Preparing the Counter-Revolution

By March 1945, Yale University Press had decided to publish an American edition of Nationalökonomie. The idea of a simple translation was never really an option. All sides agreed to publish a revised edition.⁷⁰ For the next three and a half years, Mises worked busily on this project. The revisions were not to be substantive. Their primary purpose was to adapt the work to the intellectual background of his American readers. In this task, Mises benefited enormously from the experience of Henry Hazlitt and Yale editor Eugene Davidson, both of whom suggested many areas of improvement. For example, Mises now dealt with doctrines and policy proposals that had specific importance in the United States, such as the Georgist theory of land taxation.⁷¹ But he especially modified his discussion of the fundamental philosophical problems of the science of human action. For example, in his German book, Mises felt he had to refute Othmar Spann's “universalist economics” in great detail; he now dropped this discussion almost entirely and focused instead on the refutation of positivism and the use of quantitative methods in economic theory.

He added an entirely new chapter—the only chapter with no counterpart in Nationalökonomie—to discuss the basic problems of probability theory, which was at the heart of the quantitative approach that dominated economic analysis in the Anglo-Saxon countries. In this chapter, Mises seized the opportunity to build on and elaborate the works of his brother Richard, who had pioneered the so-called relative-frequency theory of probability. Mises considerably simplified the axiomatic exposition of the theory and argued, without mentioning his brother by name, that the standard account was redundant.

Beyond the scholarly aspect of this contribution, the correction of his brother was a sequence in a typical “Austrian” literary squabble. Twelve years earlier, Richard had ventured into the field of his elder sibling, and claimed in one of his books thatlaissez-faire policies had no scientific merit.⁷² Now Ludwig struck back by demonstrating what an elegant exposition of the relative-frequency theory looked like.

Human Action almost became Mises's first posthumous publication. In October 1948, he and Margit had a very serious car accident.⁷³ But the couple survived and Ludwig put the finishing touches on the book by the spring of 1949. He sent copies of the manuscript to receptive publishers and friends, among them Jasper Crane, who ran the Van Nostrand Publishing Company and whom he knew well through FEE.⁷⁴