Free Market Defense Essay Example For Students

Free Market Defense Essay Ludwig von Mises: Defender of the Free MarketLudwig von Misis thoughts on human behavior, socialism, and money and credithave had a major impact on economic thought. He championed true free markets andis seen as a defender of liberty. Former President of the United States RonaldReagan said Ludwig von Mises was one of the greatest economic thinkers in thehistory of Western Civilization. Through his seminal works, he rekindled theflames of liberty. As a wise and kindly mentor, he encourages all who sought tounderstand the meaning of freedom. We owe him an incalculable debt(MisesInstitute). The remainder of this paper will outline the life of Ludwig vonMises. This will be accomplished by describing the social, political, technical,and economic environment that influenced his ideas. A description of his majorideas in economic thought will be presented. Next, the people and ideas thatinfluenced his approach to economics will be addressed. Finally, the paper willconclude with an assessment of Ludwig von Mises contributions to economicthought. Overview of the Life of Ludwig von Mises Ludwig von Misis was born onSeptember 29, 1881 in Lemberg, Austria. He attended a private elementary school,the public Akademishe Gymnasium in Vienna from1892 to 1900. In 1900 Misesentered the University of Vienna. On February 20,1906 he received a Dr. Jurdegree, a Doctor of both Canon and Roman Laws, from the University of Vienna. When Mises attended the University, it had no separate economics department; theonly way to study economics was through law (Mises Institute). From 1907 to 1914Mises was employed as an advisor to the Austrian Chamber of Commerce. His firstmajor thesis, the Theory of Money and Credit was published in 1912. In 1913Mises was awarded the position of Privatdozent (unsalaried lecturer) at theUniversity of Vienna (Mises Institute). Mises academic pursuits wereinterrupted from 1914 to 1918 due to World War I. After World War I Misesreturned to the University of Vienna and his position at the Austrian Chamber ofCommerce. His next major thesis, Socialism, came in 1922. In 1934 Mises accepteda position as Professor of International Economic Relations at the GraduateInstitute of International Studies, in Geneva, Switzerland. Even though he badleft Vienna to accept this position in Switzerland, Mises did work for theAustrian Chamber of Commerce on a part-time basis until Hitlers annexation ofAust ria in March 1938 (Mises Institute). On July 6, 1938 Ludwig von Misesmarried Margit Sereny in Geneva. Ludwig von Mises immigrated to the UnitedStates in 1940 arriving in New York on August 2. In the United States Misestaught as a Visiting Professor at the University of New York from 1945 to 1969. He also traveled to Central and South America giving lectures from 1942 to 1959. In 1949 Mises published his crowning achievement Human Action. This treatisesummarized his thoughts on economics. Through out the rest of his life Misesreceived several distinguished awards. On October 10, 1973 Ludwig von Misespassed away at St. Vincent Hospital in New York City. Factors Influencing Ludwigvon Mises Ideas The major influence on Ludwig von Mises ideas was the Austrianschool of economic thought. The political and economic events that influencedMises included two world wars and an extended worldwide depression. In thepolitical turmoil after World War I, the main theoretician of the now socialistAustrian government was Marxist Otto Bauer. Mises had befriended Bauer duringhis school years and the two often discussed economics and politics. Misesexplained economics to him night after night, eventually convincing him to backaway from Bolshevik-style policies (Mises Institute). His actions kept Austriafrom following to the hyperinflation that the Germans experienced. Thepreva iling political climate during this time was Socialism. Mises stronglyopposed Socialism and its prevalence inspired him to write his next great workSocialism. The Great depression brought about the rise of Keynesian Economics. Mainstream economics embraced Keynesian economics and as a result Mises theoryof money and credit was pushed into the background as the cause for businesscycles. Political activity in Europe, specifically Hitlers aggression, droveMises from his homeland and then Europe just before World War II. Misescontinued to lecture widely in the United States, Europe and Latin America. Heserved as economic advisor to the Foundation for Economic Education (FEE) fromits founding in 1946 until his death. He was appointed a Visiting Professor atNew York University Graduate School of Business Administration in 1945 andserved there until 1969 (FEE). In his life time Mises witnessed the completionof the industrial revolution in the western world as well as the pervasion ofgovernment intervention into the free market through fiscal policy, based onKeynesian Economics, and through the institutionalization of central banking. The Constellation Orion EssayEugen von Boehm-Bawerk, a student of Menger, taught a young Mises from 1904 to1914 at the University of Vienna. His views on intervention of the governmentand how it reacted to economic law greatly influenced Mises thesis on socialism. Boehm-Bawerks theory on interest and capital and its time preference basisformed the logic needed to argue the viability of socialism (Spiegel). Misesthoughts on the business cycle were derived from Ricardian models, Boehm-Bawerkstheory on capital and the factors of production, and Knut Wicksells ideasregarding production and the effects the difference between real and nominalinterest rates has on it. Max Weber influenced Mises concerning economics as asocial science, but Menger was probably the major influence here as well. Assessment of Ludwig von Mises Contributions to Economics The completeness ofHuman Action is the most impressive contribution that Ludwig von Mises gave toeconomics. The marriage of micro and macroeconomics was accomplished throughMises theory on money and credit. This was the first time that this had beenaccomplished. His argument presented in Socialism has been historicallyvindicated and supported by empirical facts. Mises undying views on laissezfaire has been his sticking point with mainstream economics (Spiegel). Thefailure of the gold standard and the prevailing existence of central banks aretestaments to this. The biggest triumph of Mises is the methodology used tostudy economics. He solidified Mengers theoretical approach to economicproblems. BibliographyFoundation for Economic Education Ludwig von Mises AvailableInternet www.fee.org/about/misesbio.html Greaves, Percy L. Mises MadeEasier, 1974, Free Market Press Koether, George The Wisdom of Ludwig vonMises 1981, The Freeman Ludwig von Mises Institute Who is Ludwig von Mises Available Internet www.mises.org/mises.asp Ludwig von Mises InstituteWhat is Austrian Economics Available Internet www.mises.org/austian.aspLudwig von Mises Institute Why Austrian Economics Matters Available Internet www.mises.org/why_ae.asp Ludwig von Mises Institute AnAmerican Classical Liberalism Available Internet www.mises.org/classical.asp