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Ludwig von Mises is credited with expanding the concept of Austrian economics and developing the Misesian Doctrine. Born in 1881, he lived to be 92 years of age. In his long life, he held great influence as a famed economist and teacher of economics, although not everyone agreed with his theories. At times, he was ostracized, to the point of being “blackballed” from holding paid teaching positions.
At a young age, Ludwig von Mises studied at the illustrious University of Vienna and there he learned the Austrian theory, which emphasizes the importance of the individual rather than artificial controls on the economy. In his early twenties, von Mises wrote the “Theory of Money and Credit.” In doing so, he accomplished a feat thought to be all but impossible, blending the two theories that in today’s language are known as macroeconomics and microeconomics.
In simple terms, he believed that no civilization could prosper with the addition of ever-increasing unsecured currency. Ludwig von Mises advocated the gold standard, or an equivalent method of backing currency. Concerning credit, von Mises explained that augmented credit offered by banks could only lead to inflation, recession, and depression. He also believed in free trade as opposed to governmental interference and protectionism.
Ludwig von Mises wrote expansively on economics over his lifetime and taught at the University of Vienna. At the same time, he was an official adviser for the Austrian government, concerning economics, 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 that it could never succeed. His critical view of socialism was not a secret and he compared the Soviet system to the U.S. system, citing capitalism as superior.
Later, theories developed by Ludwig von Mises and an adherent named Friedrich Hayek — who won a Nobel Prize for expanding on these works — stood in stark contrast to the Keynesian theory. Keynes promoted a mixed economy, or a mixture of capitalism and socialism. It seemed new and interesting. It gained popularity, yet Mises believed that government interference would always eventually lead to full blown socialism, a model that had never been workable 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 he acquired no salary from the University. His salary was paid by friends and businessmen who supported his work, despite the Keynesian Revolution a few years prior to his arrival in New York. Those who believed “a little bit” of socialism could work, were not impressed with von Mises, yet other renowned socialists such as Robert Heilbroner stated, “Mises was right.”
The Ludwig von Mises Institute was developed in 1982 and continues to promote Austrian school economics. Llewellyn H. Rockwell, Jr., who is also the president, founded it. The Institute exists solely on private donations.