Wednesday, August 4, 2010

An Open Source Intelligence Profile of Ludwig von Mises

Most of the economic ideas behind the libertarian movement in the United States today can be directly traced to “Austrian school” economist Ludwig von Mises. This is the crowd whose persistent answer to almost all government mismanagement of the economy is to return to the gold standard.

Now, there is a certain irony here, because the von Mises crowd is quite loud, and not at all wrong, in arguing that the U.S. government is basically under the influence and control of a bunch of criminal oligarchs, who use the powers of the state to enforce their economic depredations upon hapless citizens. However, the von Mises crowd goes further, and argues that the very existence of government is a crime: these are the people who screech that taxation is an act of “violence.” They never seem to stop and consider what might happen if they actually succeeded in “drowning government in the bathtub.” The government would be gone – but what about the oligarchs? If the power of government is not available, what other options do citizens have to interpose between themselves and the oligarchs? Perhaps the von Mises crowd and the libertarians would argue that without the power of government which they control, the oligarchs would be reduced to nothing. This idea, of course, flies completely in the face of the evidence of the stupendous wealth and capabilities embodied by a modern multi-national corporation.

In intelligence work, one of the key questions to be answered is “who benefits?” So, who would benefit if the libertarian fantasy were ever actually carried into practice?

Often, this question, “who benefits?” can be answered by looking at who someone is associated with. In intelligence work, “guilt by association” is not just accepted, but often invaluable. In the case of Ludwig von Mises, there’s a lot of association, and thus a lot of guilt.

The Wikipedia biography of von Mises notes that while teaching at Vienna University from 1913 to 1934, also served as secretary at the Vienna Chamber of Commerce from 1909 to 1934. This should be ringing alarm bells for any competent intelligence officer on the European desk. Vienna has historically been a center of intelligence operations in central Europe. Moreover, during this period, the Austro-Hungarian empire was defeated in World War One, and broken up. From the perspective of the United States, with its world-historic role as the first successful self-governing republic, the key question upon the collapse of the Austro-Hungarian empire would center on the fate and intentions of the oligarchs who had ruled the empire.

So it is especially interesting that in his capacity as secretary of the Vienna Chamber of Commerce, von Mises became “one of the closest economic advisers” of Otto von Habsburg, the eldest son of Charles I, the last Emperor of Austria and last King of Hungary. The Hapsburgs had ruled this crucial area of Central Europe for over 800 years. Otto was Crown Prince from 1916 to 1918 and since his father's death in 1922, has been the Habsburg pretender to the thrones of Austria-Hungary. including the Kingdoms of Bohemia and Croatia. This fantasy has never really ended: in August 2004, Otto von Hapsburg helped establish in Austria the Black-Yellow Alliance, an openly monarchist movement, seeking to restore the “Dual Monarchy” of the Austro-Hungarian Empire, and re-unite Austria, Hungary, Croatia, the Czech Republic, Slovenia, and Slovakia under a hereditary monarchy. In January 2007, Otto formally relinquished his status as the Head of the House of Hapsburg to his eldest son, Karl Thomas Robert Maria Franziskus Georg Bahnam von Habsburg-Lothringen. In January 1993, Karl married Francesca Thyssen-Bornemisza. The name Thyssen would be familiar to any competent intelligence officer.

Not surprisingly, the “official” biography of von Mises at the Mises Institite does not even make one mention of the Hapsburgs .

In April 1947, von Mises joined with Friedrich Hayek, Karl Popper, Ludwig von Mises, Baron Lionel Robbins, Milton Friedman, and others to form the Mont Pelerin Society. Their stated aim was to “facilitate an exchange of ideas between like-minded scholars in the hope of strengthening the principles and practice of a free society and to study the workings, virtues, and defects of market-oriented economic systems.” The moving force had been Hayek, who openly stated that one of his two major influences had been Sir John Clapham, a senior official of the Bank of England, and president of the British Royal Society from 1940-46.

As Wikipedia notes, von Mises’
notable contribution [to economics] was his argument that socialism must fail economically because of the economic calculation problem – the impossibility of a socialist government being able to make the economic calculations required to organize a complex economy. Mises projected that without a market economy there would be no functional price system, which he held essential for achieving rational and efficient allocation of capital goods to their most productive uses. Socialism would fail as demand cannot be known without prices, according to Mises.
And then there is Hayek, who was also born in Vienna, and whose "paternal line had been raised to the ranks of the Austrian nobility for its services to the state, a generation before his maternal forebears were also raised to the lower noble rank.”

Hayek's first job after university was as an assistant to von Mises. From 1940 to 1943, Hayek wrote The Road to Serfdom, in which he "warned of the danger of tyranny that inevitably results from government control of economic decision-making through central planning."

A google search of “Mont Pelerin Society” found, among other things, this doozy from a group in Sweden that calls itself Red Ice Creations:
In a recent column in the Club of the Isles' flagship publication, the London Times, Washington, D.C. Sunday Times bureau chief James Adams candidly admitted that the banking houses in the City of London are now laundering $400 billion per annum in illegal narcotics profits. The British Commonwealth subsumes many of the world's most notorious flight-capital and hot-money havens. The Mont Pelerin Society, the radical-free market secret organization founded in 1947 by Friedrich von Hayek, and patronized today by Prince Philip, maintains the most accurate accounting ledgers on the world's underground economy. How is that possible? Because the Club of the Isles, since the era of the Opium Wars against China, and the escapades of Lord Palmerston's personal agent Giuseppe Mazzini in the last century, has been the leading sponsor and controller of global organized crime.
The importance of Club of the Isles control over organized crime cannot be understated. Lord William Rees-Mogg, a life peer in the House of Lords, a former editor-in-chief of the London Times, and British intelligence's current chief case officer for the propaganda war against U.S. President Clinton, has written recently that the world is moving into a post-industrial ``Third Wave'' paradigm, which will see the erosion of nation-states, and their replacement by a form of one-world ``electronic feudalism.'' In Rees-Mogg's Brave New World, only 5% of the population, the ``cognitive elite'' or what he calls the ``Brain Lords,'' will prosper and enjoy the fruits of modern technology. The vast majority of peoples of the world are doomed to a life of misery.
Given the prominent roles von Mises and Hayek played in articulating the radical free market theology that was brought to power with Margaret Thatcher and Ronald Reagan, it is useful to think of the Mont Pelerin Society as the Trilateral Commission of economics. In the section titled “Influence,” the Wikipedia entry on the Mont Pelerin Society states:
Hayek stressed that the society was to be a scholarly community arguing against collectivism, while not engaging in public relations or propaganda. However, the society has always been a focal point for an international think-tank movement; Hayek himself used it as a forum to encourage members such as Antony Fisher to pursue the think-tank route. Fisher went on to establish the Institute of Economic Affairs (IEA) in London during 1955, the Heritage Foundation in Washington, D.C., during 1973, the Manhattan Institute for Policy Research in New York City during 1977 and the Atlas Economic Research Foundation in 1981. In turn the Atlas Foundation supports a wide network of think-tanks, including the Fraser Institute.

Prominent MPS members who have advanced to policy positions include Chancellor Ludwig Erhard of West Germany, President Luigi Einaudi of Italy, Chairman Arthur F. Burns of the U.S. Federal Reserve Board, U.S. Secretary of State George Shultz, Prime Minister Ranil Wickremasinghe of Sri Lanka, Foreign Secretary Sir Geoffrey Howe of the U.K., Italian Minister of Defence Antonio Martino, Chilean Finance Minister Carlos Cáceres, New Zealand Finance Minister Ruth Richardson and President Václav Klaus of the Czech Republic. Eight MPS members, F. A. Hayek, Milton Friedman, George Stigler, Maurice Allais, James M. Buchanan, Ronald Coase, Gary S. Becker and Vernon Smith have won Nobel prizes in economics. Of 76 economic advisers on Ronald Reagan's 1980 campaign staff, 22 were MPS members.
Ironically, John Maynard Keynes wrote Hayek soon after The Road to Serfdom was published, “Your greatest danger is the probable practical failure of the application of your philosophy in the United States." A look at who was at the founding meeting of the Mont Pelerin Society reveals most of the big names at the University of Chicago Economics Department, including Milton Friedman's mentor, Frank Knight. Not surprising, since the University of Chicago was founded with direct input and funding from American oligarch John D. Rockefeller.

One of the former chairmen of the board of the Mont Pelerin Society is Dr. Edwin J. Feulner, Jr., president of The Heritage Foundation and trustee since 1973. In a profile of Fuelner by a husband and wife team of Christian radicals, the following is noted:
The Mont Pelerin Society 21 , was formed at Mont Pelerin in Switzerland in 1947, at a meeting of some of the leading families of the ancient European oligarchy, chaired by the economist, Friedrich von Hayek. Mont Pelerin's main thinktank is the London-based Institute for Economic Affairs (IEA). From there it expanded worldwide creating thinktanks.

" London Friedrich Hayek was creating an organization that would later re-form as the Mont Pelerin Society. The early group was formed in 1939 and was known as the Society for the Renovation of Liberalism. Members of the organization included Frank Knight and Henry Simons of the University of Chicago, the slavishly pro-British American Fabian Socialist Walter Lippman, the philosopher Sir Karl Popper, Sir John Clapham of the Bank of England, and of course, Ludwig von Mises.
All of these early members of Hayek's group then met at Mont Pelerin, Switzerland to form the influential, highly-secretive, and elitist Mont Pelerin Society in 1947...From the beginning the Mont Pelerin Society worked hand-in-hand with the Pan European Union..."
At this time, I do not have corroboration about the presence of “some of the leading families of the ancient European oligarchy.” However, the biography of von Mises on Wikipedia notes:
Fearing the prospect of Germany taking control over Switzerland, in 1940 Mises with other Jewish refugees left Europe and emigrated to New York City.[10] There he became a visiting professor at New York University, from 1945 until his retirement in 1969, though he was not salaried by the university. Instead, he earned his living from funding by businessmen such as Lawrence Fertig. For part of this period, Mises worked on currency issues for the Pan-Europa movement led by a fellow NYU faculty member and Austrian exile, Richard Coudenhove-Kalergi.
It is no stretch to assume that some portion of von Mises’ funding came through his association with the International Paneuropean Union, which Coudenhove-Kalergi founded in 1923. The Wikipedia entry on Coudenhove-Kalergi reeks of an old European oligarch:
Richard Coudenhove-Kalergi was the second son of Heinrich Coudenhove-Kalergi (1859-1906), an Austro-Hungarian count and diplomat of mixed European origin, and Mitsuko Aoyama (1874-1941). His father, who spoke sixteen languages and embraced travel as the only means of prolonging life, had prematurely abandoned a career in the Austrian diplomatic service. . . "The Coudenhoves were a wealthy Flemish family that fled to Austria during the French Revolution. The Kalergis were a wealthy Cretan family. The line has been further crossed with Poles, Norwegians, Balts, French and Germans, but since the families were selective as well as cosmopolite, the hybridization has been consistently successful." . . . The Kalergis family roots trace to the Byzantine royalty via Venetian aristocracy, connecting with the Phokas imperial dynasty. In 1300, Coudenhove-Kalergi's ancestor Alexios Phokas-Kalergis signed the treaty that made Crete a dominion of Venice.
When Coudenhove-Kalergi died in 1973, the person who became president of the IPU was none other than Otto von Habsburg.

Oh, yes, one last thing I should mention. While in the United States, one of von Mises' close friend was Ayn Rand.

Special Request: There is a recent book out entitled The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective. If anyone has read this book, could they please post a quick review, or at least a few thoughts.


  1. "Who benefits?"

    Isn't that how conspiracy theorists come up with their dreck?

  2. Who benefits? is how you plow through the "official" dreck to discover what's really going on. Closely related to "follow the money."