Institut des Hautes Études Internationales

Geneva had been a quiet town before World War I, even though it already hosted the International Red Cross Committee. After the war, it became the home of the International Labor Office (1919) and of the League of Nations (1920). The latter was the result of an initiative of U.S. President Woodrow Wilson. The idea was to create an international political organization that would resolve conflicts between nation states without resorting to war. Ironically, Wilson did not receive the necessary ratification from the U.S. Senate for the United States to join the new organization. The League began its operations in 1921 without the participation of the man who had created it. Geneva was chosen for its location because of the longstanding neutral status of Switzerland—a status that in those days had more than mere nominal significance—and because Geneva was culturally a French city.

One of the most pressing problems for the new international bureaucracies was the lack of qualified employees. To cope with this problem, a Swiss director of the League named William E. Rappard (1883–1958) proposed the creation of a special bilingual school for the advanced scientific study of problems of international politics and administration. The school was to offer courses in French and English and make “full use of the resources of the League and the ILO in the form of specialized knowledge, documents and direct observation of how international affairs were conducted in the new context of multilateralism.”⁴

Rappard was a diplomat and constitutional historian who combined in himself all the qualifications necessary to breathe life into this project.⁵ He was not only a brilliant diplomat with connections to politicians, scholars, and statesmen, private firms and foundations, as well as government institutions in France, Britain, Switzerland, and the United States, but was also a highly respected scholar with appointments at Harvard University and the University of Geneva, where he served as an influential member of the academic senate and even briefly headed the university itself. Last but not least, he had the good fortune to enjoy the personal friendship of Woodrow Wilson, his colleague at Harvard from 1911 to 1913.⁶ This certainly proved to be helpful in more than one respect.

William Rappard, Bertrand de Jouvenel, Karl Popper, and Mises at the first Mont Pèlerin meeting in April 1947

Elected as rector in 1926, Rappard launched the new school of international political relations as a joint venture of the University of Geneva, which provided academic affiliation and oversight, and the Rockefeller Foundation in New York, which pledged to finance the school in cooperation with the city of Geneva and the Swiss federal government.

Rappard had been in touch with the Rockefeller Foundation since 1924 (or more precisely, with the Laura Spelman Rockefeller Memorial Fund). In 1926, Rockefeller representative Dr. Abraham Flexner⁷ pledged five annual payments of 20,000 U.S. dollars to the Geneva Department of Education, giving the green light to the creation of the school. Rappard hired the Frenchman Paul Mantoux as its first director. The school opened its gates in September 1927 under the name Institut des Hautes Études Internationales (Graduate Institute of International Studies).⁸ The Rockefeller Foundation's pledge of financial support was extended and increased in subsequent years and the Foundation would “continue to be the main financial sponsor for nearly twenty years.” By 1938, the school was receiving annual payments of 80,000 U.S. dollars and by March 1948, it had received a total of $1.4 million.⁹

Rappard and Mantoux had first met at the Versailles Peace Conference in 1919. Rappard had been granted special diplomatic observer status due to his personal acquaintance with Woodrow Wilson, and Mantoux was the principal interpreter in the allied camp and wrote the official records of the Council of Four.¹⁰ Rappard had known Mantoux already through his writings on economic history, which had won Mantoux an excellent international reputation. As a young man, he had published a monograph on the industrial revolution in the eighteenth century, which brought him quick fame and catapulted him into the higher strata of French academics and politics. A few months after the Versailles conference, he became Rappard's colleague in the directorate of the League of Nations. Given his academic and political background, he was an obvious—and excellent—choice for the new school.

Rappard later joined Mantoux in the management of the Institute, and together they led it for about twenty years. The harmonious cooperation between the two men proved to be the foundation of the Institute's success and its cordial atmosphere, which made it attractive as a destination for scholars from around the world. The position that Mises would hold for six years was a one-year (renewed) visiting position for economists of international reputation. His predecessors had been Samuel Patterson (Philadelphia), Frank Graham (Princeton), and Jacob Viner (Chicago). Other recent visiting economists of international pedigree were Gustav Cassel (Stockholm), and Theodore Gregory (London). It might well have been Gregory who brought Mises to Geneva—they had known each other for many years, and in 1933–1934 cooperated closely in the International Chamber of Commerce.¹¹ Or the initiative could have come from someone else—Professor Alfred Zimmern, for example, who ran the Geneva School of International Studies and had asked Mises in December 1929 to recommend suitable students for scholarships.¹² In any case, it is fairly certain that Mises's long-standing and close association with the Rockefeller Foundation proved to be beneficial once again. He himself had been very active in helping colleagues from Germany find new jobs abroad after Hitler rose to power in January 1933, and at least some of these new positions were likely financed by the Rockefeller Foundation. It was natural therefore that he himself receive support once the political situation in Austria became untenable for him. This was certainly the case after the violence of February 1934 and its aftermath. While it would be an exaggeration to say that Mises was on the payroll of the Rockefeller Foundation (this was effectively precluded both by Rappard's insistence that funds be received with no strings attached and by the co-financing of the Institute from Swiss sources) the fact remains that during the Geneva years Mises's salary was paid to a large extent out of Rockefeller money, and so things would remain for the next decade.¹³