Ludwig von Mises was an influential economist who advocated for the importance of the individual in economics and the gold standard. He was critical of socialism and believed in free trade. He taught at the University of Vienna and later at New York University, where he was not paid by the university but by supporters of his work. The Ludwig von Mises Institute was created in 1982 to promote the Austrian school of economics.
Ludwig von Mises is credited with broadening the concept of Austrian economics and developing the Misesian Doctrine. Born in 1881, he lived to be 92. In his long life, he had a great influence as a famous economist and economics teacher, although not everyone agreed with his theories. At times he has been ostracized, to the point of being “kicked out” of paid teaching positions.
At a young age, Ludwig von Mises studied at the distinguished University of Vienna and learned Austrian theory there, which stresses the importance of the individual rather than artificial controls over the economy. In his early twenties, von Mises wrote the “Theory of Money and Credit. In doing so, he accomplished what was thought to be nearly impossible by merging the two theories that are known in today’s parlance as macroeconomics and microeconomics.
Simply put, he believed that no civilization could thrive on the addition of an ever-growing unsecured currency. Ludwig von Mises advocated the gold standard, or an equivalent method of backing up currency. Regarding credit, von Mises explained that the increase in credit offered by banks could only lead to inflation, recession and depression. He also believed in free trade as opposed to government interference and protectionism.
Ludwig von Mises wrote extensively on economics in his lifetime and taught at the University of Vienna. At the same time, he was an official adviser to the Austrian government on economic matters and was responsible for turning back Austrian inflation. Fearing the possibility of oppression due to his Jewish heritage, Ludwig von Mises moved to Switzerland and later to New York City.
He was a force in expanding libertarianism, which embraces a true free-market, laissez-faire model of economics. Ludwig von Mises called socialism a failure and believed it could never succeed. His critical view of socialism was no secret and he compared the Soviet system to the US system, citing capitalism as superior.
Later, theories developed by Ludwig von Mises and a follower named Friedrich Hayek – who won a Nobel Prize for expanding these works – stood in stark contrast to Keynesian theory. Keynes promoted a mixed economy, or a mixture of capitalism and socialism. It looked new and interesting. It gained popularity, yet Mises believed that government interference would always ultimately lead to full-blown socialism, a model that had never been viable before.
For over twenty years, after emigrating to the United States, Mises worked as a professor at New York University. In all those years he remained a “visiting” professor and did not get any salary from the University. His salary was paid by friends and businessmen who supported his work, despite the Keynesian Revolution a few years before his arrival in New York. Those who believed that “a little” socialism could work were unimpressed by von Mises, yet other famous socialists such as Robert Heilbroner claimed, “Mises was right.”
The Ludwig von Mises Institute was created in 1982 and continues to promote the Austrian school economy. Llewellyn H. Rockwell, Jr., who is also the president, founded it. The Institute exists exclusively on private donations.
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