Ludwig von Mises turned out to be among the very last thinkers of the original epoch of the Austrian School of Economics. He obtained his law and economics doctorate late in the period of the Austrian School in 1906 at the University of Vienna. His writings and teaching had a tremendous impact on the young people of his day and age, especially Americans of that and future generations.
The Theory of Money and Credit proved to be among the best and most influential of Ludwig von Mises’ works. This ground breaking work became published in 1912. It served as a principal banking and monetary textbook for fully the following two decades. In this influential work, von Mises took off on the Austrian marginal utility theory to expand the idea to money. He observed that no one demands money simply to possess money for its intrinsic nature. Instead, individuals are attracted to its utility in buying goods with it. This was revolutionary thought at the time.
In the book, Ludwig von Mises also postulated that the business cycles of economies occur because governments allow limitless expansion of credit by the banks. Mises then went on to put his ideas into place by founding his Austrian Institute for Business Cycle Research in 1926.
The students of Ludwig von Mises were many and some of them were important to later generations. Friedrich Hayek became the most influential of them. He eventually expanded and extrapolated further on Mises’ ideas on business cycles.
Besides these important ideas, Ludwig von Mises made other important contributions to the fields of political and economic thought. He argued that socialism would fall because its economy collapsed first. He penned a 1920 article which postulated social governments would be unable to engage in the necessary economic calculations which were needful in order to establish complicated and efficient economies. Social economists of the time Abba Lerner and Oskar Lange vehemently disagreed with his arguments. Today the majority of economists side with von Mises and his arguments which were further expounded on by his star pupil Hayek.
Ludwig von Mises felt certain that self-evident axioms made economic truths in practice. These economic principals were not able to be tested empirically he believed. Finally he reached the point of writing his magnum opus great work entitled Human Action. In this and other publications, he spelled out his full world view of economics and human interaction. Unfortunately at the time, von Mises was unable to persuade the majority of economists living in his age who were outside of the Austrian School of Economics. He strongly championed laissez-faire economics, arguing that the government had no place to be involved in any portion of a national economy. There were points where he violated his own rules with some important exceptions. He believed that war justified forced military conscription, a sharply anti-free market idea.
Ludwig von Mises served as a professor without pay for the University of Vienna during the years 1913 through 1934. He worked officially for the Vienna Chamber of Commerce as economist at the same time. While in this role, he labored on behalf of the Austrian national government as their main economic advisor. When Nazism took root in his native Austria, von Mises immigrated to Geneva, Switzerland in 1934. There he became professor in the Graduate Institute of International Studies. He served in this capacity until he eventually immigrated on to New York City in the U.S. in 1940. He worked as a visiting profess there in New York University from 1945 through his eventual retirement in 1969.
Sadly for Ludwig von Mises, his economic policy ideas were out of political favor policy wise in the years of the Keynesian revolution which swept across the American elite and political landscape between the 1930s and the 1960s. He became increasingly bitter after Hitler wrecked the land of his birth and as the Keynesian ideas became a full blown revolution in Washington D.C., London, and Paris. He went full circle from believing himself to be a mainstream member of economics to a final dismal view of himself as an economic outcast. This is evident in his book The Theory of Money and Credit. In the early sections he wrote in 1912, he argues calmly and rationally, while in the final section penned in the 1940s, he is vehement and argumentative.
Despite this pitiful end to his great life and work, Von Mises had a profound legacy, especially in the United States. His powerful impact on the young people of his generation and that of his successor Hayek caused the Austrian School of Economics to enjoy a powerful resurgence in the U.S. after his death.