On the Manipulation of Money and Credit, by Ludwig von Mises, translated by Bettina Bien Greaves, edited by Percy L. Greaves, Jr., Dobbs Ferry, N.Y.: Free Market Books, 1978, 296 pp., $14.
The Spirit of the Austrian School; Why Socialism Always Fails; Liberty and Property; by Ludwig von Mises, Alexandria, Va.: Audio Forum, 1978, $12.95 each (tapes).
Ludwig von Mises, 1881-1973. An internationally renowned economist, recognized leader of the Austrian school, Mises came to be identified as the most consistent and forthright exponent of free-market capitalism, at a time when his profession seemed to be rejecting it as a ghastly failure. When World War II broke out, Mises, just short of 60 years of age, had to his credit a long and imposing list of famous books and monographs in the German language—list that began in 1902.
Coming to the United States in August 1940, Mises encountered a discouraging wall of professional coldness, if not outright hostility. He was unable to secure the academic position which his prominence surely deserved. He was the outspoken champion of laissez faire at a time when the tide of public and professional opinion was running strongly in its disfavor; he was the mordant critic of inappropriate mathematical and econometric methods in economics at a time when the profession saw its very future in the increased sophistication offered by these techniques.
Despite all this discouragement, Mises continued to write and to teach until an almost incredibly old age (he retired from teaching at New York University in 1969). And gradually Mises's influence came to be felt in the United States. He made a profound impression upon a small group of young academicians and upon a wider group of educated and intelligent laymen. Over the years his English-language works, and especially his monumental treatise Human Action, became works widely read, if not yet in academic economics circles, at least among a broad group of discerning readers in the United States and elsewhere.
Since Mises's death in 1973, interest in his work has undergone an extraordinary revival. His ideas are being discussed—by scholars and laymen alike—in seminars and conferences around the country. His works are even included in the reading lists of numerous graduate courses in economics. A growing group of young "Austrian" economists is pursuing original research and writing along lines that would have gladdened Mises's heart.
In this climate of renewed interest in the Misesian approach to economics, it is natural to find a vigorous demand for any work of Mises not yet available and for any material relating to Mises's life. This interest has found gratifying response. Mrs. Mises's fascinatingly warm and lively account of her life with Mises has been greeted with great enthusiasm. Mises's own hitherto unpublished Notes and Recollections (translated and edited by Professor Sennholz) has been widely sought after. A number of Mises's major works have been republished; moreover, some of his earlier, hitherto inaccessible German works have been made available to English-speaking readers in new translation; various taped recordings of lectures given by Mises are now available. This review discusses the welcome appearance of a collection of fresh translations and of three Mises tapes.
On the Manipulation of Money and Credit offers the translation of a major 1928 Mises monograph ("Monetary Stabilization and Cyclical Policy"), translations of several shorter papers by Mises (including the notable 1923 essay "Stabilization of the Monetary Unit—From the Viewpoint of Theory"), and a hitherto unpublished 1946 paper by Mises. This collection of papers is prefaced by a lengthy introduction by the editor, Percy L. Greaves, Jr., and followed by an epilogue consisting of five of the editor's own papers published originally between 1954 and 1977. A bibliography of Mises's contributions on the subjects of money, credit, and banking concludes the volume.
The editor of the volume, Percy L. Greaves, Jr., and the translator, Bettina Bien Greaves, are well known as among the very staunchest disciples of Mises. Both were long-time members of Mises's New York University seminar; both came to be associated extremely closely with their beloved teacher in the later years of his life; and they have virtually dedicated their lives to the study and dissemination of his teachings. It can be stated without fear of contradiction that they have poured into this volume all their love for their great mentor, all their loyalty and commitment to the propagation of his work.
The volume is a monument to their meticulous and scholarly attention to the slightest detail—whether relating to terminological precision, to the accuracy of citations, or to capturing nuances of meaning in translation. The translator appears to have successfully overcome all the obvious obstacles confronting a would-be translator of so profound a writer as Mises. The editor has provided us with all the background and footnote material necessary for the proper understanding of Mises. This includes copious references to Mises's earlier and later works, clarification of allusions, as well as elucidation of difficult passages. The result is a volume that should in many ways serve as a model for similar efforts. Yet, despite my wholehearted admiration for all the scholarly labors invested in it, I feel bound in honesty to register certain serious reservations concerning the final product placed before the public.
Mises was an uncompromising defender of the free market. In this role his work was in large part naturally, and deliberately, directed to the broad public of intelligent laymen. In addition, as a result of the inhospitable intellectual and professional climate within which Mises pursued his work in the United States, he found himself writing and speaking more and more for and to the educated public and less and less for and to his professional colleagues. For better or for worse, defenders of Misesian ideas—and Mises himself—found themselves engaged, not in controversies within the economics profession, but in polemics against the economics profession. Intellectual honesty required no less; in many senses Mises's disdain for the "establishment" of professional economics must be judged a rare and shining example of academic integrity.
Yet this circumstance tended—most unfortunately in my opinion—to overshadow an aspect of Mises's character that deserves to be recognized and understood. Mises was not simply a cogent defender of the free market. He was a defender of the market economy as a result of his work as a disinterested scientist, as a member of the international community of scholars whose intellectual values he was proud to share.
This facet of Mises emerges clearly in "The Spirit of the Austrian School," a tape that records an informal talk given by Mises to his faculty colleagues at NYU in the very early '60s. In the talk, Mises reminisced about his years in Vienna, and especially about the heyday of his private seminar. I recall the occasion rather vividly. Professor Hayek was present, and the talk offered a rare opportunity to hear Mises discuss, publicly and charmingly, his own life and work in earlier years. In the talk, he was perhaps proudest of his contributions to the internationalization of science, to the development of scholars (who had been members of his seminar) for the enrichment of economics (and other disciplines) all over the world. Mises's quiet pride in his illustrious students (including those with whose ideas he was, most emphatically, unable to agree) is heart-warming. One senses from this talk how deeply Mises missed the lively interaction of scholarly minds, which he had enjoyed in Vienna; how much he missed the thrust and parry of conflicting opinion among colleagues who could agree on perhaps little else than that they were fellow-searchers in the quest for truth.
All this is of relevance to the Greaves volume. Since Mises's retirement from NYU in 1969 (and more particularly since his death in 1973), the climate in professional economics has changed significantly. No longer are Mises's views on scientific method in economics, or on economic policy, treated with cold disregard (or worse). Austrian economics, in which Mises's work occupies the place of honor, is once again coming to be taken seriously. The free and open professional discussion and extension of his work, for which Mises yearned but which was denied to him, has once again become a genuine possibility.
In this climate, the appearance of hitherto inaccessible work by Mises—especially of so important and seminal a contribution as his 1928 monograph—could serve as a welcome opportunity for renewal of scholarly interest in Mises's pioneering contributions to the monetary ("Austrian") theory of the trade cycle. As the editor implies in his introduction, the papers made available in this volume provide material for an exploration of the roots of Hayekian cycle theory and for an analysis of its points of disagreement with that of Mises, upon which—even after the recent brilliant book-length study by Professor O'Driscoll—much still remains to be written. Yet it must be stated, with regret, that this volume is not likely to encourage such efforts.
This must, sadly, be judged to be the case because the volume has been edited—understandably, perhaps, yet nonetheless unfortunately—as if Mises's views are to be treated with the reverence reserved for unquestioned truth. Now in my opinion—an opinion on which I have had frank and helpful exchanges of views with the Greaveses—this will simply not do. If Misesian economics is once more to be treated with the scientific respect it deserves, it must be analyzed, questioned, and challenged. It must be compared and contrasted with the work of other economists, Austrian or otherwise. It must be treated, not as a body of established truths, to be mastered as if by rote before engaging in further work, but as the contribution of a brilliant thinker to the rich background of economics against which future research can be fruitfully undertaken.
This approach to the study of Mises may appear novel to those of us who studied under Mises when professional discussion of his work was well-nigh unthinkable. Yet such an approach is surely the only route to the long-run vitality and survival of Misesian insights. There can be little doubt that this approach would, all in all, have given our "Professor" the greatest pleasure.
A further paragraph or two are necessary to comment briefly on the tapes. The title chosen for each of the tapes seems to have been somewhat arbitrarily (and, for one or two of them, even somewhat misleadingly) selected. The most valuable of the tapes, "Liberty and Property," is a Mt. Pelerin Society address given in the '50s. It gives us Mises as we remember him most strongly—the assured and polished academic lecturer spelling out a scholarly defense of capitalism, at once persuasive, penetrating, and most powerful. "The Spirit of the Austrian School" is, as mentioned earlier, a talk reminiscing in delightful fashion about Mises's intellectual life and work during the 1920s.
It is, frankly, painful to have to comment on the third tape (incorrectly titled "Why Socialism Always Fails"). This records a lecture given by Mises at a very advanced age. For those fortunate enough to have been present on that memorable occasion, it must have been thrilling indeed to hear the great Mises himself, in his 89th year, explain the role of voluntary exchange in social processes. Yet the effect of the tape is most unfortunate. Mises's voice is frail; his facility with language appears flawed. Although at times (especially during the question period) Mises displays flashes of his characteristic brilliance and wit, the overall impression seems to suggest that its sale commercially is to be regretted.
Israel Kirzner, who teaches at New York University, is the author of Competition and Entrepreneurship and The Economic Point of View.
This article originally appeared in print under the headline "On the Manipulation of Money and Credit; The Spirit of the Austrian School; Why Socialism Always Fails; Life and Property".