European Peace University, Austria

Mises Introduces the Austrian School

M121 Mises Introduces the Austrian SchoolHis book, Untersuchungen über die Methode der Sozialwissenschaften, [4] was intended as a polemic effort to counter the destructive intellectual currents with which Prussian universities were poisoning the world. He realized that his fight was futile and hopeless, and became filled with a dark pessimism that exhausted his strength. He passed this pessimism on to his student and friend, Rudolf, successor to the throne. The crown prince took his own life because of despair over the future of his empire and that of European civilization, not because of a woman. The young girl had had a death wish of her own and he took her into death with him; he did not commit suicide on her account.

My grandfather had a brother who died many years before I was born. This brother, Dr. Joachim Landau, was a liberal member of the Austrian parliament and a close friend of his party colleague, Dr. Max Menger, brother of Carl Menger. One day he told my grandfather about a conversation he had had with Carl Menger.

Mises Introduces the Austrian SchoolAccording to my grandfather, as told to me around 1910, Carl Menger had made the following remarks:

The policies being pursued by the European powers will lead to a terrible war ending with gruesome revolutions, the extinction of European culture and destruction of prosperity for people of all nations. In anticipation of these inevitable events, all that can be recommended are investments in gold hoards and the securities of the two Scandinavian countries.

M120 Mises Introduces the Austrian SchoolMenger’s savings, in fact, were invested in Swedish securities.

One who so clearly foresees disaster and the destruction of everything he deems valuable before his fortieth year cannot avoid pessimism and depression. Ancient rhetoricians were careful to consider the kind of life King Priam would have had, had he at the age of twenty already foreseen the fall of Ilium![5] Carl Menger barely had the first half of his life behind him when he recognized the inevitability of the demise of his own Troy.

This same pessimism consumed all sharp-sighted Austrians. The tragic privilege attached to being Austrian was the opportunity it afforded to recognize fate. Grillparzer’s melancholy and peevishness arose from this source. The feeling of being powerless in the face of impending disaster drove the purist and most able of patriots, Adolf Fischof, into isolation.

It is understandable that I discussed Knapp’s Staatliche Theorie des Geldes[6] with Menger frequently.

“It is, ” said Menger,

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