The Long Visit at New York University

One great limitation to Mises's effectiveness in spreading the gospel of liberty was that he lacked an academic base. Like most other champions of the free market, he frequently lectured to businessmen and other civic leaders. But he had no direct impact on future intellectuals who studied at the universities. It was quite often a frustrating experience for him. In a letter to Machlup he wrote:

Again and again various organizations invite me to refute Marxism and the union doctrine (which are held to be identical), and as an aside also Keynes and Hansen, in a short paper that can be read in not more than thirty minutes and which every high-school graduate can easily understand. “Refute Marx, but don't use high-brow terms such as value, dialectical materialism, average rate of profit, etc. Refute Keynes, but do not speak of the multiplier, of liquidity preference, etc.”¹⁵

Unlike many of his former students and associates, Mises had been unable to obtain a suitable position at one of the major universities.¹⁶ He had offers from smaller schools such as the University of Rochester, but would not settle for secondrate institutions. At some point in 1944, some of his friends and admirers in New York took the initiative to provide him a visiting professorship at New York University. Led by Lawrence Fertig, an NYU trustee, these men eventually came to an agreement with NYU's Graduate School of Business Administration: the School would invite Mises to give an economics seminar, and Mises's salary would be from private funds.¹⁷ This arrangement continued on a regular basis. Mises started his classes in February 1945.¹⁸ He was a “visiting” professor at NYU for more than twenty years.¹⁹

Mises's NYU seminar met in the Gallatin House on the campus of NYU

Despite the humiliating circumstances, the seminar proved to be an enormous success. From the outset, it was not only attended by NYU business students, but also attracted a colorful group of personalities from outside: journalists, businessmen, writers, and students from other universities. In a manner reminiscent of Mises's seminars in Vienna, it became a rallying point for New York-based intellectuals interested in the scientific case for laissez-faire, as well as a point of attraction for visitors from abroad. In Vienna, the Mises Circle would move from Mises's Kammer offices to Ancora Verde for dinner, then to the Café Künstler to continue the conversation late into the night. In New York, the participants in Mises's NYU seminar could follow the classroom session by joining their professor in Child's Restaurant, followed by the Café Lafayette.

Seminar students such as Hans Sennholz, William Peterson, George Reisman, Israel Kirzner, and Ralph Raico eventually formed—together with Murray Rothbard—the solid core of Misesians to hold out through the long libertarian winter of the 1960s and 1970s, thus enabling the breakthrough of Misesian ideas of the 1980s and 1990s. Mises inspired them to contribute to the great project of hammering out a systematic and encompassing libertarian philosophy—a project that had attracted courageous and innovative thinkers from the time of the sixteenth-century Spanish late scholastics to the time of the Manchester School. In retrospect, the results can only be called amazing. It is one thing indeed for students to follow the example of a passionate and encouraging teacher. It is quite another thing to actually produce anything of value. A surprising number of Mises's NYU students later became important scholars and even pioneers in economics, history, and philosophy.

One example of the international significance of the seminar was the case of the Japanese students drawn to attend. Mises's prewar work had been favorably received in Japan and several professors from this far-eastern country had taken part in his Vienna seminar. After the war, a correspondent from the Yasuda Bank wrote Mises that his Theory of Money and Credit had “made a very strong impression in Japanese financial circles and is regarded most highly.”²⁰ The impact would increase when a Japanese edition appeared in May 1949—just in time to provide intellectual ammunition against the wave of Keynesianism that swept the country with the American occupation forces.²¹ One classical-liberal from Japan later recalled the chain of events in his country:

The names of von Mises and Hayek are well known in Japan. The latter's Road to Serfdom was published, during the War about the time when Japan started experimenting in state socialism; my own experience confirms completely the exactness of the professor's prognostications. When the War was over, we had to throw everything overboard and I expected a return to free enterprise. Then a curious thing happened; the Americans arriving in Japan in the wake of the landing forces started putting into effect policies which were hardly distinguishable from state socialism!²²