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Home | Blog | Lew Rockwell on The Origins of the Mises Institute

Lew Rockwell on The Origins of the Mises Institute

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Tags History of the Austrian School of Economics

[A selection from an interview by Brian Doherty which appeared in the May 12, 1999 issue of SpintechMag.com as “Libertarianism and the Old Right.” Re-published in 2003 as part of Speaking of Liberty, a collection of interviews and speeches by Lew Rockwell.]

Brian Doherty: What was the genesis of the Mises Institute? How difficult was it to get off the ground?

Lew Rockwell: When I was in DC, my happiest moments were receiving calls from students who wanted to know more about Ron and his ideas. He had a huge amount of support on Texas campuses. He struck students as smart, principled, and radical.
But sending students speeches and pamphlets only took matters so far. I wanted to do more, but as I looked around, I didn’t see any libertarian organization that focused on advancing academic scholarship specifically focused on the Austrian School.

Also, I worried that Mises had been losing status as a thinker since his death. Hayek’s place was secure because of the Nobel Prize. But the rationalism of Mises, the tough edged quality of his thinking and his prose, the conviction that economics is a logical system that can justly claim the mantle of science, seemed to be fading.

The free enterprisers were turning toward murkier thinkers, monetarists, positivists, and even institutionalists who had no interest in the grand Misesian project. This also seemed to go along with an unwillingness to consider difficult and radical questions on grounds that they were politically unviable. There was overlap here with what was happening in politics. Since the early 1970s, the conservative movement was increasingly dominated by former members of the Old Left who had made their way over to the Right. These so-called neoconservatives made the switch in opposition to George McGovern’s foreign policy “isolationism,” but they had not really changed their views on domestic issues.

To give them credit, the neocons always admitted that they hadn’t left the Democrats; the Democrats had left them.
They openly celebrated the legacies of Wilson, FDR, andTruman — mass-murdering would-be dictators all.

That position needed to be refuted and fought, but instead, a military-minded conservative movement embraced the neocons as allies on the only issue that really mattered to them, the expansion of the warfare state. There was no place for Mises, whose writings on war and statism were numerous and profound, in this new consensus.

There were few alternatives to the Reaganized right. The Beltway libertarians were drifting more and more toward policy and a generalized concern with respectability (the two go hand in hand), and away from Austrian economics and anything that smacked of idealism or a high theoretical concern. Hosting Alan Greenspan at a cocktail party became the goal.

I noticed a similar tendency among scholarship-granting institutions. They seemed interested in subsidizing only Ivy-League students of a soft classical-liberal bent, rather than promoting the concrete development and application of radical thought.

Another approach I rejected was quietism. I’ve never been impressed with the idea that we should sit back in complacent satisfaction that we constitute the remnant, while others eventually join us or not. Surely ideas do have consequences, but reality dictates that they need passionate scholars to advance them on every front.

Hence, Mises as a thinker, who had done so much to resuscitate old-fashioned, tough-minded liberalism, was falling by the wayside, a victim of a movement that eschewed all such unrespectable thinkers. Misesian theory and practice were fading fast. I set out to change that, and to serve a neglected generation of students. Idealism is what stirs the young heart, and the only idealism that seemed to be available to students in those days was from the left. I harkened back to my lifetime love of Mises, of his brilliance and his courage, and talked with Margit about the project. She was thrilled, made me promise to make it my lifetime work, and we got busy.

When I asked Murray to head academic affairs, he brightened up like a kid on Christmas morning. We agreed that the goal should be to provide a support system that would revive the Austrian School as a player in the world of ideas, so that statism of the left and right could be fought and defeated. The main criticism directed against Austrian economics in those days was that it was not formal or rigorous because it rejected the use of mathematics as the tool for constructing economic theory. But this is absurd. In fact, Murray actually had two majors as an undergraduate: one in economics and the other in math. What was at stake here was not the competence of the Austrians but a fundamental methodological question: can the methods of the physical sciences be imported to the social sciences via economics? The Austrian answer was no.

At the same time, there was a grain of truth in the criticisms. American academia provided no formal setting to study economics from the Austrian perspective. Most of the then-current practitioners were self-taught, so even they had a limited perspective on the possibilities of creating an alternative formal system of economics. I wanted to make up for this deficiency by creating a shadow university setting in which students could study economics under the post-Mises generation of Austrian scholars, especially Murray. Murray loved our programs. He would teach all afternoon and stay up until 3:00 and 4:00 A.M. talking to students about ideas. He was always accessible, laughed easily, and was never foreboding. He learned from everyone around him and rejected the “guru” persona he could have so easily adopted. Students who came to us expecting a stern setting of judgmental theorizing were shocked to discover something closer to a salon where intellectual inquiry was free and open ended. It had to be that way to balance out the rigor of the content. Murray’s spirit still animates all our programs.

The funding problem was one I dealt with from the beginning. I had wanted to give Murray a platform, but I quickly discovered that old-line foundations would not help so long as he was on board. They certainly would not support an organization that argued for positions like the abolition of central banking, or funded revisionist historical scholarship and disagreed with the two-party consensus in Washington.

Corporate foundations, meanwhile are not very interested in ideas generally, particularly not ones that threatened the status quo. It’s a cliché now, but I also found that big corporations are not the strongest supporters of free enterprise. I also found that most old-line foundation and corporate money comes with strings attached. And if there is one institutional feature I desired for the Mises Institute, beyond its ideological stance, it was independence. I did not want to get roped into supporting cranky policy projects like vouchers or enterprise zones, and I did not want to be forced into emphasizing some aspects of Misesian theory simply because they were trendy, while feeling compelled to deemphasize others. I never wanted to find myself censoring an associated scholar because some foundation bigshot didn’t like what he was saying.

I wanted to see the fullness of the Austrian program funded and represented, consistently, fearlessly, and regardless of the fallout. The Mises Institute needed to do work that is deep and wide. It needed to be free to support research in areas like economic methodology, which doesn’t interest corporations, or blast the newest policy gimmick, a stance that doesn’t interest foundations. Finally, government money was not ever a consideration. In the end, our support has come from individual donors and nearly exclusively so. I had a good-size Rolodex, so I started there. Ron Paul and others signed letters to their lists, which was a big help, and I had enough savings to work a few years without a salary. We’ve been in business now for 17 years, and it took a long time to become viable. But we built slowly and carefully, brick by brick, and now have a solid edifice. And we still have our independence, and we still have an edge.

Llewellyn H. Rockwell, Jr., is founder and chairman of the Mises Institute in Auburn, Alabama, and editor of LewRockwell.com.

Note: The views expressed on Mises.org are not necessarily those of the Mises Institute.
Image source: Gage Skidmore https://www.flickr.com/photos/gageskidmore/
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