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Ludwig Heinrich Edler von Mises

Mises was born in 1881 in the Austro-Hungarian city of Lemberg, the son of a successful engineer. At the age of 19, he entered the University of Vienna, and received his doctorate at 27.

When Ludwig Heinrich Edler von Mises died at St. Vincent's Hospital in New York City in 1973 at the age of 92, there was no front-page obituary in the New York Times. But believers in liberty knew that a giant had fallen.

In his Theorie des Geldes und der Umlaufsmittel (1912), translated into English in 1934 as Theory of Money and Credit , he made two lasting contributions to economics: he demonstrated how Menger's value theory applied to money, and he presented a new business-cycle theory in the light of which economic crises appeared as resulting from inflation-induced misallocations of resources.

In the fall of 1919, von Mises wrote his most famous essay, on "economic calculation in the socialist commonwealth." He argued that a socialist leadership lacked the essential tool for the rational allocation of resources--economic calculation--and that only the money prices of a capitalist economy make it possible to compare alternative investment projects in terms of a common unit.

Two years later he published a treatise on socialism ( Die Gemeinwirtschaft , 1922), which had a decisive impact on a whole generation of rising intellectual leaders--men such as F. A. Hayek and Wilhelm Röpke, who after World War II would lead the nascent neoliberal movement.