brought it to collapse because Adam Smith’s monetary thought was not well-developed and so someone needed to bring all of these elements together, the valid points and the criticism, but also reinvigorate the true foundations that had been laid by Adam Smith, David Ricardo, and Jean-Baptiste Say and that’s what Mises does in this book. That’s his great achievement and at the same time, he opens further areas for research in the twentieth century, the importance of free banking, the various ways in which monetary manipulation have impoverished us, and the cultural consequences of government meddling with money.
JD: So, the time between Mises’s first book in 1912 and then his magnum opus, Human Action in 1949, saw an enormous amount of changes, especially in Europe. From his perspective he must have thought that the world was on fire and that liberalism was dying in Europe.
GH: It certainly was on fire. The world was crumbling. This famous book by one of Mises’s contemporaries, The World of Yesterday, Stefan Zweig, was a famous writer and still famous today, in which he described the world as it was until World War I and as a contrast to the world that his contemporaries, because he was writing in the interwar period and they noticed a big difference and so of course for us, it’s even bigger and if you read Zweig today and say wow, this is really a completely different world. So Mises saw this world on fire, as you say, and he saw that it collapsed in a much more dramatic way than even we see it today. Of course, if you look at American policy in the past fifteen years and say wow, this is really a very fast degradation, but it is nothing as compared to what Mises witnessed between 1914 and 1949, especially the rise of totalitarian regimes, mass murder everywhere in Germany and Soviet Russia in the various petty Bolshevik regimes that existed at the time, so it was a terrible time. And all the more admirable that he found the courage to carry on, that he found the hope that one day things would be better and that he realized that the intellectual foundations for any renaissance of western civilization would have to be laid and have to be laid by somebody like him, so he filled in the gap that nobody else could fill and he was not discouraged by the fact that few people realized how important his work was at the time.
JD: Guido, talk about Mises’s experience in coming to the US and the rather shabby treatment he received at the hands of American academia.
GH : If I look back at the events of the past twenty years, the career opportunities for Austrian economists, we’ve made huge progress. So today, it is possible virtually for all of our young PhD graduates to find a job at a university or at a college and it is increasingly possible to get jobs in well-ranked universities, well considered universities, it is possible and I think it will also improve in the future. On the other hand, here’s the lesson, which you are probably referring to, the lesson is that there is still a sacrifice. If you’re very brilliant, you will never make it in our present day, you would never make it to very top schools, so there’s always the sacrifice that you have to accept and so you need to be motivated by other things than personal success of a material sort and maybe of glory, and you need to be motivated by the power of truth and the noble dignity of justice.
JD: And of course, Murray Rothbard, like Mises, made tremendous personal sacrifices in terms of his own career, to stay true to his vision of proper correct economics.
GH: Yes. And that, I think is the true motivation of the true scholar. You should carry on for truth and you should think not in the temporal horizon of your own lifespan, but of many generations. That’s the right approach and it’s the approach that can give you great satisfaction, even if your impact in your own lifetime is limited.
JD: Guido, as we wrap this up, I’d just like to raise a point that you raised in the epilogue to your biography of Mises. Like Mises himself, you challenge this mainstream critique that Austrianism is somehow unscientific in its methodology.
GH: Yes. And he stresses even more so than in Human Action, that is the subject matter of two later works that he published, one is Theory and History and the other one is Ultimate Foundation of Economic Science. Theory and History, it’s a wonderful book, first published in 1956 and the subject matter of the book is precisely what is the proper scientific interpretation and what are the limits of the scientific interpretation that we can give to social history? So, up to which point can science, scientific inquiry, rational methods, provide us some foundation and true insight to knowledge and when does it start to become fishy, when does it start to become — to be based on pure speculation and on ideology. And precisely, the problem of positivism is it transgresses the boundaries of reason, especially in the field of human action and the interpretation of society and therefore it opens the doors to ideology.
JD : Dr. Guido Hülsmann, thank you for your time this weekend. It’s great having you here and have an excellent summer. Thanks, folks. Tune in next week.
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