Misesians

Mises and his circle of friends were not the only libertarians who had not believed Human Action could become a bestseller. Herbert C. Cornuelle and the people at the Volker Fund had sensed that the Misesian edifice was too intellectual to be digested by the general American public. What was needed was a more boiled-down version of the book, which would facilitate the penetration of the message into the larger public. But who could write such a work?

Murray Rothbard

Cornuelle thought he had found the right person in Murray Rothbard, who had been in touch with FEE from at least 1946.²⁵ Apparently he met Mises for the first time at a FEE lecture in the summer of 1948.²⁶ By that time, Rothbard held degrees in mathematics and economics, but knew almost nothing about Austrian economics. By the spring of 1948, when he passed his oral exams, he had never heard of Austrian economics, except, as he later recalled, “as something that had been integrated into the main body of economics by Alfred Marshall sixty years before.”²⁷ Rothbard had a distinct recollection of his pre-Human Action economic worldview:

I had a definite, instinctive feeling or insight or whatever that there was something wrong with all the schools of economics. I was very unhappy with all the economic theory. I thought that the institutionalists, when the institutionalists were criticizing the orthodox, Anglo-American economics that they were right and, when the orthodox people were criticizing the institutionalists, they were right. The criticisms were right, and I believed that the simple supply and demand stuff was correct, but I didn't really have a good theoretical base. I wasn't happy with any theories offered. And then when I read Human Action, the whole thing just slipped into place, because everything made sense.²⁸

Shortly before he left FEE to work for the Volker Fund, Herbert Cornuelle asked Mises to keep an eye on the Columbia University graduate. He called him “one of the most outstanding liberal economic students I know” and mentioned that Rothbard would be interested in attending the NYU seminar.²⁹Some weeks before the publication of Human Action, then, Mises and Rothbard seem to have discussed Rothbard's project of writing a Misesian textbook on economics—a “guide for the intelligent layman.” After Mises's approval of an outline of the proposed book, Rothbard wrote to Cornuelle in November 1949, declaring that he was interested in the subject and that Mises had asked him to draft a representative chapter on “Money and Banking on the Unhampered Market.”³⁰

During those months, Rothbard took part in Mises's NYU seminar, which dealt that winter with Marxism and in the spring moved on to the discussion of other schools of thought. It reinforced the main message Rothbard had derived from reading Human Action: “From you I have learned for the first time that economics is a coherent structure, and I am sure that this has been impressed on the other members of the seminar as well.”³¹

By early January 1951, less than sixteen months after the publication of Human Action, Cornuelle and Mises had received the representative chapter. Cornuelle was enthusiastic about the work and Mises also thought that Rothbard would be the right person to write a textbook on Austrian economics—after getting his Ph.D.

He wrote to Cornuelle:

I think that Rothbard's Chapter on Money and Banking is very satisfactory. It certainly proves his ability to write a textbook much better than those I have had an opportunity to see. I hope he will continue his work as soon as he will have finished his thesis.³²

But Cornuelle did not wait. He offered Rothbard financial support from the Volker Fund so that the project could go forward. Rothbard began working for the Fund on January 1, 1952, and continued his intensive work for them for the next six years.³³

Murray Rothbard was the first in a long line of whiz kids who found a new intellectual home in Human Action and in Mises's seminars. Over the next fifteen years it happened with great regularity that highly gifted young men such as George Resch and Paul Cantor suddenly sought admission to the NYU seminar. Some of them even sought admission to Mises's residence. One day Mises was ready to go out for dinner when the doorbell rang. Two youngsters were standing at the door and offered a subscription to The Freeman magazine. Mises declined the offer, saying he was already on their mailing list. He did not know that this was his first contact with two of his most ardent followers: Ralph Raico and George Reisman.

Raico and Reisman were both fifteen years old. They had been reading The Freeman for a year or two and had also read some of Mises's books. Inspired, they had established “the Cob-den Club, an organization of right-wing students” to fight the good fight. One day they decided to pay their hero a visit and came up with the ruse of presenting themselves as salesmen. Fortunately, they then decided to do things the proper way and paid a visit to the FEE offices in Irvington, where they met with Ivan Bierly, who was so impressed by their knowledge that he asked Mises whether he would be willing to receive them. Within ten days the meeting was arranged, and the old man— who fortunately did not remember their faces—advised the boys “about the proper way to study economics and spend [their] time in college.”³⁴ He persuaded them that they had to invest more time learning about economics and liberty, rather than propagandizing theories that they did not really understand. As a token of his trust in their talents, he invited them to attend his NYU seminar—on the condition that they did not make noise.

They would attend his seminar for many years and became important advocates of Misesian economics. They both learned German on Mises's advice. Raico translated Liberalismus into English and Reisman did the same for Grundprobleme.³⁵