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An Introduction to the Major Writings of Ludwig von Mises

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Ludwig von Mises (1881-1973)

The Austrian economist Ludwig von Mises (1881-1973) wrote widely on matters such as highly technical works on monetary theory as well as journalistic pieces designed for a broader audience. Here is an annotated list of some of his major writings which have been translated into English.

For further reading see:

1912: The Theory of Money and Credit

The first German edition of this book appeared in 1912 under the title Theorie des Geldes und der Umlaufsmittel. It is discussed at some length by Lawrence S. Moss in “The Monetary Economics of Ludwig von Mises” who summarizes Mises’s views as follows:

Mises favored an international monetary mechanism that would constrain the money-issuing proclivities of modern governments. He recognized that one of the great threats to the liberal ideal of a free, mobile, and prospering world economy is the tendency on the part of government to increase state coffers by using the “printing press’ rather than by borrowing or issuing new taxes. For Mises the guaranteed consequence of this policy, which he termed “inflationism,” is the wholesale redistribution of the wealth and property of individual citizens. This redistribution is accomplished, not by the method of parliamentary debate and legislative action, but by haphazard and cruel method that leave the poorest and most disadvantaged segments of the population worse off than before. In Mises’ view the great threat to the survival of democratic ideals and the organization of modern industrial life is a hyperinflation that would ravage the world economy like an angry fire, destroying the property and aspirations of the masses and creating conditions for military takeover and total state control.

As a practical matter, Mises favored commodity gold standard whereby each government would have to maintain the convertibility of money in terms of gold. Any policy of inflationism would be short lived in the wake of declining gold reserves, or the state would suffer the diplomatic embarrassment of having to redefine its currency unit in terms of gold. Mises, of course, realized that the resource costs of such a monetary arrangement are high, and the system itself is never totally insured against sudden and sometimes massive changes in the quantity of money that originate from, say, technological innovations in the processing of gold or new mine discoveries.62 But the virtue of the arrangement is not that it makes it too costly for the size and growth of the money supply to become an object of government policy. Mises preferred the impersonal mechanisms of the market, no matter how imperfect, to the whims and gluttonous excesses of power-hungry politicians. In Mises’ view, the strategy that is currently favored in liberal quarters, that of moving toward a less expensive fiat currency system while urging the monetary authorities to pass parliamentary decrees limiting their own appetities, is as idealistic as expecting a child not to eat candy placed in his hand.

See Lawrence S. Moss, The Economics of Ludwig von Mises: Toward a Critical Reappraisal, ed. with an Introduction by Laurence S. Moss (Kansas City: Sheed and Ward, 1976). /titles/moss-the-economics-of-ludwig-von-mises-toward-a-critical-reappraisal#Moss_0719_50

Ludwig von Mises, The Theory of Money and Credit, trans. H.E. Batson (Indianapolis: Liberty Fund, 1981). .

1919: Nation, State, and Economy: Contributions to the Politics and History of Our Time

Nation, State, and Economy, published less than a year after Austria’s defeat in World War I, examines and compares prewar and postwar economic conditions and explicates Mises’s theory that each country’s prosperity supports rather than undercuts the prosperity of other countries. Mises’s humanitarian recommendations in this book, born from a classical liberal perspective, provide a striking example of how supposedly “hardnosed” economic theory, based on the reality of experience, is in fact far more supportive of human flourishing than seemingly more “idealistic” but actually impractical social theories. Specifically, Mises warned of the consequences of the punitive terms of the Treaty of Versailles by victors more interested in punishing their defeated enemies than in building a Europe that would be able to meet the challenges of the future. With the benefit of hindsight we see how different European and world history might have been.

In an important chapter on “Liberal or Pacifistic Nationalism”, Mises shows how contradictory are the demands for a powerful national, unitary state and economic liberty:

Liberalism, which demands full freedom of the economy, seeks to dissolve the difficulties that the diversity of political arrangements pits against the development of trade by separating the economy from the state. It strives for the greatest possible unification of law, in the last analysis for world unity of law. But it does not believe that to reach this goal, great empires or even a world empire must be created. It persists in the position that it adopts for the problem of state boundaries. The peoples themselves may decide how far they want to harmonize their laws; every violation of their will is rejected on principle. Thus a deep chasm separates liberalism from all those views that want forcibly to create a great state for the sake of the economy.

Ludwig von Mises, Nation, State, and Economy: Contributions to the Politics and History of Our Time, trans. Leland B. Yeager, ed. Bettina Bien Greaves (Indianapolis: Liberty Fund, 2006). .

1922: Socialism: An Economic and Sociological Analysis

This translation is from the second German edition (1923), which included two articles by Mises: “Die Arbeit im sozialistischen Gemeinwesen,” Zeitschrift für Volkswirtschaft und Sozialpolitik N. F. 1 (1921): 459–76 and “Neue Beiträge zum Problem der sozialistischen Wirtschaftsrechnung,” Archiv für Sozialwissenschaft und Sozialpolitik 51 (1924): 488–500. The first edition of Socialism appeared under the title Die Gemeinwirtschaft: Untersuchungen über den Sozialismus. Jena: Gustav Fischer, 1922. As the title implies, Mises criticized the Socialist arguments from the point of view that the sociological and economic consequences of socialism are precisely the opposite of what is intended by the advocates of socialism. He also attacked the argument that socialism is historically necessary.

Murray Rothbard discusses Mises’ view of the impossibility of rational economic calculation under socialism and its implications for the broader idea of government regulation of economic activity in “Ludwig von Mises and Economic Calculation under Socialism” and concludes that:

Mises also refuted the idea that a Socialist Planning Board would arrive at correct pricing through trial and error, through clearing the market. While this could be done for already produced consumer goods, for which a market would presumably continue to exist, it would be precisely impossible in he realm of capital goods, where there would be no genuine market; hence, any sort of rational decisions on the kinds and amounts of the production of capital and of consumer goods could not be made. In short, the process of trial and error works on the market because the emergence of profit and loss conveys vital signals to the entrepreneur, whereas such apprehensions of genuine profit and loss could not be made in the absence of a real market for the factors of production.

See Lawrence S. Moss, The Economics of Ludwig von Mises: Toward a Critical Reappraisal, ed. with an Introduction by Laurence S. Moss (Kansas City: Sheed and Ward, 1976). </titles/moss-the-economics-of-ludwig-von-mises-toward-a-critical-reappraisal>.

Ludwig von Mises, Socialism: An Economic and Sociological Analysis, trans. J. Kahane, Foreword by F.A. Hayek (Indianapolis: Liberty Fund, 1981). .

1927: Liberalism: The Classical Tradition

This translation is from Liberalismus. Jena: Gustav Fischer, 1927. Here Mises restated the case for economic freedom on purely scientific grounds, that is, grounds that do not appeal to natural law or other metaphysical notions. William Baumgarth treats this book in his paper “Ludwig von Mises and the Justification of the Liberal Order”. Baumgarth notes that:

The political thought of Ludwig von Mises provided a forceful restatement and elaboration of liberalism as applied to a modern commercial society. Mises’ thought was developed during the first half of this century when liberalism, as a recognizable political force, was on the decline. This decline was precipitated by the theft of liberalism’s aims by those who sought to achieve the ends by employing antiliberal methods. It is paradoxical that as liberalism’s goal of material prosperity gained world acceptance, its specific program was threatened with complete extinction. Mises explained that the controversies of the modern world are about means and not ends: in general, men the world over expect a social system to provide “peace and abundance.” What men expect from social cooperation is the satisfaction of as many of their most urgent wants as possible, and therefore they, for the most part, dispute about the type of social system that will serve this purpose. In Mises’ words, “Liberalism is distinguished from socialism, which likewise professes to strive for the good of all, not by the goal at which it aims, but by the means that it chooses to attain that goal.”

See Lawrence S. Moss, The Economics of Ludwig von Mises: Toward a Critical Reappraisal, ed. with an Introduction by Laurence S. Moss (Kansas City: Sheed and Ward, 1976). </titles/moss-the-economics-of-ludwig-von-mises-toward-a-critical-reappraisal>.

Ludwig von Mises, Liberalism: The Classical Tradition, trans. Ralph Raico, ed. Bettina Bien Greaves (Indianapolis: Liberty Fund, 2005). .

1944: Bureaucracy

Written during the Second World War when all the liberal democracies had adopted various forms of government regulation and control of their economies, this is one of the earliest works by an economist explaining the sources of bureaucratic inefficiency. According to Mises, it is the absence of “profit-and-loss” accounting that distinguishes bureaucratic management from entrepreneurial management. But it is not surprising that, under the circumstances, Mises was quite pessimistic:

We must acknowledge the fact that hitherto all endeavors to stop the further advance of bureaucratization and socialization have been in vain. In the twenty-seven years that have passed since President Wilson led America into the war to make the world safe for democracy, democracy has lost more and more ground. Despotism triumphs in most of the European countries. Even America has adopted policies which, some decades ago, it disparaged as “Prussian.” Mankind is manifestly moving toward totalitarianism. The rising generation yearns for full government control of every sphere of life.

Learned lawyers have published excellent treatises depicting the progressive substitution of administrative arbitrariness for the rule of law. They have told the story of how the undermining of self-government makes all the rights of the individual citizen disappear and results in a hyperdespotism of the oriental style. But the socialists do not care a whit for freedom and private initiative.

Neither have satirical books been more successful than the ponderous tomes of the lawyers. Some of the most eminent writers of the nineteenth century—Balzac, Dickens, Gogol, Maupassant, Courteline—have struck devastating blows against bureaucratism. Aldous Huxley was even courageous enough to make socialism’s dreamed paradise the target of his sardonic irony. The public was delighted. But his readers rushed nonetheless to apply for jobs with the government.

Ludwig von Mises, Bureaucracy, edited and with a Foreword by Bettina Bien Greaves (Indianapolis: Liberty Fund, 2007). .

1949: Human Action: A Treatise on Economics

As the title indicates, Mises took up the whole of the science of economics and explained it as a subset of the more general science of human action, which he termed “praxeology.” The book is rich in its criticism of alternative schools of economic thought and philosophies of science that deny the unique and subjective character of the social sciences. The book is an expanded version of a German work: Nationalökonomie: Theorie des Handelns und Wirtschaftens. Geneva: Editions Union, 1940. Here Mises first argued the case for the praxeological character of the science. Murray Rothbard explains what Mises meant by the term “praxeology” in “Praxeology: The Methodology of Austrian Economics” and Ludwig Lachmann discusses the key concept of “market process” in “On the Central Concept of Austrian Economics: Market Process”. As Rothbard observes:

Praxeology is the distinctive methodology of the Austrian school. The term was first applied to the Austrian method by Ludwig von Mises, who was not only the major architect and elaborator of this methodology but also the economist who most fully and successfully applied it to the construction of economic theory.1 While the praxeological method is, to say the least, out of fashion in contemporary economics—as well as in social science generally and in the philosophy of science—it was the basic method of the earlier Austrian school and also of a considerable segment of the older classical school, in particular of J. B. Say and Nassau W. Senior.

Praxeology rests on the fundamental axiom that individual human beings act, that is, on the primordial fact that individuals engage in conscious actions toward chosen goals. This concept of action contrasts to purely reflexive, or knee-jerk, behavior, which is not directed toward goals. The praxeological method spins out by verbal deduction the logical implications of that primordial fact. In short, praxeological economics is the structure of logical implications of the fact that individuals act. This structure is built on the fundamental axiom of action, and has a few subsidiary axioms, such as that individuals vary and that human beings regard leisure as a valuable good. Any skeptic about deducing from such a simple base an entire system of economics, I refer to Mises’s Human Action. Furthermore, since praxeology begins with a true axiom, A, all the propositions that can be deduced from this axiom must also be true. For if A implies B, and A is true, then B must also be true.

See Edwin G. Dolan, The Foundations of Modern Austrian Economics, ed. with an Introduction by Edwin G. Dolan (Kansas City: Sheed and Ward, 1976). </titles/dolan-the-foundations-of-modern-austrian-economics>.

Ludwig von Mises, Human Action: A Treatise on Economics, in 4 vols., ed. Bettina Bien Greaves (Indianapolis: Liberty Fund, 2007). .

1952: Planning for Freedom: Let the Market System Work. A Collection of Essays and Addresses

In this anthology, Mises offers an articulate and accessible introduction to and critique of two topics he considered especially important: inflation and government interventionism. According to Mises, inflation, that is monetary expansion, is destructive; it destroys savings and investment, which are the basis for production and prosperity. Government controls and economic planning never accomplish what their proponents intend. Mises consistently argued that the solution to government intervention is free markets and free enterprise, which call for reforming government. For that, ideas must be changed to “let the market system work.” There is no better “planning for freedom” than this. In one of the more insightful essays in this volume, “Middle-of-the-road Policy leads to Socialism,” Mises notes that:

One Intervention Leads to Further Interventions. What we have to realize is that price ceilings affecting only a few commodities fail to attain the ends sought. On the contrary. They produce effects which from the point of view of the government are even worse than the previous state of affairs which the government wanted to alter. If the government, in order to eliminate these inevitable but unwelcome consequences, pursues its course further and further, it finally transforms the system of capitalism and free enterprise into socialism of the Hindenburg pattern.

Ludwig von Mises, Planning for Freedom: Let the Market System Work. A Collection of Essays and Addresses, edited with a Foreword by Bettina Bien Greaves (Indianapolis: Liberty Fund, 2008). .

[Published online with the kind permission of the copyright holders, the Foundation for Economic Education. In particular for the following articles: “Laissez Faire or Dictatorship”, “The Gold Problem”, Benjamin M. Anderson Challenges the Philosophy of the Pseudo-Progressives”, “Lord Keynes and Say’s Law”, “Stones into Bread”, “Economic Teaching at the Universities”, and “Trends can Change”.]

1956: The Anti-capitalistic Mentality

In this brief essay Mises analyzed the reasons why intellectuals find the capitalist system unacceptable. His search for the psychological roots of their criticism is touched on by Baumgarth in his paper “Ludwig von Mises and the Justification of the Liberal Order”. Most of Mises’ 1956 essay was reprinted in U.S. News and World Report, 19 October 1956. On The Anti-Capitaist Bias of American Intelelctuals Mises observes that;

The anti-capitalistic bias of the intellectuals is a phenomenon not limited to one or a few countries only. But it is more general and more bitter in the United States than it is in the European countries. … If a group of people secludes itself from the rest of the nation, especially also from its intellectual leaders, in the way American “socialites” do, they unavoidably become the target of rather hostile criticisms on the part of those whom they keep out of their own circles. The exclusivism practiced by the American rich has made them in a certain sense outcasts. They may take a vain pride in their own distinction. What they fail to see is that their self-chosen segregation isolates them and kindles animosities which make the intellectuals inclined to favor anti-capitalistic policies.

Ludwig von Mises, The Anti-capitalist Mentality, edited and with a preface by Bettina Bien Greaves (Indianapolis: Liberty Fund, 2006). .

1957: Theory and History: An Interpretation of Social and Economic Evolution

In this book Mises attacked the logical basis for believing that there are laws of social history analogous to the laws of the natural world. Mises also sketched his own theory of historical evolution, which is value free because it views historical phenomena as the outcome of purposive actions undertaken by individuals. He observed sadly that:

The history of the nineteenth and twentieth centuries has discredited the hopes and the prognostications of the philosophers of the Enlightenment. The peoples did not proceed on the road toward freedom, constitutional government, civil rights, free trade, peace, and good will among nations. Instead the trend is toward totalitarianism, toward socialism. And once more there are people who assert that this trend is the ultimate phase of history and that it will never give way to another trend.

Ludwig von Mises, Theory and History: An Interpretation of Social and Economic Evolution, ed. Bettina Bien Greaves (Indianapolis: Liberty Fund, 2005). .

1962: The Ultimate Foundation of Economic Science: An Essay on Method

Here Mises argued that economic phenomena cannot be “explained” unless they are analyzed in terms of the choices and plans of acting individuals. This is the strongest case ever made for “methodological individualism” in economics, by which he meant the following:

The rejection of methodological individualism implies the assumption that the behavior of men is directed by some mysterious forces that defy any analysis and description. For if one realizes that what sets action in motion is ideas, one cannot help admitting that these ideas originate in the minds of some individuals and are transmitted to other individuals. But then one has accepted the fundamental thesis of methodological individualism, viz., that it is the ideas held by individuals that determine their group allegiance, and a collective no longer appears as an entity acting of its own accord and on its own initiative.

Ludwig von Mises, The Ultimate Foundation of Economic Science: An Essay on Method, ed Bettina Bien Greaves (Indianapolis: Liberty Fund, 2006). .

Last modified April 10, 2014