Ralph Raico makes an interesting aside about Hayek’s Nobel.

Actually Hayek only won “half” of a Nobel prize. The award was made to the distinctly “odd couple” of Hayek and Gunnar Myrdal.

Hayek’s 1974 nobel prize (actually it is the Bank of Sweden Prize in Economic Sciences, not part of the original Nobel legacy) may have been ‘deserved’ in a certain sense but it is hard not to believe the surprise award to Hayek didn’t have more to do with “balancing the ticket” so as to pave the way to allow the Bank of Sweden to co-award the prize that year to Gunnar Myrdal, who was one of their own.

Myrdal, after a long intellectual and political career serving Sweden’s dominant Social Democratic Party, had actually been on the board of the very bank that financed this prize. The terms of the Bank’s endowment, which began in 1969, prevented them from awarding the prize to a Swede for (I recall) 5 years. Myrdal got his prize in the 6th year.

Had a board member of a private corporation been awarded a prize endowed by the same corporation, hackles would most certainly been raised. Of course Swedish socialists have evolved beyond that kind of thing and only ungracious hillbillies from the fever swamps would ever doubt their ethical purity.

Unfortunately for Gunnar’s buddies at the Bank, Myrdal just would not have been considered a serious candidate for an economics prize by the international profession. His academic record was more political sociology than economics per se. So they hit on the idea of having the award made for “..pioneering work in the theory of money and economic fluctuations and for their penetrating analysis of the interdependence of economic, social and institutional phenomena”. In order not to be made a laughing stock the committee needed to “balance the ticket”, and Hayek’s explorations of institutional development, actually more correctly labeled political philosophy than economics, was the best available book end for Myrdal.

Hayek was genuinely surprised when he was nominated. He never imagined he would ever be awarded such a prize. Myrdal, in contrast, always wondered why he had to wait so long.

These prizes, like academy awards, are political and need to be treated with some skepticism. That Mises may have deserved the prize more than Hayek should not surprise us.

Tim G writes:

“The terms of the Bank’s endowment, which began in 1969, prevented them from awarding the prize to a Swede for (I recall) 5 years. Myrdal got his prize in the 6th year.”

Later, he writes:

“Myrdal [...] always wondered why he had to wait so long [to be awarded the prize].”

Uh, I don’t get that. Assuming Myrdal, for all his myriad faults, appreciated basic arithmetic, why would Myrdal be puzzled that he wasn’t awarded it until the very first year he technically qualified?

Am I missing something here?

Jim Roberts,

It won’t get me any invitation to keynote at its next conference, but it’s hard to miss that the Ludwig von Mises Institute is somewhat organized as a cult around, not only the scholarship, but the very persons of Murray Rothbard and, secondarily, Ludwig von Mises.

I don’t say this resentfully. It seems to me that not only were both men generally correct in their scholarship, but likely the greatest creative geniuses of political economy active during the 20th century. And I confess to never having had the privilege of meeting them. (Fortunately, the Institute has downloadable recordings of some of their speeches, so one may get a sense of the personalities beyond their published texts.)

Still, it seems a bit unfortunate that the Institute and most of its featured writers idealize these men in a way that threatens to stultify flexible thinking. Maybe it’s justified, but I’m skeptical.

For example, Rothbard appears to have been lifelong political experimentalist. His apologists insist he was merely seeking to forge coalitions, but the degree of conviction to be found in his shifting political rhetoric doesn’t do much to assure me.

Mises was an enormously heroic man, but he seems to have veered from the merely apodictic to the sanctimonious. Listening to his talks, he was certainly a no-nonsense guy, never one to crack a joke. Apparently he walked off stage in the middle of a panel discussion at a meeting of the Mont Pelerin Society when he concluded that he co-panelists had too many socialistic ideas. (I don’t doubt they had, but it would’ve been more civil and useful for Mises to have stayed put and refuted the errors spoken before.)

Interestingly, the hard-Rothbardians in charge step around discussion of where Mises disagreed with Rothbard. For instance, Mises published a long passage arguing the implausibility of anarcho-capitalism, Rothbard’s politico-economic ideal. The book where this is found, *The Ultimate Foundation of Economic Science*, seems to be one of the few important Mises texts unavailable either online or through the bookstore of the Institute.

The Institute also publishes the “Scholar’s Edition” of Mises’s English-language general economics treatise, *Human Action*. This is actually the first edition (1949). The third edition (1963) is pooh-poohed for having cut a few passages dealing with economic theory. But another, less spoken of, motive seems to be that during the intervening period, Mises became something of a Cold Warrior, one of the last things Rothbardians want to promote. Mises even adds an endorsement of conscription (apparently just the thing to stop the march of Communism)!

Now, I tend to agree that the Mises of 1949 expressed a sounder and fuller body of thought than the 1963 Mises. But the differences between the two texts are small, and it would’ve been easy to conflate the two texts, displaying the few differences with color-coding or with different fonts. The convention for legislative bills is to run a horizontal line through the old text to be deleted and to italicize the text to be newly added: that’s another approach that could’ve been taken here. That certainly would’ve been more appropriate for something billing itself the “Scholar’s Edition” than merely reprinting the first edition. There’s something tendentious and unseemly about approaching Mises’s text the way the Institute has done.

Unfortunately, there’s a stubborn human tendency for people to idealize those whose systems of thought they admire. One sees this, far more so than with Rothbard, with followers as disparate as Karl Marx and Ayn Rand, Henry George and Leo Strauss. But this hardly invalidates the substantive ideas behind the personalities. These must be judged on their own merits, as Mises might say in all his characteristic apodictic simplicity.

Jeffrey (Tucker?),

I’m glad to see that the Institute has *The Ultimate Foundation of Economic Science* online after all. When I did a search earlier, nothing showed. Presumably I undertook that search the wrong way. My apology.

As to *Human Action*, I never suggested there’s anything inappropriate in republishing a first edition, or any edition prepared during the lifetime of an author, of a book. If the book in question had simply been billed as “The Original Edition” or “The Restored First Edition” or some such, this would hardly be worth discussing. But billing it as “The Scholar’s Edition” leaves the impression that some special preparation was made of the text, when there was none. It was just a reprint of the first edition text, the new third party introduction and index notwithstanding.

The “new introduction based on archival materials” penned by latter-day Misesian scholars is certainly informative (if somewhat clumsily written), but isn’t very comprehensive. It’s pretty thin gruel to justify billing the whole volume “The Scholar’s Edition”. When Penguin Classics prints a long introduction to, say, a Dickens novel by a literary scholar discussing the context for the original composition and the history of its various editions, Penguin doesn’t bill it as “The Scholar’s Edition”. Penguin would be laughed at in the publishing industry for doing so.

A comprehensive scholarly text systematically lists emendations, substantive variants, accounts for line-end hyphenations, and discusses, if applicable, adopted readings. All that seems excessive for purposes of developing a comprehensive text for *Human Action*, though, as it’s a very straightforward nonfiction work. What would be most useful for ordinary purposes is to simply conflate the texts of the first and third editions (for any practical purpose, I expect most would agree, the second edition text can be ignored), using one of the methods I noted previously for a reader to easily distinguish the textual differences (known by literary scholars as substantive variants).

I’ve been unable to find what you describe as “a complete accounting of the differences between all editions, including the differences between the 1st and the original German [... that] is available on the Human Action page.” The new introduction to “The Scholar’s Edition” does in a general way discuss the differences, and then lists “Major Differences in Later Editions”. This is helpful, but hardly presented with the rigor that justifies calling the thing “The Scholar’s Edition”.

For one thing, “major” isn’t defined here, so we don’t know what was left out or what criteria were applied in doing so. Then, passages are merely textually bookended with ellipses in the middle. So to see the “major” differences, one has to look up the actual texts in the first, second, and third editions to see those differences. Even with both first and third edition texts available online, that’s a cumbersome task indeed for any reader.

I found the location of Mises’s discussion of the implausibility of anarcho-capitalism you are referring to in “The Ultimate Foundation of Economic Science” in Chapter 5: “On Some Popular Errors Concerning the Scope and Method of Economics”, section 10: The Concept of a Perfect System of Government.

He indeed makes the following statement: “Government as such is not only not an evil, but the most necessary and beneficial institution, as without it no lasting social cooperation and no civilization could be developed and preserved.”

It is really very interesting because in the following paragraph Mises anticipates the crucial weakness in his own assertion:

“It is a double-edged makeshift to entrust an individual or a group of individuals with the authority to resort to violence. The enticement implied is too tempting for a human being. The men who are to protect the community against violent aggression easily turn into the most dangerous aggressors. They transgress their mandate. They misuse their power for the oppression of those whom they were expected to defend against oppression. The main political problem is how to prevent the police power from becoming tyrannical. This is the meaning of all the struggles for liberty. The essential characteristic of Western civilization that distinguishes it from the arrested and petrified civilizations of the East was and is its concern for freedom from the state. The history of the West, from the age of the Greek down to the present-day resistance to socialism, is essentially the history of the fight for liberty against the encroachments of the officeholders.”

It is not hard to imagine that Mises might have recognized that this area of his thought needed perhaps some further development. After all, could he have rested easy at night thinking that “the most necessary and beneficial institution” is run by “the most dangerous aggressors”? I don’t think he went all the way on this topic at all. He must have suspected it himself. I think the volumes of anarcho-capitalist theory that followed Mises answers Mises’s dilemma presented here well. And of course, it most likely could stand further development still.

Thanks for bringing this issue up. I’m still interested in your points about the inconsistent Rothbard.

“Milton Friedman, though from a completely different tradition of economic thought, has called him [Mises] ‘one of the great economists of all time.’” I certainly fully agree with Milton Friedman’s statement. However, given the major differences between Milton Friedman and Mises concerning such issues as methodology/epistemology, monetary theory and policy, and the status of the general equilibrium construct and the role of the entrepreneur, I find Professor Friedman’s statement quite interesting if not intriguing. Can anyone shed light on the context in which Professor Friedman’s statement was made? Was Professor Friedman only referring to the policy implications of Mises’s work or also to Mises’s theoretical contributions?

Bruno,

While David Friedman can be considered an anarcho-capitalist, I am almost 100% certain that he generally is not a follower of the Austrian School. I believe his technical economics follows that of the Chicago School. In addition, and someone correct me if I am wrong, I think David Friedman bases his support for anarcho-capitalism on economic efficiency criteria, whereas Rothbard and his followers utilize a natural/property rights framework in addition to economic arguments.

Jeffrey:

I agree with the importance of preserving the pagination of the original edition for citation purposes, but it might perhaps have been a good idea to include an appendix with Mises’ additional passages from the third edition.

I found the introduction very interesting. My only criticism is that it may have been better to consult a mathematician before writing that Mises had “significantly improved” his brother’s work on probability. I don’t know anything about Richard von Mises’ work, but LvM’s treatment of probability is rather amateurish and does not resolve the definitional ambiguities he criticises. Most importantly, these ambiguities had already been resolved by the time he was writing. Probability theory was largely re-written by Kolmogorov and others in the 1930′s using an axiomatic approach (see http://en.wikipedia.org/wiki/Probability_axioms). Mises’ treatment of probability in Human Action may have contributed to his marginalisation, since by that time most young economists were already well versed in mathematics.

First, I want to correct an error I put here earlier: The third edition of *Human Action* came out in ’66, not ’63. ’63 was when the second edition came out.

Paul Edwards:

I haven’t kept a running list of Rothbard quotes, so let me dig around and get back with you in a few days.

You’re right that Rothbard criticized ideas of Mises. And it’s worth noting that the reverse occurred: Surely that’s why Mises in his last major new book chose to expound on anarcho-capitalism, to put on the record his disagreement with sometime-protegé Rothbard.

My point was not that Rothbard never criticized Mises. On the contrary, I was alluding to the seeming fact that the Institute tends to softpeddle the intellectual differences between the two men. Without paying close attention, it’s easy to miss that the Institute functions primarily to promote the ideas of Rothbard, while usually emphasizing Mises to the extent that Mises provided certain important foundational ideas to Rothbard and otherwise agreed with Rothbard in many ways.

To its credit, the Institute has many associates who hold many differing opinions about those ideas. Perhaps you’re one of them, and in any event I applaud the independence of your mind. But I’m persuaded that a picture of rosy confluence of Mises’s and Rothbard’s thought is insinuated from the upper echelons of the organization. As to Rothbard himself, he’s been deceased for a decade, and I’m unfamiliar with what this website was like when he was still alive.

I didn’t say the Institute was a cult. I wrote that the “Institute is somewhat organized as a cult around” Rothbard and, secondarily, Mises. By that, I mean that the implied message that comes from the top is that these men were practically flawless. I never supposed everyone agrees with that message, and it’s a very good thing that there isn’t the regimentation of thought demanded that characterizes Leonard Peikoff’s Ayn Rand organization.

Regarding David Friedman:

He’s unabashedly a Chicagoan. How he reconciles that with anarchism when the Chicago School otherwise suggests that coercive control of money and banking is all for the good is to my mind one of the great mysteries of our time.

Jeffrey:

Thank you for your informative comments. I’m sorry you find this discussion tedious.

I’m very glad that a group of scholars, with the Institute’s support, researched the textual and publishing history of Mises’s general economics treatises. This information richly merits publication, whether as an intro to *Human Action* or elsewhere (as in a journal or a biography).

However, I’m a bit surprised to think that 20 pages describing this material accompanying a main text of over 900 pages makes the book “The Scholar’s Edition”. Usually that’s just called, “With a New Introduction”.

I’m pleased that Vernelia Crawford’s index has at last been united with the first edition, just as her index to the third edition was initially included in the latter. An unfortunate oversight of “The Scholar’s Edition” is that Mises’s personal preference for Crawford’s index — and disappointment with Yale’s own — which you cite above is never noted. Instead, the reader is merely told that Crawford prepared it in ’54 and that it’s more complete than Yale’s (pp. v and 883). This oversight makes the index less intrinsically valuable to scholars, as they have to look elsewhere to learn of the author’s preference.

As discussed before, there are certainly good reasons for republishing the first edition. That the first is cited more in scholarly literature is one of them. But it would’ve been a lot less confusing to call it the original text instead. (There are many precedents for this: Many times original texts come to hold as much or greater interest than later ones, *Frankenstein* being one much-noted example.) I’ve never heard of subtitling such a text “The Scholar’s Edition”. Such a text would presumably quote in full all the substantive variants. (Though excluding the second edition seems reasonable in the case of *Human Action*.)

Pagination is important with *Human Action*. But that’s just another good argument for reissuing the first edition. (There are also creative techniques for identifying earlier pagination in conflated texts, but I won’t go into that now.)

The physical production of the volume is wonderful, its price is held very low because it’s subsidized by a nonprofit organization, and many good people poured their hearts and souls into it:

Yes, those things are true enough. Gosh, I’m really the heavy here, aren’t I? So maybe I should stop. But there’s too much of the apodictic in me.

Those are side issues. I was discussing the contents, not the physical production; not the financial considerations of the Institute; not the dedication of the volume’s preparers. That’s not what most people do when they discuss books. They’re more likely to talk what a book says it is, and what a book’s contents are.

“The Scholar’s Edition” is a lush reprinting of the first edition of *Human Action*, with a new scholarly introduction focusing on the history of the book, and an improved index. It’s a great book to have, to hold, and to read.

But that’s all it is. The subtitle is somewhat pretentious.

James Roberts:

I’m surprised you think FEMA was of value, since it largely prevented outside help from coming into NO, while providing extremely little assistance itself. That’s not dogma, that’s empirical observation. Nobody can help it that it lends evidence to ideas held by the more famous Austrian economists.

Personally, I find Hayek, well, tedious. There’s a tone he has — is it apologetic? — that doesn’t sit well with me, that goes to too great lengths to cajole his opponents.

And though squarely antisocialist, he’s a welfare statist. He believes in a safety net, and that government ought to be providing it. Kind of Austrian lite.

But to his credit he was always friendly and generous toward Austrian hardliners like Mises and Rothbard. (Unlike certain Austrian lites of that generation who turned their backs on the hardliners once having left Austria and become esconced at American universities.)

Paul Edwards (I think) writes, about my adherence to the Chicago school:

“How he reconciles that with anarchism when the Chicago School otherwise suggests that coercive control of money and banking is all for the good is to my mind one of the great mysteries of our time.”

He is confusing methodology with policy conclusions–he might as well argue that one cannot be an Austrian unless one joins Mises in supporting the draft and state opera.

So far as Chicagoan arguments for private money are concerned, you can find some of them in an old piece of mine at:

http://www.cato.org/pubs/pas/pa017es.html

As it happens, there is another argument for privately issued competitive currencies which starts with the title essay of _The Optimal Quantity of Money and Other Essays_, by M. Friedman. Simplifying a bit, that essay shows that the optimal behavior of prices, for a somewhat technical reason, is to fall at a rate that makes the nominal interest rate zero. I leave it as an exercise to your readers to demonstrate that (again simplifying a little, and in the same way) a competitive market for currency would give precisely that outcome. The reason, just as in more convention forms of the argument, is that the market equates marginal cost, marginal value, and price.