New Life

By mid-November, Mises had left both the front and the Scientific Committee.⁸⁹ The details of his departure from the latter are unknown, but it appears to have been part of a general improvement in his situation. From this point on, in fact, his life would continue to improve for quite a while. A few days after quitting the Committee he was promoted to the rank of Captain, and on December 3, 1917 (he had just started an eighteen-day leave in Vienna) he was ordered to join Department 10 of the War Ministry, the department for war economy.⁹⁰ The head of the department was one Colonel Linoch with whom Mises enjoyed very good relations. Linoch left him at liberty to engage in academic pursuits.⁹¹ Mises devoted as much time as possible to a new book with the working title of Imperialismus, ⁹² which would summarize his reflections on the war. He also resumed his teaching activities.

The winter semester had already started, so it was too late to set up a seminar, but Mises probably held Sunday lectures at the Volks-Bildungs-Verein.⁹³ If so, the experience dealt a heavy blow to his views about educating the masses. He said in his Notes and Recollections (1940), he now realized that the classical liberals had over-estimated the ability of the common people to form independent judgments.

In the spring and summer of 1918, he directed a university course on banking theory and advised several students on what to read and which subjects to study.⁹⁴ Women would not be admitted to the department of law and government science for another year, but most participants of Mises's course were young ladies. Because of the war, there were few male students left in Vienna. His female students were probably from the department of philosophy, which had admitted women since 1897.

Among the few male students was Dr. Richard von Strigl, who had been a fellow student in Böhm-Bawerk's seminar. Strigl would become one of the most important and influential Austrian economists in the interwar period. The presence of Strigl and of Helene Dub, wife of the economics editor of the Neue Freie Presse, highlighted a particular feature of university seminars in those days. The seminars were not mere schooling functions, but also provided a forum for discussions among senior members who were often on a par with the lecturer. Each session began with a presentation on the subject of the day, usually delivered by one of the students. Then Mises commented on both the presentation and the subject itself, and answered questions from other participants.

On May 18, Mises was promoted from an unpaid private lecturer's position to the rank of professor extraordinarius.⁹⁵ This position does not have an equivalent in the American university system. An extraordinarius position is not a titled full professorship and is unpaid, but it does include tenure and enjoys greater social prestige than does an associate professorship.

Another welcome event for Mises was his new personal acquaintance with Max Weber.⁹⁶ The German scholar was already a living legend, but he had not lectured for more than ten years, pursuing his studies in private at the University of Heidelberg. Weber now celebrated an unexpected and spectacular comeback in Vienna, and attracted huge crowds of students and professors. His encounters with Mises produced mutual admiration. Much of what Mises wrote in the late 1920s on the logical and epistemological problems of economic science was in reaction to Weber's position. And in his university courses and private seminar, Mises relentlessly encouraged the study of Weber's work. Weber in turn praised Mises's theory of money as the “most acceptable” in print. And he seemed to have learned a few things from his young colleague in Vienna. During Weber's 1918 stay in Vienna, Mises convinced him that there was in the social sciences a discipline separate and distinct from history. Economic theory was a truly scientific discipline. Its subject matter was the analysis of the relationships between means and ends, an analysis that could be performed without making value judgments.⁹⁷ Moreover, Mises persuaded Weber that economic rationality—that is, economic calculation—would be absent in a socialist commonwealth.⁹⁸

As the wartime welfare state continued to grow, Mises continued to prefer private alternatives, not just in theory, but in the actions he took in his own life, from the improvement of his family's food supply (even the black market was deteriorating) to the professional placement of friends and colleagues eager to get away from the front.⁹⁹ Mises was known to be responsive to calls for getting people out of the death zone and into an administrative position in Vienna or elsewhere.¹⁰⁰ He was often helped in these missions of mercy by his friends Victor Graetz and Ludwig Bettelheim-Gabillon.¹⁰¹

Mises's success in placing others was at least in part due to his increased notoriety. His courageous public opposition to the war party and its claims for the economic benefits of military expansion had not changed policy, but it had attracted interest to him and his work. He had become a public figure when he was invited to lecture on Austrian public finance to the plenary meeting of the Advokatenwählerverein, an electoral association of lawyers.¹⁰² It is likely that Mises addressed the same themes he had two months earlier in an article for the Neues Wiener Tagblatt.¹⁰³ In this piece, he characterized Austrian tax law as the patchwork product of 100 years of tax reforms, errors, and competing special interests. And he vigorously criticized the government's plan to introduce a one-time emergency tax (Sonder-abgabe), warning that the new tax would become permanent, and arguing that sound financial policies must consider both government revenue and government expenditures. His lecture was a great success. On Monday, March 11, 1918, Mises started a 15-year public career as the economist of Austria.

In May 1918, the Office for the Defense Against Enemy Propaganda invited him to lecture on the “Significance of the War Bond.” The lecture took place in the context of an “information course” for officers who were to offer patriotic instructions to the troops.¹⁰⁴ The main purpose of the Office was to promote k.u.k. war bonds. But Mises was unwilling to be an instrument of propaganda and made instead a compelling case for free-market war finance. He especially emphasized the perils of financing the war through inflation. The speech was published from stenographic lecture notes without giving Mises the opportunity to review the transcript.¹⁰⁵