Hayek – Courageous Endeavors With Some Success
A short appreciation of F. A. von Hayek’s academic ventures
prior, during and after World War II.
It is 2022, and lest we forget one of the most seminal minds and audacious scholars of our time, we should recall some lesser known qualities of Friedrich A. von Hayek. He was born on May 8, 1899 and died 30 years ago in Freiburg/Br.
Unless we can make the philosophic foundations of a free society once more a living intellectual issue, and its implementation a task which challenges the ingenuity and imagination of our liveliest minds,
the prospects of freedom are indeed dark.
I
Hayek – Courageous Endeavors With Some Success | With a ruined currency, cut off from the fertile farmlands and resources of its former Crown lands and with only about 0.5% of its coal reserves left, the vast Habsburg empire of some 50 million collapsed in 1918. Suddenly reduced to a small land-locked country of barely 7 million people, the emerging Austria struggled for its economic survival. During the appalling economic and political conditions that prevailed in the years following WW I, various ideas of the “Anschluss” to Germany were soon commonly discussed. Before long a despicable racist bias also began to creep into public life and became a venomous issue especially within academia. As a result, numerous creative intellectual circles, seminars and institutes developed in Vienna outside the traditional university institutions.
After Friedrich von Wieser, Hayek’s teacher and the last leading scholar of the Austrian School’s 2nd generation retired in 1922, a void with paralyzing conflicts between different political camps began to impede the working environment at the University of Vienna. The tradition of the Austrian School was thrown into serious jeopardy. With not much hope for any decent academic position, Hayek and many of his fellow graduates and colleagues thus flocked into the “Privat Seminar” which Ludwig von Mises conducted in his office at the Vienna Chamber of Commerce until the worsening political circumstances compelled him to move to Geneva in 1934.
Like their mentor, most of the seminar participants also started to think about leaving the country. And when Hans Mayer forced all political opponents and all Jewish members to resign from the Austrian Economic Society, he terminated in effect the school’s existence in Vienna. With Hayek in London, Gottfried von Haberler and Joseph A. Schumpeter at Harvard, Ludwig von Mises in New York, Fritz Machlup in Buffalo, and numerous other affiliates scattered around the world, Vienna ceased to be the stronghold of Austrian Economics. The devastating “brain drain” from Austria reached its peak and turned into a “brain gain” primarily for the US and the UK.
II
Shortly after Hayek has presented his challenging lectures on ‘Prices and Production’ at the London School of Economics, he was offered a full position there. Fully aware of the rapid deterioration of the political conditions in Austria, and after quite some pondering he accepted and moved to London in the early fall of 1931. Shortly after he has settled into the new and rather unfamiliar surroundings with organizing the life for his family in London and despite the fact that he was engaged in a full scale academic debate with John Maynard Keynes, he started to support his friends in Vienna with modest funds and words of encouragement. Hayek also tried to keep in touch with like-minded scholars elsewhere who were either terrorized, forced to leave their jobs, or were otherwise deprived of any outside contacts.
To that end and even though he was already featured on the Nazi watch list, Hayek traveled to Vienna in mid-April 1939 for the last time before the beginning of WW II. Among other tasks, Hayek tried there to reclaim L. von Mises’ manuscripts, personal documents, books and some family valuables which undercover Gestapo agents had confiscated earlier from Mises’ apartment in downtown Vienna. Regretfully, Hayek’s efforts came too late as the Nazis had already shipped some 30 boxes to Berlin for further inspection, processing as well as illegal appropriation. However, by sheer accident in 1992 Mises’ meticulously catalogued manuscripts, clearly marked as “Fund #623-Ludwig von Mises” were discovered by two eminent Austrian historians in a former secret KGB archive, outside Moscow. Apparently most of Mises’ academic material and personal documents were taken by the Soviet army after the fall of Berlin and were transferred to Moscow to be studied by the KGB.
At the end of April 1939, on his return from Vienna to London, Hayek briefly stopped in Paris to meet with L. v. Mises, W. Roepke, M. Polanyi and J. Rueff with the aim to discuss the founding of an International Center for the Revival of Liberalism (a sort of intellectual forerunner of the “Mont Pelerin Society”). However, due to the dismal political situation this endeavor too regretfully proved futile and the center ceased to exist soon after Nazis troops occupied Paris.
III
Back in England and only days after Great Britain and France declared war on Hitler’s German Reich, Hayek made himself available. Frustrated and deeply troubled by the unfolding catastrophe, Hayek approached Harold Macmillan, an outspoken opponent of the appeasement of Germany and offered some help. First Hayek proposed to improve Britain’s clumsy anti-Nazi propaganda by suggesting ways and means to penetrate Hitler’s firm grip on the media. He also gave very detailed and practical advice of how, when and where to smuggle printed anti-Nazi material into Germany. And among several other ideas, he even translated the concluding paragraphs of Friedrich von Schiller’s famous historical essay on the ‘Legislation of Lycurgus’ for the BBC and suggested to replace Hitler for Lycurgus and Germany for Sparta. Although Hayek’s splendid adaptation of Lycurgus, the King of Sparta reads like the account of Hitler’s seizure of power in the German Reichstag, his efforts failed to impress the authorities, most probably due to its intellectual sophistication and the lack of assumed knowledge. With little ability to actively help his friends in Vienna or elsewhere, he immersed himself in working on his The Road to Serfdom, that became a bestseller during the years immediately following WW II. As a byproduct of this book, Hayek circulated a note on the significance of the German ‘New Order’ and warned the British public directly, that due to their philosophical and political tradition and upbringing, Germans mainly do not comprehend any order which is not organized from the top. It seems likely that Churchill’s regular BBC addresses were intellectually and politically inspired by Hayek’s efforts.
When Hayek learned about Ludwig von Mises’ desperate escape from Geneva through occupied France to Lisbon and his ordeal until he arrived penniless in New York, he alerted his old Viennese colleagues who meanwhile have settled in the US and organized help. Within weeks Machlup, von Haberler, Felix Kaufmann, Herbert von Fuerth and a handful of other refugees started to support their distressed and needy former teacher with some funds and other supportive actions. Among them was an invitation for Mises to write several short but well paid essays for the monthly journal The Voice of Austria. Headquartered in New York, the periodical was in large parts generously funded by Archduke Otto von Habsburg’s family. The Voice of Austria was in circulation only in the US and provided Austrian intellectuals, refugee scholars and expats at least with a temporary intellectual home during the war.
In 1943 about 2 years prior to the end of WW II, Hayek circulated a strictly confidential note between his English friends and a number of influential, well-connected Austrian refugees in London. In this memorandum he compellingly recommended the foundation of An English Speaking College of Social Studies for Central Europe. He suggested to establish this institution in Vienna as soon as the war ended. In considerable detail he outlined his vision of such an interdisciplinary small, private university where Economics, Law, Philosophy, History, Anthropology and Sociology ought to be taught.
Although, his idea was met with enthusiasm and a great deal of good will, for the time being and much to Hayek’s regret this initiative failed as wartime England was focused on more obvious problems. Although Hayek realized that London, still under random bombing raids was not the right place to lobby for his dream he did not give up. Shifting his efforts, Hayek started to raise the necessary funds with the intention to bring the philosopher Karl R. Popper, another Viennese refugee from New Zealand permanently to the London School of Economics. Notwithstanding that Popper could only accept the position at the LSE in 1946, Hayek’s endeavor at last was successful in getting his friend to join him in London.
IV
When in 1944 Archduke Robert von Habsburg founded the “Committee Justice for South Tyrol” in London in order to persuade Prime Minister Churchill to negotiate a return of South Tyrol to Austria after the war, Hayek spontaneously joined the group. He published several interesting essays on the subject of South Tyrol and tried also to promote his idea of founding a German speaking university in Bolzano (I) to counter Italy’s ‘Italianization’ policy in South Tyrol. Although this endeavor proved unsuccessful and ceased to exist after shortly the war, Hayek continued his engagement for South Tyrol until well into the late 1970s. In the early 1990s a small university was eventually founded in Bolzano.
Just days before Hayek’s eminent book The Road to Serfdom appeared in London in April 1944, he delivered a visionary talk at Cambridge University’s Kings College. Here again he passionately warned the audience that it might well be that the eventual collapse of Nazi-Germany will cause such utter devastation and social instability in Central Europe that parts of it could become an easy prey for Stalin’s oppressive strategy and thus might disappear from the orbit of the European civilization for quite some time. Although, his alarming lecture was met with enormous interest, it had no lasting effect. However, it could very well be that Churchill’s 1944 “Project Unthinkable” (in which an allied assault on the Soviet Union after the defeat of the Nazis was contemplated) had some bearing on Hayek’s The Road to Serfdom.
Mainly due to Fritz Machlup’ tireless efforts, in September 1944 The Road to Serfdom finally appeared also in the United States. In early 1945, after “Reader’s Digest” had published a superbly condensed version of this book, Hayek was invited to an extensive lecture tour through the United States and delivered his powerful message mainly at universities, rural colleges or town halls. The unforeseen success of the condensed version and also of the tiny booklet The Road to Serfdom in Cartoons which was first published by ‘Look Magazine’ as a Thought Starter #118, made Hayek an instant celebrity and his US speaking tour a personal triumph. While the war still ferociously fought in Europe, Hayek wherever he appeared on stage in the US promoted the idea of the foundation of an International Academy for Social Philosophy in Vienna.
Hayek returned to England at the day of Nazi Germany’s unconditionally surrender to the Allies in Reims on May 8, 1945 and soon thereafter he met with Anthony Fisher in London. For Fisher, a decommissioned Royal Air Force pilot, The Road to Serfdom was a life changer and Hayek persuaded him to found a private research institute, dedicated to the analysis and the understanding of the fundamental institutions of a free society. After some hard work Fisher founded the ‘Institute for Economic Affairs’ (IEA) in London which is still among the leading free market oriented think tanks.
V
About four months after the end of WW II in Europe, Hayek somehow obtained permission from the allied military authorities for a short visit to Paris and Zurich in order to meet among others with Profs. Perroux, Rueff, Roepke and Albert Hunold – an influential Swiss businessman. Back in London, Hayek quickly drafted another Memorandum in which he proposed the Foundation of an International Academy for Political Philosophy and suggested to call it ‘The Acton-Tocqueville Society’. However due to the prevailing dire conditions on the continent only after several attempts and with the help of Jacques Rueff, Hayek’s proposal could be distributed to some relevant scholars. And on April 1, 1947 Hayek succeeded to bring together about 40 academics (including three future Nobel Laureates) from 10 different countries at Mont Pelerin above Vevey, Switzerland in April 1947. The result of this meeting was the foundation of the Mont Pelerin Society.
Like Germany and Berlin, Austria and Vienna were divided into four occupation zones. Thus, Vienna like Berlin, was an isolated island surrounded by marauding Soviet troops in the middle of the larger Soviet occupation zone. And yet, against all odds Hayek was able to get permission from the allied authorities to visit Vienna partly totally flattened with bombs. After having seen surviving family members and friends and having witnessed the extensive damage and the sufferings the war has caused there, Hayek returned to London in a state of shock and wrote an alarming article for the popular press in which he blamed the occupation forces not only for treating Austria much worse than other countries which joined Nazi Germany voluntarily. In sharp words he also made a strong case for an immediate ending of the military occupation by the Allies, because they have prevented the Austrians from helping themselves.
Though, his efforts were in vain, Hayek did not rest and tried hard to urge several of his current and former colleagues for help to get the intellectual reconstruction of Austria on its way. To him, the intellectual reconstruction of Austria was just as important as its political and economic reconstruction. He worked tirelessly in the postwar years in an attempt to rejuvenate Austria’s proud tradition in economics and the humanities.
For that purpose, in early September 1946 Hayek traveled to Vienna again in a daring attempt to help ease the unbearable conditions of Viennese universities by evading the censorship enforced in the occupation zones. Encouraged by the eagerness of returning soldiers to continue their studies and regain contact with the Western academic world after almost 8 years of Nazi imposed isolation, Hayek made plans to stock the Austrian National Library in Vienna with appropriate more current books and journals.
Back in London, he approached mostly well connected former Austrian scholars and suggested to set up a small organization with Hayek in the chair. His dramatic appeal to pull together the most important books and periodicals bearing on the humanities and the social sciences published since the Nazis took over was successful and soon led to the foundation of an Austrian Book Committee. In the summer of 1947 he spent again a week in Austria lecturing at the forerunner of the “European Forum Alpbach“, an initiative founded by two Austrians in 1945. Hayek liked the interdisciplinary settings in a small village in the Tyrolean mountains and encouraged many of his friends not only to participate, but also to donate their newest publications to the Austrian Book Committee.
Among many others, the philosophers Popper and Feyerabend, the physicist Schrödinger, or the economists Gottfried von Haberler, von Fuerth, Machlup, von Mises or Oskar Morgenstern eagerly contributed to his efforts. When he returned to London, the Austrian Book Committee had already collected some 2,500 books and the rather complex shipment to Austria was about to be arranged. In Spring 1948 Hayek went to Vienna to organize and oversee the distribution of the books and to his deep disappointment had to witness the appalling and hampering bureaucratic procedures at the allied customs and the Austrian authorities. Frustrated by his choked efforts soon thereafter he recommended to wind down and terminate the operation by spending the already raised funds.
Supported by the Rockefeller Foundation, but mainly financed by a small group of determined Austrian entrepreneurs who endured the Nazi regime and the war, in July 1948 Hayek was able to organize a reunion of former members of L. von Mises’ famous “Privat-Seminar” in Vienna. Almost the entire surviving 3rd and 4th generations of the Austrian School of Economics reunited in Vienna and conducted a kind of summer school at the premises of the Julius Meinl Company.
Formal lectures and seminars alternated in a structured fashion and the main texts used were von Mises’ Nationalökonomie (1940), von Haberler’s Der internationale Handel (1933), von Hayek’s Preise und Produktion (1931) and The Road to Serfdom (English 1944), and Machlup’s Führer durch die Krisenpolitik (1934), etc. Although, this first reunion of the Austrian School’s members of the 3rd and 4th generations after the war was a major success and highly appreciated by the attending students and its entrepreneurial sponsors, this unique and very promising summer school in Vienna could not be repeated predominately due to the systematic obstruction of the Soviet occupation forces, ideological boycott of the Socialist Party and local political reasons.
While in Vienna Hayek lectured on The Political Consequences of Central Planning at the invitation of the newly reestablished Federation of Austrian Industrialists. Although his arguments were spontaneously interrupted with ‘standing ovations’, his lecture caused serious political irritations mostly at the Austrian Socialist Party (SPÖ). It should be noted here that due to serious Soviet political pressure, a German translation of The Road to Serfdom was available in Austria only after 1949.
On his way back from Vienna to London, Hayek briefly met some likeminded Swiss scholars in Interlaken, among them W.A. Jöhr, E. Küng, F.A. Lutz, A. Amonn or K. Brunner. This meeting developed into the “Interlaken Economic Talks” of the 1960s and 1970s, initiated by K. Brunner.
VI
When Hayek joined the University of Chicago’s “Committee on Social Thought” in the fall of 1950, traveling to Europe became much more expensive and time consuming. However, his efforts to revive the academic tradition of the Austrian School of Economics in Central Europe only somewhat slowed down. In order to raise the awareness for the depressing situation of Austrian universities, Hayek wrote several elaborate and urgent memos for a number of private US foundation and suggested the foundation of a small institute to make fundraising easier. His lobbying efforts during the 1950s paid off and led to the establishment of the Austrian Institute, Inc. in New York in the fall of 1954. In a confidential draft for the Institute, Hayek not only went at great length to demonstrate the seminal contributions to science that were made by scholars at his Viennese alma mater. He also listed numerous first class scholars who have achieved a considerable international reputation and could possibly help to revive the old tradition of the Austrian School of Economics.
On the political side he claimed that Austria’s “Neutrality Treaty” which was signed in May 1955 could offer an exceptional opportunity to restore the University of Vienna as a main intellectual fort at the boundaries of the West. When the Soviet Union brutally crushed the Hungarian Revolution in the fall of 1956, Hayek wrote another memorandum in which he emphasized the global importance of Austria in the struggle for Western Culture and freedom and asked for the foundation of An American Committee for Vienna University. With the Austrian Ambassador to the US, Karl Gruber as Honorary President and any number of well-connected names on its board, it was established on March 1, 1957. Shortly thereafter Hayek started lobbying and tried hard to get among others, the philosopher Sir Karl R. Popper and the art historian Sir Ernst Gombrich back to Vienna. However, regretfully both his efforts failed, mostly due to the strict opposition of the Austrian Socialist Party.
In his new Proposal for the Creation of an Institute of Advanced Human Studies in Vienna he outlined in some detail the projected institutes’ tasks, structure, and academic mission, and presented his idea to several private US foundations. In June of 1959 Hayek traveled to Vienna and had there several quite promising meetings with three Austrian federal ministers, which led eventually to the creation of the “Institute for Advance Studies, Vienna”. Due to a major contribution from the Ford Foundation, the institute quickly became also known as the Ford Institute and Hayek was in residence there during the spring of 1963.
However, as so many good things in Austria, also this institution was soon subjected to some heavy-handed political influence and actions. Thus, especially during the 1960s and 1970s the orientation of the Institute for Advanced Studies shifted to the political left and changed its academic direction towards a more quantitative, econometric, and macro-economic approach.
While in Austria, Hayek was offered a professorship at the University of Vienna in 1962. Although, he was pleased and flattered by the generous offer, Hayek turned it down mostly due to the unscholarly, political and systematic polemics against him which continued until the mid 1980s in Austria, Germany and elsewhere. However, in the same year he helped founding the innovative International Freedom Academy (INFRA) in Vienna, which in scope, direction, and organization was modelled after The Institut d’Etudes Politiques, based in the Principality of Liechtenstein. Despite his hard work, INFRA regretfully ceased to exist after only about 3 years, again predominately due to the appalling bureaucratic and political hurdles. However, parts of its academic tradition are carried on by the European Center of Austrian Economics Foundation (ECAEF), that was established in the Principality of Liechtenstein, Europe’s last stand of academic independence, political freedom and individual responsibility.
VII
In the fall of 1962, only a few months after Hayek had declined the offer made to him in Vienna, he decided to leave the University of Chicago and accepted a professorship at the University of Freiburg/Breisgau. He taught there until 1968 and thus moved closer to his native Austria. As a passionate mountaineer, Hayek could also regularly spend his summer vacations in the Austrian Alps, usually in the Tyrolean village of Obergurgl.
When in 1967, the conservative Federal Chancellor of Austria urged Hayek to apply for the presidency of the Austrian National Bank, one of the most prestigious and well paid positions, he again declined mostly on grounds of systematic partisan obstruction and the expectation of a predominantly administrative workload. It seems to be very typical for Hayek’s uncompromising devotion to scholarship that he apparently left a country the moment he was offered any major political position. Shortly he retired from the University of Freiburg/Br., in 1969 he accepted a professorship at the University of Salzburg which he held until 1977.
Against many odds, Hayek nevertheless continued his ambitions to revive the interest for the Austrian School of Economics in his superbly crafted, thought-provoking, and most elegantly conducted classes and seminars on the history of economic thought or some selected topics in economic theory. A few months after the death of Ludwig von Mises in October 1973, he tried one last time. In an attempt to help Margit von Mises, Hayek tried to acquire L. von Mises’ unique collection of books with the intention to merge it with his own extensive library. Due to a total lack of private funding and of adequate administrative support, this unique chance to put together worldwide the most comprehensive research library for the Austrian School of Economics was missed and sadly wrecked his last endeavor.
Kurt R. Leube is the Academic Director of ECAEF (European Center of Austrian Economics Foundation), a leading think tank headquartered in Vaduz, Principality of Liechtenstein.
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