Hayek: A Collaborative Biography: Part XI: Orwellian Rectifiers, Mises’ ‘Evil Seed' of Christianity and the ‘Free’ Market Welfare State (Archival Insights into the Evolution of Economics) 9783319774275, 9783319774282, 3319774271

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ARCHIVAL INSIGHTS INTO THE EVOLUTION OF ECONOMICS

Hayek: A Collaborative Biography Part XI: Orwellian Rectifiers, Mises’ ‘Evil Seed’ of Christianity and the ‘Free’ Market Welfare State

Robert Leeson

Archival Insights into the Evolution of Economics

Series Editor Robert Leeson Stanford University Stanford, CA, USA

This series provides unique insights into economics by providing archival evidence into the evolution of the subject. Each volume provides biographical information about key economists associated with the development of a key school, an overview of key controversies and gives unique insights provided by archival sources. More information about this series at http://www.palgrave.com/gp/series/14777

Robert Leeson

Hayek: A Collaborative Biography Part XI: Orwellian Rectifiers, Mises’ ‘Evil Seed’ of Christianity and the ‘Free’ Market Welfare State

Robert Leeson Department of Economics Stanford University Stanford, CA, USA and Notre Dame Australia University Fremantle, Australia

Archival Insights into the Evolution of Economics ISBN 978-3-319-77427-5 ISBN 978-3-319-77428-2  (eBook) https://doi.org/10.1007/978-3-319-77428-2 Library of Congress Control Number: 2018934642 © The Editor(s) (if applicable) and The Author(s) 2018 This work is subject to copyright. All rights are solely and exclusively licensed by the Publisher, whether the whole or part of the material is concerned, specifically the rights of translation, reprinting, reuse of illustrations, recitation, broadcasting, reproduction on microfilms or in any other physical way, and transmission or information storage and retrieval, electronic adaptation, computer software, or by similar or dissimilar methodology now known or hereafter developed. The use of general descriptive names, registered names, trademarks, service marks, etc. in this publication does not imply, even in the absence of a specific statement, that such names are exempt from the relevant protective laws and regulations and therefore free for general use. The publisher, the authors and the editors are safe to assume that the advice and information in this book are believed to be true and accurate at the date of publication. Neither the publisher nor the authors or the editors give a warranty, express or implied, with respect to the material contained herein or for any errors or omissions that may have been made. The publisher remains neutral with regard to jurisdictional claims in published maps and institutional affiliations. Printed on acid-free paper This Palgrave Macmillan imprint is published by the registered company Springer International Publishing AG part of Springer Nature The registered company address is: Gewerbestrasse 11, 6330 Cham, Switzerland

Contents

1

Orwellian Rectifiers and the ‘Free’ Market Welfare State 1

2

The Economic Consequences of Blind Faith 45

3

The Politicization of Academia 87

4

‘Financial Considerations’ and the ‘Free’ Academic Market 115

5

‘Consistent Doctrine,’ ‘The Morals of the Market,’ and the ‘Filthy Load of Pinks’ 181

6

The Fall of Left Utopia and the Rise of ‘Free’ Market Euphoria 261

7

The Sovietization of American Universities: ‘Intellectual Orgies’ and ‘the “Nonconcept” of Education’ 299

8

Mises’ ‘Evil Seed’ of Christianity 357 v

vi     Contents

9

‘German Villains and Austrian Victims’ 395

10 Who Lies Behind the ‘Free’ Market? 453 Bibliography 481 Index 535

1 Orwellian Rectifiers and the ‘Free’ Market Welfare State

1 Journalists and the ‘Free’ Environmental Market The Österreichische (Eastern Reich, Austrian) School of Economics was founded by Carl Menger (1840–1921) and developed in its second ­generation by • Eugen Böhm Ritter von Bawerk (1851–1914) • Friedrich ‘Freiherr von’ Wieser (1851–1926). The third generation was led by • • • •

Othmar Spann (1878–1950) Hans Mayer (1879–1955) Ludwig ‘Elder von’ Mises (1881–1973) Joseph Schumpeter (1883–1950).

The fourth generation (and its epigones) was (and, it seems, still is) ­presided over by © The Author(s) 2018 R. Leeson, Hayek: A Collaborative Biography, Archival Insights into the Evolution of Economics, https://doi.org/10.1007/978-3-319-77428-2_1

1

2     R. Leeson

• Friedrich ‘von’ Hayek (1899–1992) • Murray Rothbard (1926–1995). Included among the epigones (almost all Mont Pelerin Society, MPS, members) are • Hillsdale College President, George Roche III (1935–2006); and a (Presuppositionalist?) ‘Misean for life’ Luftwaffe bomber pilot, Hans Sennholz (1922–2007), who ‘almost alone among eminent free enterprise economists, rests his defense of a free society on revelation … divinely revealed information’ (Chapter 7, below); • three devout Presuppositionalists, the self-appointed ‘Tea Party Economist’ and public stoning theocrat, Gary North (1942–); MPS President, Peter Boettke (1960–); plus Timothy Terrell (1973–), Mises Institute Scholar, Cornwall Alliance for the Stewardship of Creation Senior Fellow, and Heartland Institute ‘policy advisor’1; • Frederick Nymeyer (1897–1981), disciple of Dutch Calvinism, the Christian Reformed Church and the ‘free’ market (of which he was a major funder), Mises’ self-described ‘protégé’ and quasi-follower of the Presuppositionalist, Rousas J. Rushdoony (Chapter 8, below); • two of Hayek’s University of Chicago Ph.D. students, Ralph Raico (1936–2016) Professor of History, Buffalo State College; and Ronald Hamowy (1937–2012), Professor of Intellectual History, University of Alberta; plus one of Mises’ New York University (NYU) ­students, George Reisman (1937–), Professor of Economics, Pepperdine University; • the co-founder of the Ludwig von Mises Institute, editor of the ‘free’ medical-and-drug industry Private Practice, and suspected co-author of the racist and homophobic Ron Paul Newsletters, Llewelyn Rockwell Jr. (1944–); Walter Block (1941–), the editor of the Mises Institute’s I Chose Liberty (2010); plus the official Last Knight of Liberalism biographer and Mises Institute Senior Fellow, Guido Hülsmann (1966–); • three fund-raising Presidents of the Foundation for Economic Education (FEE), Leonard Read (1898–1983); Forbes columnist, CIA ‘intelligence officer’ and Mormon founder of FreedomFest,

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     3

Mark Skousen (1947–); and ‘Lt. Col. Richard M. Ebeling, PhD’ (1950–), international authority on ‘free’ market business ‘ethics’ and NYU 1983–1984 ‘Post Doctoral Fellow’—seventeen years before he obtained a Ph.D.; • the founder of the Orwellian-named Institute for Humane Studies (IHS), F.A. ‘Baldy’ Harper (1905–1973); his employee, Leonard Liggio (1933–2014), who was also a ‘research professor of law at George Mason University (GMU)’ and an NYU ‘postdoctoral fellows in European Economic History’; the co-founders of the Institute of Economic Affairs (IEA), Anthony Fisher (1915–1988), Arthur Seldon (1916–2005), and Ralph Harris (1924–2006); a business sector lobbyist and Hillsdale College Professor of Economics, Arthur Shenfield (1909–1990); plus the founder of the Heritage Foundation and MPS Treasurer and President, Edwin Feulner Jr. (1941–); • six journalist-activists, Henry Hazlitt (1894–1993), Wall Street Journal, New York Times and Newsweek; John Chamberlain (1903–1995), Fortune, founding editor of The Freeman, and Wall Street Journal editorial page writer (1950–1960); John Davenport (1904–1987) Fortune and editor of Barron’s weekly; George Koether (1907–2006), Mises’ ‘friend’ and ‘longtime ambassador for Misesian economics,’2 Donald McCormick (1911–1998), aka Richard Deacon, prolific and fraudulent historian, Sunday Times Foreign Manager, and author of Approaching 1984 (1980a); and William H. Peterson (1921–2012) author of ‘Reading for Business’ Wall Street Journal column3; • two global activists, Brian Crozier (1918–2012), editor of the Economist Foreign Report; and Robert Moss (1946–), an editorial writer and special correspondent for the Economist, editor of the Economist Foreign Report and Daily Telegraph columnist; • two GMU graduates, Roy Cordato, Lundy Professor of Business Philosophy, Campbell University, and Heartland Institute ‘expert’4; and Alexander Tabarrok (1966–), who together with Ebeling and Boettke promoted the post-communist reconstruction that facilitated the rise of Putin’s ‘Russia of the Oligarchs’; plus • three official Hayek biographers, the academic fraud, ‘Dr’ Sudha Shenoy (1943–2008); Hayek’s ‘closest collaborator,’ ‘Dr’ Kurt Leube

4     R. Leeson

(1943–), Professor of Economics, California State University (CSU) East Bay/Hayward; and Bruce Caldwell (1950–), NYU ‘Post-Doctoral Fellow’ (1981–1982), and the ‘free’ market monopolist of the Hayek Archives. Although Hayek’s middle brother, Heinrich ‘von’ Hayek, was a card-carrying Nazi Doctor who benefited from the ‘free’ market in ­ freshly executed corpses (Hildebrandt 2013, 2016), he may have been able to provide some insights into the Third Reich because most of the relevant ‘knowledge’ is publically available (and denied only by the extreme Right). In contrast, much of the archival evidence about Friedrich ‘von’ Hayek is being suppressed by his disciples—presumably for fund-raising purposes (Leeson 2015a, Chapter 2). The history of Hayek’s MPS was written by Max Hartwell (1995), the MPS President (1992–1994); and four MPS members were/are official biographers: Shenoy, Leube, Caldwell and William Warren Bartley III (1934–1990).5 This Collaborative Biography is (to put it mildly) non-authorized and edited by a non-MPS member—the second authorized biographer, Hayek’s secretary (1977–1992), Charlotte Cubitt (circa1930–), was also not an MPS member. Mises (1985 [1927], 54) complained about the Soviet Union: ‘Whether or not permission is granted for a book to be published depends on the discretion of a number of uneducated and uncultivated fanatics who have been placed in charge of the arm of the government empowered to concern itself with such matters.’ In George Orwell’s (1949) Nineteen Eighty Four, ‘Ingsoc’ was Newspeak for English Socialism and the ‘Ministry of Truth’ was devoted to ‘rectifying’ historical records. Hayek (2007 [1944], Chapter 11) wrote on ‘The End of Truth’ and ‘Auslib’ is Newspeak for Austrian Liberty: Hayek, Mises, Rothbard, ‘Deacon’ McCormick, Hamowy, Raico and Shenoy were all Orwellian rectifiers. John Blundell was, successively, head of the Federation of Small Businesses’ Press, Research and Parliamentary Liaison Office (1977– 1982), President of the IHS at GMU (1988–1991), President of the Atlas Economic Research Foundation (1987–1991), President of the Charles G. Koch and Claude R. Lambe Charitable Foundations (1991–1992),

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     5

and IEA Director General (1993–2014). As IHS Director (Blundell 2014, 100, n. 6), ‘raised the [tax-exempt] $30,000 needed to send Bartley around the world’ to undertake biographical interviews. Bartley (who reportedly died of AIDS-related cancer) spoke openly about his ‘Last Tango in Vienna’ conclusion: Hayek was a ‘closet homosexual’ whose sexual ­activities with his cousin who became his second wife (but not, presumably, his first wife) resembled his own. The Bartley transcripts are being disciple-suppressed: could this be related to their contents? The MPS initially consisted of four Austrian School economists: • Hayek, Mises, Fritz Machlup, and Lionel Robbins; five Chicago School economists: • Milton Friedman, George Stigler, Aaron Director, Harry D. Gideonse and Frank Knight; fifteen other academics: • Maurice Allais, Carlo Antoni, Karl Brandt, Stanley Dennison, Walter Eucken, Erich Eyck, Frank D. Graham, Bertrand de Jouvenel, Carl Iversen, John Jewkes, Michael Polanyi, Karl Popper, William E. Rappard, Wilhelm Röpke and François Trévoux; plus seven businessmen and/or business sector lobbyists: • Herbert C. Cornuelle (FEE, Volker Fund), Harper (FEE, IHS), Albert Hunold, Henri de Lovinfosse, Leonard Read (FEE) and V. Orval Watts (FEE). After the ‘Great’ War, ‘von’ Mises (1922, 410, 435) sought more ­reliable foundations for his ascribed status than that provided by the ‘evil seed’ of Second Estate Christianity: ‘The Lord of Production is the Consumer’ (‘Der Herr der Produktion ist der Konsument ’). After promoting inter-war ‘Fascists,’ including ‘Ludendorff and Hitler,’ Mises re-embraced a variety of post-war Christians, including theocrats. The MPS courted these Christians: Unione Cristiana Impenditori

6     R. Leeson

Dirigenti (the Union of Christian Entrepreneurs),6 and, at Fisher’s suggestion, Howard Kershner (1971), the publisher of Christian Economics and a contributor to Mises’ Towards Liberty Festschrift.7 In turn, Kershner promoted Major General W.S. Beddall, the editor of Christian Economics.8 The President of the Centre Libéral Spiritualiste Français (CLSF) told Arthur Kemp (6 August 1974) that he thanked the ‘Lord’ because ‘He’ had kept the CLSF ‘afloat.’9 Dallin Oaks (7 May 1985) told Feulner that he had to resign from the MPS because he had accepted a lifetime calling on behalf of a complimentary religion, The Church of Jesus Christ of Latter Days Saints.10 This must have surprised Feulner who had been born into a family of German-American Catholics and had been an ‘instinctive conservative’ until he arrived at Regis College, a Jesuit school in Denver: ‘That’s when I came to an intellectual understanding,’ he says. A history professor, Bernard Sheehan, encouraged Feulner to read Liberty or Equality, a book by Austrian writer Erik von Kuehnelt-Leddihn. It made a big impression. ‘You have to choose between liberty and equality,’ says Feulner. ‘I picked liberty.’ After Kuehneldt-Leddihn [sic ], Feulner turned to Russell Kirk and Friedrich Hayek. He discovered National Review in Denver’s public library. Barry Goldwater’s Conscience of a Conservative, published in 1960, helped him connect principles to politics. (Miller 2013)

Which principles did Feulner connect to politics and the MPS? As the Economist (10 June 2017) noted: ‘It is harder to sell landed aristocrats to the people than it used to be.’11 Four years before the ‘Great War’ between the dynasties, The Times (‘Democracy and its Leaders,’ 30 December 1910) editorialized: ‘Democracy, in the arrogance of its newly-asserted powers, appears to believe that it can dispense with everything that in the past has made the real greatness and the enduring prosperity of nations’ (cited by Todd 2014, 13–15). According to the bogus-titled, Roman Catholic monarchist and Habsburg loyalist, Erik ‘Ritter von’ Kuehnelt-Leddihn (n.d.), during the Great War, Lieutenant Hayek and Lieutenant Mises fought to prevent the ‘world from being made safe for democracy.’12

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     7

The Habsburgs once ‘owned’ vast tracts of the Americas. The 1947 MPS meeting marked the beginning of Friedman’s ‘active involvement in the political process.’ Describing himself as a ‘young, naïve, provincial American,’ he took six weeks off from the University of Chicago for what Stigler described as a ‘junket’ to ‘save liberalism.’ Shortly before Hayek was born, Friedman’s parents left the Habsburg’s European Empire for the trans-Atlantic trip to Ellis Island: ‘immigrants were strictly on their own except for the assistance they could get from relatives and private charitable agencies’—his mother worked as a ‘seamstress’ in a ‘sweatshop.’ Half-a-century later, travelling in reverse across the Atlantic on Cunard’s Queen Elisabeth, Friedman and Stigler stayed at the ‘plush’ Dorchester and Grand Hotels: this ‘expenses-paid’ trip was ‘George’s and my first trip abroad’ (Friedman and Friedman 1998, 19, 20, 159). Afterwards, all became ‘devotees of a free society’ (Peterson 1996; Chapter 9, below). At The Wall Street Journal, the promotion of the ‘free’ society requires slavish deification: I look back, with special pleasure and reverence, at those verdant springs and golden summers when that giant of our age, Ludwig von Mises (1881-1973), walked and talked in our midst, when he shone in our lives and minds, when he gently schooled us on the meaning of praxeology and the pain of interventionism. Today we remember Lu Mises, we honor his name, we celebrate his birth, we glory in his truth, we marvel at his lonely and courageous struggle against heavy odds. The question remains, however, will the world remember? And in that question, I have, if you will, a charge for you, his successors here on this earth. (Peterson 1982)

According to Ebeling (2010): ‘If the advice of economists like Hayek and his London School of Economics colleagues of that time had been followed, the Great Depression could have been far less severe, and much shorter in duration.’ Keynes (1936, 383) famously wrote that Practical men, who believe themselves to be quite exempt from any intellectual influences, are usually the slaves of some defunct economist. Madmen in authori-ty, who hear voices in the air, are distilling their frenzy from some academic scribbler of a few years back.

8     R. Leeson

Having claimed that Keynes (1936) was ‘Pandering to Special Interests,’ Ebeling (2006, 2010) misquoted this passage first for a FEE audience, and then for ‘Think Market’: I fear that Dr. [Paul] Krugman is one of those ‘practical men of affairs’ who is the slave of a defunct economist named John Maynard Keynes. He is hearing Keynes’ voice in the air, and is distilling his frenzy from an academic Cambridge scribbler from a few decades past.

Austrian-promoted deflation deepened the Great Depression and ­facilitated Hitler’s rise to power; the MPS-promoted privatisation created an equivalent trauma which facilitated the rise of ‘Russia of the Oligarchs’; and MPS-promoted deregulation co-created the Global Financial Crisis. Friedman (2002) reflected: We have learned about the importance of private property and the rule of law as a basis for economic freedom. Just after the Berlin Wall fell and the Soviet Union collapsed, I used to be asked a lot: ‘What do these ex-communist states have to do in order to become market economies?’ And I used to say: ‘You can describe that in three words: privatize, privatize, privatize.’ But, I was wrong. That wasn’t enough. The example of Russia shows that. Russia privatized but in a way that created private monopolies-private centralized economic controls that replaced government’s centralized controls. It turns out that the rule of law is probably more basic than privatization. Privatization is meaningless if you don’t have the rule of law. What does it mean to privatize if you do not have security of property, if you can’t use your property as you want to?13

Friedman’s willingness to acknowledge error—here and elsewhere— is evidence that he should be located at the scientific end of the ­‘knowledge’-to-faith spectrum. When asked about a question put to Friedman: ‘did politics drive your economic thinking or the other way around, did your economic or scientific understanding of how the world works shape your politics?’ And [Friedman] said ‘Absolutely, the latter.’

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     9

Arnold Harberger (2016) replied: ‘Absolutely right.’ In contrast, Hayek (1999 [1977], 132) described the purpose of Austrian ‘theory’: ‘I have often had occasion to explain, but may never have stated in writing that I strongly believe that the chief task of the economic theorist or political philosopher should be to operate on public opinion to make politically possible what today may be politically impossible.’ In ‘Hayek and Coase Travel East: Privatization and the Experience of Post-Socialist Economic Transformation,’ Kiryl Haiduk (2015) examined the influence of ‘free’ market promoters. A literal interpretation of ‘The Coase Theorem’ plagued post-communist reconstruction—the 1991 Nobel Prize for Economic Science deified Ronald Coase’s insights. As Cordato (1992) put it: ‘Austrians economists should be rejoicing over Coase’s Nobel Prize. Coase’s approach to externalities opened the door for Austrian ideas.’ The structure of Austrian ‘knowledge’ appears to consist of: • a false axiom: ‘Austrians have always argued that property rights must be taken as given’ (Cordato 1992); • legitimization from ‘God’: ‘There was a respect for property rights in the early Church. How can one understand the commandment against theft unless you understand the place of property rights? At the same time, I believe that God is the ultimate owner, and our freedom to use our property is a derivative right. Yet even here, to say that the uses of property can be managed by institutions does not mean that the state must be the manager’ (Terrell 2003); plus two evidence-free assertions: • negative externalities don’t exist (or can be downplayed): for Austrians, the ‘entire concept of “social costs” is vacuous’ (Cordato 1992); and • positive externalities exist: Coase created a ‘significant positive ­externality’ for Austrians (Cordato 1992). From the outset of the MPS, there were tensions between the atheist/ agnostic Chicago School (who respect evidence) and the religiosity of the business sector lobbyists (backed by atheists, Hayek and Mises) who

10     R. Leeson

promote ‘Truth.’ Friedman and Stigler formed a low opinion of the integrity of those dishonest ‘bastards,’ Watts and Read: ‘for some years we refused to have anything to do with the foundation [FEE] or with Leonard Read’ (Friedman and Friedman 1998, 151; Hammond and Hammond 2006, 33). On one side of the MPS: Rockwell edited the medical-and-drug industry’s Private Practice; and, directed at the other: the American Medical Association and a representative of the pharmaceutical industry tried to prevent Milton Friedman’s Ph.D. being published—he had calculated that doctors were being overcompensated as a result of their trade union power (Friedman and Friedman 1998, 72–76). Friedman (2 October 1984) also complained to the journalist-editor of the Mont Pelerin Society Newsletter about their account of his presentation to the Vancouver MPS meeting which reported that he favoured a return to the gold standard. Somewhat diplomatically, Friedman reported that this was ‘erroneous.’14 The long-suppressed archival evidence reveals that Hayek was truthful only for self-promotional purposes. According to the MPS Statement of Aims: ‘The group does not aspire to conduct propaganda. Its object is solely, by facilitating the exchange of views among minds inspired by certain ideals and broad conceptions held in common, to contribute to the preservation and improvement of the free society.’15 For public consumption, Hayek (1992a [1968], 259, 262) declared: Read is a ‘profound and original thinker’ who could be relied upon ‘not only to spread the gospel’ but also ‘to contribute to the development of ideas.’ What FEE, ‘with Leonard Read at its head, and all of his co-fighters and friends are committed to is nothing more nor less than the defence of civilization against intellectual error [Hayek’s emphasis] … I mean it literally. Hayek (28 August 1975), who told Cubitt (2006, 144) that Fisher was not ‘intellectually gifted,’ was obliged to make a ‘confidential’ reply to Seldon apologising for having apparently stated that he regarded the IEA as a ‘mere popularizing propaganda’ institution: the IEA was, he assured Seldon, superior to FEE’s ‘propaganda’ efforts.16 Hayek (1 January 1980) also assured Fisher that the future of civilization depended on him obtaining ‘large’ sums of money.17

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In The Constitution of Liberty, Hayek (2011 [1960], 186) described his weltanschauung: ‘To do the bidding of others is for the employed the condition of achieving his purpose.’ In The Liberal Imagination, Lionel Trilling (2008 [1950], 296) unintentionally described Hayek’s agenda: ‘Ideology is not the product of thought; it is the habit or the ritual of showing respect for certain formulas to which, for various reasons having to do with emotional safety, we have very strong ties and of whose meaning and consequences in actuality we have no clear understanding.’ In ‘Why We Are Winning,’ Joseph Salerno (1996) described the result: ‘Today the [Austrian] school is so large and international that it is difficult to keep tabs on it. It has displaced the waning [emphasis added] Chicago School in terms of representing the free-market plumbline. That’s more than progress. That’s a revolution.’ The first instalment of Caldwell’s (2004) ‘definitive’ nuanced hagiography is subtitled An Intellectual Biography of F.A. Hayek; and according to Matt Kibbe (a GMU ‘Tea Party’ employee of the Koch brothers), the MPS is an ‘economic powerhouse among the intelligentsia’ (Chapter 6, below). But Hayek (1978) was contemptuous of intellectuals: ‘Of course, scientists are pretty bad, but they’re not as bad as what I call the intellectual, a certain dealer in ideas, you know. They are really the worst part.’18 Hayek’s (1949) ‘The Intellectuals and Socialism’ was regarded by Richard Cornuelle as ‘like the Holy Bible’ (cited by Doherty 2007). Hayek regarded socialism as ‘just another religion’ (Cubitt 2006, 60); and to recruit the intellectuals that he was contemptuous of, Hayek (1949, 432–433) offered a ‘new liberal program which appeals to the imagination. We must make the building of a free society once more an intellectual adventure, a deed of courage. What we lack is a liberal Utopia.’ The ‘main lesson which the true liberal must learn from the success of the socialists is that it was their courage to be Utopian which gained them the support of the intellectuals and therefore an influence on public opinion which is daily making possible what only recently seemed utterly remote.’19 And Donald Trump’s (1987, Chapter 2) The Art of the Deal explained that he played ‘to people’s fantasies. People may not always think big by themselves, but they can still get excited by those who do. That’s why a little hyperbole never hurts. People want

12     R. Leeson

to believe that something is the biggest and the greatest and the most spectacular. I call it truthful hyperbole. It’s an innocent form of exaggeration—and a very effective form of promotion.’ As Rothbard (2010 [1958], 390) explained, the Redemption of ‘free’ market Truth derives from ‘Romantic fiction’: since Atlas Shrugged is ‘our day’s most striking example of important romantic fiction, we may say that’: Ayn Rand’s explicit moral, political, and economic philosophy redeems the tired businessman from the weight of guilt he has long suffered for his productiveness and profit seeking. (Chapter 5, below)

Science is doubt-based; religion is faith-based; and war can add ­meaning to an otherwise empty life. In the righteous war for the ‘free’ market, Hayek and Mises initiated a ‘spiraling purity movement.’ Rothbard (1994) described the Austrian School ‘outreach’ to ‘redneck’ militia groups; and Block (2000, 40) describes the resulting ‘free’ ­market ‘united front’ with ‘Neo-Nazis’: I once ran into some Neo-Nazis at a libertarian conference. Don’t ask, they must have sneaked in under our supposedly united front umbrella. I was in a grandiose mood, thinking that I could convert anyone to libertarianism, and said to them, ‘Look, we libertarians will give you a better deal than the liberals. We’ll let you goosestep. You can exhibit the swastika on your own property. We’ll let you march any way you wish on your own property. We’ll let you sing Nazi songs. Any Jews that you get on a voluntary basis to go to a concentration camp, fine.’

Block continued: The problem with Nazism is not its ends, from the libertarian point of view, rather it is with their means. Namely, they engaged in coercion. But, the ends are as just as any others; namely, they do not involve invasions. If you like saluting and swastikas, and racist theories, that too is part and parcel of liberty. Freedom includes the right to salute the Nazi flag, and to embrace doctrines that are personally obnoxious to me. Under the libertarian code, you should not be put in jail for doing that

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     13

no matter how horrendous this may appear to some. I happen to be Jewish, and my grandmother is probably spinning in her grave as I write this because we lost many relatives in the Nazi concentration camps.

Through fraudulent recommendations, Hayek (1978) created a Welfare State for his academically unqualified disciples: ‘That I cannot reach the public I am fully aware. I need these intermediaries.’20 According to Hayek, ‘Dr.’ Leube had failed to pass his undergraduate units in economics at the University of Salzburg and thus has no post-secondary qualifications—only ‘Mickey Mouse’ degrees. Although he may not be a member of the Second Estate (he claims to be descended from a fourteenth century Habsburg Count), German is Leube’s first language (Bartley and Cubitt were also proficient in German). Hayek allowed Shenoy to become his official biographer ‘on one condition, and one condition only: namely, you must first become fluent in German.’ But although Shenoy could learn ‘Austrian,’ she ‘never even learned to count from eins to zehn ’ (Blundell 2014, 100). After decades of devotion, Caldwell has, reportedly, abandoned his efforts to learn German and recruited a co-author. In 1947, Walt Disney—after ‘naming names’ and explaining about his ‘propaganda films’—told the House Un-American Activities Committee that the Communist Party was ‘an un-American thing. The thing that I resent the most is that they are able to get into these unions, take them over, and represent to the world that a group of people that are in my plant, that I know are good, 100% Americans, are trapped by this group, and they are represented to the world as supporting all of those ideologies, and it is not so, and I feel that they really ought to be smoked out and shown up for what they are, so that all of the good, free causes in this country, all the liberalisms that really are American, can go out without the taint of communism.’21 Austrians seek to reinvent Mises’ (Mises 1985 [1927]) promotion of political ‘Fascism’ (in Liberalism in the Classical Tradition ) as ‘really American.’ In 1950, within weeks of arriving at the University of Chicago, Hayek began targeting academics for liquidation—Lawrence Klein, the coordinator of Jimmy Carter’s 1976 economic task force and recipient of the 1980 Nobel Prize for Economic Sciences, was one of these ‘free’

14     R. Leeson

market victims (Chapter 5, below). The University of Chicago Press publishes both Caldwell’s (2004) Hayek’s Challenge and The Collected Works of F. A. Hayek (1994–). The racist and anti-Semitic Hayek told Cubitt (2006, 5) that he and his fellow Europeans émigrés sat in the ‘sardonic corner’ of the London School of Economics (LSE) Common Room making ‘malicious’ comments about the competence of their English colleagues—one of whom detected in The Road to Serfdom (1944) a ‘thoroughly Hitlerian contempt for the democratic man’ (Finer 1945, 210); which Hayek (for posthumous consumption) apparently agreed was a largely accurate depiction (Leeson 2015a, Chapter 3). In 1944, as Hayek was planning the MPS, Disney became vice president (and co-founder) of the Motion Picture Alliance for the Preservation of American Ideals (MPA) which proclaimed that we ‘believe in, and like, the American Way of Life … we find ourselves in sharp revolt against a rising tide of Communism, Fascism and kindred beliefs, that seek by subversive means to undermine and change this way of life.’ Ayn Rand was the ‘primary intellectual spokesperson for the MPA.’ Films supporting ‘Americanism,’ Rand insisted, ‘don’t glorify’ the ‘common man’ (Watts 1997, 240–241). In ‘Television and the Public Interest,’ President John F. Kennedy’s Federal Communications Commissioner, Newton Minow (1961), described American commercial television programming as a ‘vast wasteland … a procession of game shows, formula comedies about totally unbelievable families, blood and thunder, mayhem, violence, sadism, murder, western bad men, western good men, private eyes, gangsters, more violence, and cartoons. And endlessly commercials—many screaming, cajoling and offending.’ In an attack on the ‘free’ market, Minow stated that ‘Television and all who participate in it are jointly accountable to the American public for respect for the special needs of children, for community responsibility, for the advancement of education and culture, for the acceptability of the program materials chosen, for decency and decorum in production, and for propriety in advertising.’ Fantasy, fiction and fraud all require the suspension of disbelief. The stages of ideological awareness for ‘free’ market economists include all three:

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     15

• Disney (pre-adolescence); • Rand (early adolescence); • Hayek, Mises and Rothbard (late adolescence). With respect to fraud: in the year of Orwell’s (1949) dystopia, Hayek (23 September 1984) wrote to Deacon McCormick: ‘Having long been intrigued by the to me at first unbelievable stories that the late Professor A.C. Pigou was a Russian spy and having at last succeeded in obtaining a copy of your book The British Connection, I am at last more or less persuaded that you must be right. I not only knew Pigou probably better than any other person still living and not only had been staying with him in College, sharing lectures with him (while I was with the LSE evacuated to Cambridge during the war) played chess with him and even climbed with him in the Lake district, but as I now realize, was subject by him to exactly the tests which you described … Also, characteristically, he dropped me as suddenly when he discovered that my political views made me wholly unsuitable for the purpose he had evidently in mind.’ Hayek suggested lunch: ‘I am to be at the Palace to receive a decoration on October 25, and if you could possibly see me, perhaps at my club, the Reform, either then or on the preceding or the following day, I should be very grateful.’ Hayek added a handwritten ‘ps. What I have in mind is an article on Suppression of Information for Encounter, using Pigou as an illustration because I know the case well.’ In reply, ‘Deacon’ McCormick (28 September 1984) explained why he was ‘delighted’ to receive the letter: ‘though not an e­ conomist, I am not only a fervent admirer of what you preach, but probably in my enthusiasm for your code and rules that I almost go beyond it.’ ‘Deacon’ McCormick—who had an imaginary informant, ‘Roger’ (West 2015)—informed Hayek that I cannot disclose the identity of my informant ‘ROGER’ as yet, mainly because he could be at risk from the KGB.

‘Deacon’ McCormick was more forthcoming with other evidence: ‘I can let you have photocopies of the Pigou diaries in code.’ Lunch at the Reform Club would be ‘splendid.’

16     R. Leeson

Hayek’s diary (Armistice Day 1984) records a visit from Bartley.22 Bartley asked ‘This man Deacon (or I can’t remember his name offhand) do you think he would see me some time to talk about these things?’ Hayek replied that ‘Deacon’ McCormick was a ‘very nice man. He would probably welcome it. He’s retired now, I think. He was very willing to talk and a very pleasant conversationalist.’ Bartley asked: ‘So he seemed quite genuine; he wasn’t making these things up?’ to which Hayek replied: ‘Oh, I’ve no question about that.’ Hayek immediately contradicted himself: ‘He may be sometime [sic] making things up. I suppose his exactitude is not that of a scholar, but of a journalist. But entirely honourable’ (Leeson 2013, Chapter 9). According to its Statement of Aims, the MPS sought methods of ‘re-establishing the rule of law.’23 Hayek on Hayek (1994, 137, 107) repeats ‘Deacon’ McCormick’s fraud: the scholar who developed externality analysis was a communist spy; and You are only prohibited from calling yourself ‘von’ in Austria … I was a law-abiding citizen and completely stopped using the title ‘von.’

Whenever he thought he could get away with it, Hayek attached the illegal ‘von’ to his name (Leeson 2015a, Chapter 1). After CSU Hayward/East Bay abruptly discharged him from their payroll (after discovering—somewhat belatedly—that he didn’t possess any of the post-secondary qualifications that he and Hayek claimed he had), ‘Dr.’ Leube ‘D.L.E.’ requested funding from the MPS on (stolen?) University of Salzburg notepaper headed ‘PROF. F.A. von HAYEK.’24 Hayek told Cubitt (2006, 10, 122) that all his professional considerations had been based on financial considerations’; and Hayek on Hayek (1994, 85, 95) reveals a ‘richly layered’ and ‘well-developed character.’ Hayek spread the rumour that the LSE Director who had appointed him, William Beveridge, suffered from erectile dysfunction: ‘I don’t keep my mouth shut; my stories about [LSE colleague Harold] Laski and Beveridge can be rather malicious.’ But for Caldwell (2004, 147), ‘Hayek’ is a cartoon fantasy—a Randian hero, who ‘made a point of keeping his disagreements with others on a professional level.’ Who is more believable: Hayek on Hayek or Caldwell on Hayek?

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     17

There appear to be three alternatives: Caldwell • has made (innumerable) honest mistakes; or • possesses only delusional knowledge; or • is a fraud who (like his hero, Hayek) became a multi-millionaire by systematically fabricating ‘knowledge.’ Caldwell certainly appears to flip between the three stages of ideological awareness—tearing up like Disney’s orphaned Bambi when hearing that the long-suppressed evidence about his hero would be presented in Hayek: A Collaborative Biography. And in an hysterical outburst, Caldwell (Society for the History of Economics, SHOE 31 May 2014) declared an emergency: it was ‘outrageous’ that the editor of the Archival Insights into the Evolution of Economics series had been working ‘in the archives regularly, indeed constantly every summer’ and had reported that items were missing: ‘I have heard of no black market for Hayek’s things, thriving or otherwise.’ Caldwell then contradicted himself by describing a small part of this black market: ‘Hayek’s notes on a meeting with Herbert Hoover and a set of lecture notes are 2 things that were reported for sale a number of years ago.’25 Four batches of ‘incremental material’ were added to the Hayek Archives—it is ‘common knowledge’ that other parts of Hayek’s archives were sold on the ‘free’ market. Which History of Economics Society (HES) Past President now possesses the Hitler postcards through which the Hayek family communicated? Referring to a missing letter from Hayek to Prime Minister Margaret Thatcher, Caldwell and Leonidas Montes (2014a, 41; 2014b; 2015, 296) state: ‘Of course, we have no evidence of what may have been said.’ Yet anyone familiar with the Hayek-related Archives knows that Shenoy (30 August 1990) swore an affidavit about the (non-archival) location of ‘many letters, e.g. to and from Thatcher.’ Presumably to discredit the person—who had accused her of looting Hayek’s family heirlooms—Shenoy added that the possessor of these ‘two drawersful’ of archives had a ‘lesbian’ partner (who ‘played her own and other women’s compositions’) and was motivated by the sentiment: ‘why should men have everything … But why should men have everything?’26

18     R. Leeson

Hayek (1978) had a sophisticated criminal mind and was contemptuous of those who provided him with ‘unmeasured praise’ on the basis of Disney-style versions—the General Motors Road to Serfdom in Cartoons27; and the Reader’s Digest summary.28 In America, Hayek observed ‘people who were enthusiastic about the book but never read it–they just heard there was a book which supported capitalism.’29 The Magic Kingdom: Walt Disney and the American Way of Life (Watts 1997) describes the Cold War ideology behind the ‘land’ that Disney had ‘always dreamed of, a great, great playground for the children and the families of America.’30 Vienna is the ‘City of Dreams’ (Leonard 2011) where ‘Count’ Leube owns six and sometimes eight castles; and editing Hayek is a ‘dream assignment’ for Caldwell (2004, x) who, when the Definitive version of Road to Serfdom entered Glenn Beck’s Disneyland, may have made a million dollars in royalties in a single month (Leeson 2015b). Many of the contributors to I Chose Liberty (Block 2010) report that Rand’s plodding and malevolent fiction set them off on the road to the ‘free’ market. Salerno’s (1996) ‘ideological awareness first came when I was in fifth grade.’ In 1963, he ‘read an article by Barry Goldwater in Life Magazine–he favoured the free market in those days–and I was deeply impressed. One thing led to another, I went through the inevitable [emphasis added] Rand phase, and by my senior year at Boston College, I was fairly well read in Mises, Hayek and Rothbard. In graduate school at Rutgers, I met Murray.’ Salerno described the recruitment process: ‘it is the very radicalism of the school that attracts today’s best students … What drives them? It’s the sense that something is gravely wrong in the world, and that Austrian economics offers answers for doing something about it. They want to be involved. The mainstream does not inspire this kind of attitude. That is one reason we stand a good chance of winning this battle for true economic science and the future of liberty generally.’ As a middle-aged NYU Professor, Boettke (2012) was still a self-described ‘cheerleader.’ Hans-Hermann Hoppe (2017) was thir­ ty-five years old, ‘already an adult when I first met Murray, not just in the biological but also in the mental and intellectual sense, and yet, I only came of age while associated with him.’ Boettke, who figures in Heroes of Film, Comics and American Culture: Essays on Real and

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     19

Fictional Defenders of Home (DeTora 2009), flips between the three stages of ‘free’ market awareness—describing himself as a sucker for ‘Buffy the Vampire Slayer.’ (cited by Driver 2007)

Referring to the ‘mere trash’ read by those who ‘lack discrimination,’ ‘von’ Mises (2008a [1956], 51–52) asserted: ‘The tycoon of the book market is the author of fiction for the masses.’ At GMU, Boettke (2005, 452) ‘frequently’ uses fiction as a ‘teaching tool’: Rand ‘attempted to provide economic enlightenment to her readers through the story of Atlas Shrugged.’ But as a New York Times review of Rand’s Ideal (2015 [1934]) points out, her scripts celebrate ‘defiance and narcissism’— which ‘appeals to adolescents and radical free marketers.’ Her main character, Kay Gonda, is one of Rand’s Nietzschean protagonists who thinks that she towers above all the losers and ‘second-handers’ who ­populate the world. (Kakutani 2015)

President Harry Truman (1945–1953) is attributed (possibly apocryphally) with the request: Give me a one-handed Economist. All my economists say ‘on hand …’, then ‘but on the other …’

When the Divine Right of Kings dominated government, secular office was the ‘shortest road to boundless wealth’ (Macaulay 2009 [1848], 21). Under the incentive system of one branch of the Abrahamic religion, thieves have a hand amputated; while under another (also theocratic) branch, the rewards offered to ‘one-handed’ economists far exceeds that offered to those with two hands. Most historians of thought have genuine academic qualifications (that is, examined by scholars who may not share their ideological prejudices). Boettke (2014) describes them as ‘not necessarily high ­ opportunity cost scholars.’ ‘To be honest,’ their debates usually involve low opportunity cost ‘scholars.’

20     R. Leeson

The phrase ‘opportunity cost’ is conventionally attributed to Wieser (1927 [1914]). Using conventional metrics (refereed publications in ‘respectable’ journals) almost all Austrian ‘academics’ are academically unemployable. What is the ‘next best alternative’ for an aspirational ‘Professor’ who is deemed by the market to be a failure? The pay-off for embracing the ‘free’ market includes: • at a public university, a tax-funded middle- or upper-middle-class academic salary; • a ‘named’ Professorship adds significantly to the taxpayers’ contribution; • ‘think’ tank Fellows and Senior Fellows can also receive $225,000 per annum; • editors of Definitive or Scholar’s versions usually receive $200,000 per annum in ‘expenses’; • selling ‘get-rich-quick’ schemes to the financially illiterate creates ‘independent’ wealth; and • as Hayek’s (1978) ‘secondhand dealers in opinion,’ another $250,000 per annum can be generated by writing regular soapbox (opinion) pieces on fund-raising ‘free’ market websites.31 Hayek (1978) recruited journalists as fellow travellers: ‘It has long been a puzzle to me why what one commonly calls the intellectuals, by which I don’t mean the original thinkers but what I once called the ­secondhand dealers in ideas, were so overwhelmingly on the Left. That [phenomenon], provides sufficient explanation of why a whole generation influenced by this has grown up. And I have long been convinced that unless we convince this class which makes public opinion, there’s no hope. But it does seem now that it’s beginning to operate. There is now a reaction taking place in that very same class. While even ten years ago there was hardly a respectable journal–either newspaper or periodical–to be found that was not more or less on the Left, that is changing now. And I seriously believe that this sort of thing in twenty or thirty years may have changed public opinion. The question is whether we have so much time.’32 Hayek (May 1977) was blunt: for a Nobel Laureate, journalists

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     21

become an absolute plague. Not only are they a plague, but they are dangerous. Because they insist that you are an expert and are indignant when you refuse to answer questions. When I tell a journalist nowadays, ‘I don’t know’ – he doesn’t believe me!33

Hayek (1978) noted the ‘corrupting’ influences that journalists were exposed to: ‘it’s a necessity to pretend to be competent on every subject, some of which they really do not understand. They are under that necessity, I regret; I’m sorry for them. But to pretend to understand all the things you write about, and habitually to write about things you do not understand, is a very corrupting thing.’34 At the 1974 Koch-funded Austrian revival, ‘We were all converts already. It was more a forming of a clan’ (Blundell 2014, 102). Hayek (1978) told James Buchanan—the ‘George Mason Nobel Laureate’— that economic ‘science’ was driven by shallow emotions: ‘There’s no emotional disappointment in the other fields when you recognize that you can’t find out certain things; but so many hopes are tied up with the possible control and command over economic affairs that if a scientific study comes to the conclusion that it just can’t be done, people won’t accept it [emphasis added] for emotional reasons.’35 According to Hayek (1978), journalists, and journalists-masqueradingas-academics, were shallow: ‘I don’t think there could ever be any communication between Mr. [John Kenneth] Galbraith and myself. I don’t know why, but it’s a way of thinking which I think is wholly irresponsible and which he thinks is the supreme height of intellectual effort. I think it’s extremely shallow. I go so far as that when in this recent [Paris Challenge to Socialists] plan, which had to be postponed, of challenging an opposite group of socialist intellectuals, he was one of three whom I would exclude. I won’t use the exact phrase, which would be libellous and which I don’t want to be recorded, but he and two others I on principle excuse because they think in a way with which I could not communicate … I don’t want to be offensive, but it’s a certain attribute which is common to journalists of judging opinions by their likely appeal to the public.’ When asked if Galbraith was ‘more of a journalistic type,’ Hayek replied: ‘Yes, very much so.’36 Seven journalists with academic aspirations were recruited as MPS foundation members:

22     R. Leeson

• Davenport, Hazlitt, Hans Barth (philosopher), Trygve Hoff (Famand ), Felix M. Morley (Washington Post and Washington editor of Barron’s Weekly ), Herbert Tingsten (political scientist) and Veronica Wedgwood (Time and Tide, historian). Subsequently, successful approaches were made to Gerald Skibbins (Opinion Research Corporation),37 William Grimes (Wall Street Journal managing editor, 1934–1941, and editor, 1941–1958),38 Vermont Royster (1958–1971), Robert Bartley (1972–2002), David Fund and Gordon Crovitz (Wall Street Journal editorial page editors),39 David Brooks (Wall Street Journal editorial page deputy editor),40 Mary O’Grady (Wall Street Journal editorial board), Robert Pollock (Wall Street Journal editorial page writer),41 Wilfred May (Commercial and Financial Chronicle ),42 Alistair Burnett (editor, the Economist ), William Rees-Mogg (editor, The Times ),43 Edwin McDowell (New York Times ),44 ), Alice Widener (USA Magazine  ),45 Colin Welsh (Daily Telegraph  46 Malcolm Forbes (Forbes Magazine ), Jon Basil Utley (associate editor, Times of the Americas ),47 and Jürgen Eick (co-editor, Frankfurter Allgemeine Zeitung, 1963–1986).48 Welsh was ‘elected’ in 1971 and expelled in 1990 after four years of non-payment of dues.49 Eick—whose father had been dismissed from his high school teaching position by the Nazis—was an MPS member from 1968 until his death in 1990.50 But Hayek was incensed by a less-than-flattering account of General Augusto Pinochet’s dictatorship that appeared in Frankfurter Allgemeine Zeitung (Farrant and McPhail 2017). ‘Ms Buchanan of The Wall Street Journal ’ asked to attend the 1984 Paris MPS meeting.51 From the University of Sydney, Shenoy nominated Peter Samuel (Economics Correspondent of the Australian Bulletin )—the notorious ‘Mr. Y’ who (briefed by Malcolm Fraser) had conspired to have Liberal Party Prime Minister John Gorton (1968–1971) replaced by William McMahon. According to Stephen Holt (2008), Sir Frank Packer’s ‘tightly marshalled’ media empire was behind the coup. Four years later, another coup ousted Gough Whitlam (Labour Prime Minister, 1972–1975) in favour of Fraser. Shenoy (30 July 1980) told Feulner that she was rather ‘anxious’ that Samuel

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     23

be recruited because he was on the side of the ‘angels’ and is ‘very good indeed (from the MPS viewpoint, of course!).’52 Mises (1985 [1927], 51) emphasized that without him as their intellectual Führer, ‘Fascism’ would remain ‘an emergency makeshift’ (Chapter 2, below). In Christian Economics—devoted to ‘less ­government, the free market and the faithful application of Christian principles to all economic activities’—Mises (1961) correctly noted that some American ‘liberals’ sought to ‘do away with unemployment through inflation’: before falsely stating that ‘Lord Keynes’ did not ‘invent this makeshift but merely popularized it’ (see Leeson 1997a, b, c, 1998, 1999). As Arthur Burns—an anti-Keynesian early MPS member and 1970–1978 Chair of Richard Nixon’s Federal Reserve—stoked the Great Inflation, an academic fraud edited Hayek’s (1972) Tiger by the Tail The Keynesian Legacy of Inflation: I was at the IEA, and I was pestering people about all the great anti-Keynesian ideas in Hayek’s work, and how it ought to be brought into print. They agreed. It came out at the right time. We were in the midst of stagflation, and it was just before Hayek’s Nobel Prize. I was surprised by the reception, but Arthur Seldon was not. For months after, we had ‘tigers’ running through the financial press. [John Maynard] Keynes’s unassailability died between the first and second editions, and I realized while preparing the second edition that I could now say anything I wanted [emphasis added]. The first had to be very cautious because Keynes was still very much alive. (Shenoy 2003)

The MPS ‘free’ market-industrial complex has exerted a profound influence over ‘knowledge’ construction and dissemination. Burnett (later Sir Alistair) was sub-editor and then editor (1965–1974) of the Economist as Crozier (1954–1964) edited the Economist Foreign Report (1954–1964) and Moss was special correspondent (1970–1980) and editor of the Economist Foreign Report (1974–1980). In ‘News From Mont Pelerin,’ Utley (2000) provided ideological assertions rather than a journalistic account: ‘The consensus of nearly all participants was that all the world could become prosperous and at peace, if nations just had

24     R. Leeson

the political structure and will to adopt the ideas of Mises and Hayek, the great economists of the post-socialist era.’ How do journalists respond to incentives? In Frankfurter Allgemeine Zeitung, Dr. Karen Horn (3 April 1997) ‘reported’ that the MPS had ‘long since become an abbreviation for scholarly commitment to Liberalism, for faith in the market and in competition. The small mountain at Lake Geneva is today a symbol of freedom.’ She also thanked Feulner for his assistance in helping her write this article about the MPS53; in reply, Feulner (14 April 1997) thanked her for a ‘very fair’ treatment of the MPS54; and had her piece translated and circulated.55 For the 40th anniversary of Buckley’s National Review, Feulner (1995) commentated on a change that later propelled Trump into the White House: One encouraging note: Conservatives can side-step or end-run the traditional media if need be. We have our own magazines and journals; in the United States talk radio has emerged as a major combatant in the war of idea.

John B. Oakes, who took New York Times editorials (1961–1976) to the left, accused Robert Bartley of having ‘hallucinatory ideas of the facts.’ According to Robert Novak (2003), without Bartley (the ‘quintessential cold warrior’) and the Wall Street Journal, ‘supply-side economics would have been stillborn.’ Hayek (1978) told his disciples, that in the Wall Street Journal ‘you get all the facts very clearly put, and it has no effect.’56 To illustrate this, Hayek provided an egotistical falsehood: I hope that on Monday there will be a letter from me in the Wall Street Journal, which just suggests that I hope they would put in every issue in headline letters the simple truth: ‘Inflation is made by government and its agents. Nobody else can do anything about it.’57

In ‘Paris Climate of Conformity: it pays to be skeptical of politicians who claim to be saving the planet,’ The Wall Street Journal (13 December 2015) editorialized: ‘If climate change really does imperil the Earth, and we doubt it does, nothing coming out of a gaggle of governments and

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     25

the United Nations will save it.’58 What’s sauce for the goose is sauce for the gander. What comes out of a ‘gaggle’ of ‘opinion’ salesmen in the pay of Rupert Murdoch—whose publishing business model combines two forms of pornography: page one ‘outrage’ plus page three nudity (with mini-skirts for Fox News anchors)? Is it surprising that Murdoch’s Fox New has been plagued by accusations of sexual harassment leading to multi-million dollar settlements and the departure of its head, Roger Ailes and lead-opinion maker, Bill O’Reilly? In the ‘free’ market, the underclass ‘perish as they should’ (Chapter 4, below). And then, their cellphones are hacked by a ‘gaggle’ of Murdoch journalists: having lived by the outrage, The News of the World (1969–2011) lied-and-died by the outrage. Like Disney’s fantasy, Murdoch’s pornographic ‘outrage’ serves a political agenda. According to the salacious News of the World and other Murdoch papers, the leader of the British Labour party, Michael Foot (codename ‘Boot’) met his KGB handlers at the Gay Hussar, a Soho restaurant—a libel which resulted in substantial damages being paid. Foot’s lawyer said that Times Newspapers’ ‘unsuccessful attempt to prevent Mr. Murdoch from appearing in court had prompted the company’s decision to reach a settlement.’ Foot added that if Murdoch ‘owns newspapers which can make accusations of this nature, he should appear in court when they are raised’ (Williams 1995). Which ‘free’ market economists (‘free-cons’) or promoters are not in the pay of Murdoch, the Koch brothers (Charles and/or David), the tobacco industry and/or other MPS donors? Should public policy be left to funded lobbyists whose puppet-masters seek to avoid full-cost pricing by using the environment as an open sewer? According to The Atlantic, there has been a ‘shift’ at the ‘highest l­evels’ as the Wall Street Journal owner, ‘Rupert Murdoch went from Trump skeptic to ally over the course of the [2016] election.’ Paul Gigot, the Journal editor, ‘fired’ the op-ed page editor, Mark Lasswell: ‘According to a source close to Lasswell, the relationship between Lasswell and Gigot broke down in June [2016] when Gigot blocked Lasswell from ­publishing op-eds critical of Trump’s business practices and which raised questions about his alleged ties to Mafia figures’ (Gray 2017). On Fox News, Gigot (21 October 2017) stated:

26     R. Leeson

obviously, if we knew that a Russian ad – was buying a full-page ad in the ‘Wall Street Journal,’ for example, attacking a candidate, we wouldn’t take the money.59

But The Wall Street Journal editorial page appears to have been almost monopolized by those who have been ‘taking the money.’ The Partnership for Responsible Growth analyzed two decades of Journal opinion pages on climate change and discovered a ‘consistent pattern that overwhelmingly ignores the science, champions doubt and denial of both the science and effectiveness of action, and leaves readers misinformed about the consensus of science and of the risks of the threat.’ Of the 279 op-eds published between 1995 and 2016, only 14% reflected mainstream climate science. And the Journal predominantly features writing by ‘outside voices who argue against the validity of climate science or policies to reduce emissions. Authors’ vested interests in fossil fuels are disclosed inconsistently.’60 The Wall Street Journal also consistently declines to report that Mises was a c­ard-carrying Austro-Fascist (and member of the official Fascist social club) and Hayek was awarded a Nobel Prize for Economic Sciences on the back of a fraudulent assertion that he had predicted the Great Depression (Klausinger 2012, 172, n. 10; 2010, 227; Chapter 5, below). Hayek is mentioned in passing—but Mises not at all—in Robert Bartley’s (1992) The Seven Fat Years: And How to Do It Again; and George Melloan’s (2017) Free People, Free Markets: How the Wall Street Journal Opinion Pages Shaped America mentions Hayek once and Mises not at all. But sections of Hayek’s (1960) Constitution of Liberty were serialized (16 and 17 March 1960) in the Journal alongside a glowing ‘Review and Outlook’ piece on ‘The Community of Liberty.’ And in ‘An Honor for a Philosopher’ (17 June 1961) the Journal adding their own hagiography to the salutation accompanying Mises’ NYU Honorary Doctorate of Laws: Mises had demonstrated that the ‘free market and the free society are indissoluble. In this sense, von Mises is the champion not merely of an economic philosophy but of the ­potential of Man.’61 Fund transcribed and edited The Way Things Ought to Be—which had been dictated by the inflammatory, far-right radio celebrity, Rush

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     27

Limbaugh (1992). At The Wall Street Journal, Fund appeared to act as an MPS lobbyist rather than a journalist. At the 1989 New Zealand MPS meeting, he chaired the session on ‘The Work of the Institutes’ at which William Mellor III (Pacific Research Institute for Public Policy and formerly Ronald Reagan’s deputy general counsel for legislation and regulations in the Department of Energy) talked about ‘Law and Economics’ and Jane Shaw (Political Economy Research Centre, PERC) promoted ‘Free-market Environmentalism.’62 According to his website, Mellor’s work has ‘appeared in the Wall Street Journal,’ he was ‘profiled in the Wall Street Journal Weekend Interview on January 7, 2012,’ and in a 2012 broadcast of his Fox Business show Stossel, John Stossel named Mellor a ‘Champion of Freedom.’63

Thirty-three members of Reagan’s Administration were associated with the Committee on the Present Danger (a lobby group promoting, first, the Cold War and then the ludicrously titled, terror-based ­‘war-on-terror’). These included William Casey (CIA Director), Richard Allen (National Security Adviser), Jeanne Kirkpatrick (US Ambassador to the UN), George Shultz (Secretary of State), Richard Perle (Assistant Secretary of Defense), plus Peter Hannaford. Fund (30 May 1990) suggested to Feulner that Hannaford would arrange for Reagan to address the Munich MPS meeting—adding that Claudia Rosett and Tim Ferguson had both written articles for The Wall Street Journal based on MPS meeting and that it would be of ‘mutual’ benefit if he could also attend the meeting. Feulner (1 June 1990) replied that he would ask Reagan in person later that month.64 The session on ‘Energy and Environmental Policy’ at the August 1991 MPS meeting in Montana was chaired by Michael Canes (Chief Economist and Vice President, American Petroleum Institute); the speakers were Richard Bilas (California Energy Commission), James Johnson (Senior Economist Amoco) and Bob Hawley (Meridian Oil); and the commentators were Martin Gibson (Gibson and Barragan, a trustee of the Foundation for Research on Economics and the Environment, FREE) and Ed Capen (Distinguished Management

28     R. Leeson

Adviser, ARCO). Of the total revenue for the meeting ($348,872), $205,872 came from ‘Corporate and Foundation Grants.’ The brochure thanked Chemical Manufacturers, Coca Cola, the Monsanto Fund and Unocal Corporation in addition to three foundations, William H. Donner, Lynde and Harry Bradley and John M. Ohlin. MPS officials appear to have been concerned that their name had been hijacked by FREE: an internal memo referring to the ‘John Baden problem’ suggested that Baden be told that what he was planning for the 1991 MPS meeting was ‘unprecedented. That way he will know that you are watching him, but you will not have assumed responsibility for his [emphasis added] meeting.’65 But Baden received $50,000 from Union Oil Company and was expecting more from Meridian Oil.66 Pornography—which ‘objectifies’ the ‘other’ for arousal purposes— sheds light on religiosity. Friedman (17 April 1990) told MPS President Antonio Martino that a ‘disturbingly large fraction of members are present at the meetings essentially as voyeurs and not as real participants.’67 Friedman (29 August 1989) also complained to Nobutane Kiuchi (29 August 1989) that the proportion of ‘thinkers and doers’ relative to ‘fellow-travellers’ at MPS meetings had gotten ‘too small … A large fraction of the people who come to our Society are there in considerable part as tourists.’68 As MPS President (1970–1972), Friedman had sought to close the Society down (Leeson 2013, Chapter 1). The 1998 MPS ‘Golden Anniversary’ meeting in Washington addressed ‘Free Markets and Free People—the Barriers Remaining.’69 And at the 1999 Vancouver MPS meeting, ‘voyeurs’ could observe Shultz, Sir Alan Walters (Vice Chairman and Director, AIG Trading Group), Robert McTeer (President of the Dallas Fed), Jerry Jordan (President of the Cleveland Fed), Stanley Fisher (First Deputy Managing Director of the IMF and later Vice-Chair of the Fed), Robert Bartley (editor, Wall Street Journal ), Terence Corcoren (editor, Financial Post ), Tony Clement (Minister of the Environment, Ontario), Richard Fink (Executive Vice President, Koch Industries), plus oil company executives and lobbyists for the ‘free’ environmental market.70 The MPS Reagan-era budget deficits had a micro equivalent. Pascal Salin (6 February 1997) explained to Feulner that since Michel

1  Orwellian Rectifiers and the ‘Free’ Market Welfare State     29

Mouillot had been unable to make his promised contribution (he had been jailed for making a bribe of $600,000 to open a casino), $8,000 must trickle down from MPS International to cover the deficit for the MPS Cannes meeting.71 Reinhild Eid (1 September 1999) of Business Plus Lufthansa, told the MPS that Mr. Josef Ahorner must be invited to the MPS Potsdam meeting because he came from a ‘very important business family’ in Austria.72 Carl-Johan Westholm (7 February 1990; 29 June 1989) suggested to MPS Past President Herbert Giersch that ‘Swedish industry’ could be prevailed upon to find the forthcoming MPS meeting and that Sir James Goldsmith and Geoffrey, the Lord Rippon, could be ‘valuable’ MPS ‘financial’ asset. Rippon was a ­prominent member of the far-right Conservative Monday Club and President (1979–1982) of Habsburg’s European Documentation and Information Centre.73 Westholm (7 February 1990) also suggested that the time was ‘ripe’ for Assar Lindbeck, the Chair of the Nobel Prize Selection Committee (1980–1994), to be invited to MPS meetings.74 Two serving MPS Presidents, James Buchanan (1984–1986) and Gary Becker (1990– 1992), were awarded Nobel Prizes (1986 and 1992, respectively); and two months after the 1991 Montana MPS meeting, it was announced that another MPS member, Coase, would be rewarded. Baden (1991) asked readers of FREE’s Free Perspective to ‘Join us in cheering’ Coase’s Nobel Prize because he had suggested why ‘markets and incentives work better than politics in controlling pollution.’ Coase (17 August 1998) told Feulner that the MPS had been successful ‘beyond Hayek’s wildest dreams.’75 MPS ‘voyeurs’ interpret ‘The Coase Theorem’ as revealing that faith in the ‘free’ market could solve all market failure issues. Coase, however, had done for market failure what Léon Walras had done for (what later became known as) macroeconomics—he examined the characteristics of an imaginary frictionless world (with zero transaction costs). Knowingly or otherwise, the 1974 Nobel Prize Selection Committee had legitimized the ‘free’ market re-feudalization agenda; and the 1991 Selection Committee empowered Rothbard who orchestrated ‘free’ market economists to chant ‘We want externalities’ (Blundell 2014, 100, n. 7).

30     R. Leeson

2 Volume Overview Chapter 2 examines ‘The Economic Consequences of Blind Faith’— which could have been the subtitle of Keynes’ (1936) General Theory (Leeson and Schiffman 2015). Rothbard proclaimed: ‘we can learn a great deal from Lenin and the Leninists’—for purposes of ‘cadre development,’ they needed a ‘journal, a Society of Austrian Economists, and a favourable graduate department.’ ‘Conspiratorial silence’ was also required—including suppressing information about Hayek’s and Mises’ mental illnesses. On non-interference grounds, Hayek defended the ‘civilisation’ of apartheid from the American ‘fashion’ of ‘human right’—but routinely interfered with a variety of countries to promote his re-feudalisation agenda. After ‘German Austrian citizens,’ ‘equal before the law in all respects’ was forcibly imposed on Austrian nobles, Austrian ‘scholars’ continued to use aristocratic incentives to defend the ‘free’ market: ‘Noblemen owned the estates over which they hunted and therefore suffered capital losses if they failed to preserve their game.’ During the resulting Global Financial Crisis, Alan Greenspan ­acknowledged a ‘flaw’: ‘Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.’ Chapter 3 examines ‘The Politicization of Academia.’ Policy advocates often co-align on multiple fronts: market failure deniers (and climate change deniers in particular) are often proponents of ‘free’ market ‘liberty’ for the financial sector. Hayek referred to the Greens as the new barbarians in our midst; had he been a younger man, he would have concentrated on exposing Greens, instead of focusing almost exclusively on exposing Reds. As a forecaster, Hayek was ‘a little mistaken in his diagnosis of the post-war development’ (he was out by two decades); while Mises insisted that ‘policies of nonintervention prevailed—free trade, freely fluctuating wage rates, no form of social insurance, etc.— there would be no acute unemployment.’ After eight years of the ‘free’ market, real Russian per capita income fell 80%; 30% of Russians sank below the poverty line; life expectancy for Russian adult males declined by five years; and 40% of Russia’s children were chronically

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ill. Post-Communist Russia became ruled by a ‘small, self-perpetuating ­oligarchy’—an outcome that Rothbard promoted. Chapter 4 examines ‘Financial Considerations’ and the ‘Free’ Academic Market. Two concepts of civilization continue to compete: achieved versus ascribed status. The British branch of the neoclassical school endorses one vehicle; the Austrian branch the other. The British branch tends to embrace Pigouvian externality taxes; the Austrian branch embraces blind faith: ‘what we lack is a liberal Utopia’ where ‘for practically all regulations the costs are greater than the benefits. It is simpler to argue against regulations as such’—as Hayek put it. Or as Rothbard put it: the junk bond criminal, Michael Milken, was ‘the most creative financial innovator of our time.’ The British branch embraces tax-funded compulsory education; Mises provided n ­ eo-feudal foundation for Liberalism in the [Austrian] Classical Tradition: ‘There is, in fact, only one solution: the state, the government, the laws must not in any way concern themselves with schooling or education. Public funds must not be used for such purposes.’ The British branch has genuinely acquired academic credentials; while the Austrian branch award themselves doctorates and ‘Post-Doctoral Fellowships’ at, for example, NYU and Stanford. Chapter 5 analyses Hayek’s description of the MPS achievement: a ‘consistent doctrine and some international circles of communication.’ According to the MPS Statement of Aims: ‘It aligns itself with no particular party.’ Yet the MPS President (1996–1998), Edwin Feulner had been Executive Director of the Republican Study Group before becoming President of the Heritage Foundation (1977–2013); and of the 76 economic advisers on Reagan’s 1980 campaign staff, 22 were MPS members. Two chairs of the Federal Reserve—Arthur Burns and Alan Greenspan— were MPS members; as were Jerry Jordan (President of the Cleveland Fed), Homer Jones (Senior Vice President of the St. Louis Fed), plus six chairs of Republican President’s Council of Economic Advisers (Burns, Greenspan, Paul McCracken, Herbert Stein, Martin Feldstein and Beryl Sprinkel). In the UK, MPS members are overwhelmingly associated with the Conservative Party; and in Chile, MPS membership appears to be synonymous with the promotion of Pinochet’s dictatorship.

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In the six years between the collapse of the Soviet Union and the 1997/1998 financial crises in Asia, Russia and the United States, nine Nobel Prizes for Economic Sciences were awarded to those whose work was interpreted as promoting the ‘free’ market. And at the Federal Reserve, Alan Greenspan had three Vice-Chairs who were also associated with deregulation-euphoria. Indiscriminate privatization assisted the rise of Putin’s ‘Russia of the Oligarchs’—which is consistent with Rothbard’s promotion of the ‘Iron Law of Oligarchy.’ The evidence ­suggests that the ‘Tea Party’ was founded and funded by the Koch brothers; and although the (illegal) ‘von Party’ was ‘founded’ by the (1947–) MPS and ‘ennobled’ (and enabled) by the 1974 Nobel Prize—that too appears to be largely funded from the same source. If ‘grassroots’ is, in reality, funded ‘astroturf ’: are lobbyists masquerading as Austrian ‘scholars’? Chapter 6 examines the funding and the utopianism that underpins the promotion of the ‘free’ market for tobacco and fossil fuels. Should those employed as teachers train students to think critically and evaluate evidence—or should they promote ‘intellectual orgies’ to entrap impressionable adolescents? The Austrian School of Economics—like the ‘Tea Party’—is funded by the ‘free’ market tobacco and fossil fuel industries: should those who disparage the ‘non-concept’ of ‘education’ be employed by the tax-payer in educational institutions and/or receive tax-deductible donations via ‘educational charities’? Should those who falsely claim to have Ph.D.s be tax-funded as ‘PostDoctoral Fellows’ and ‘Professors’? Their level of basic competence and economic literacy appears to be low—yet they become funded ‘experts’ on environmental policy issues. Chapter 7 examines some of the dubious material that they impress upon their students and the ­Koch-funded ‘Hayek-inspired’ ‘knowledge’ production line that drives their ‘academic’ agenda. Mises’ motto was ‘Do not give into evil, but proceed ever more boldly against it’—one of his targets was the ‘böse Saat ’—‘evil seed’— of Christianity. In 1922, Mises declared that the Church must liberate itself from ‘the words of the Scriptures’ because the First Estate (the clergy) had failed to prop-up the neo-feudal social hierarchy which, until 1918, had provided the foundations of his intergenerational entitlement program: ‘All efforts to find support for the institution

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of private property in general and private ownership of the means of ­production in particular, in the teachings of Christ are quite vain.’ In 1927, Mises found a replacement: ‘The victory of Fascism in a number of countries is only an episode in the long series of struggles over the problem of property.’ The ‘Fascists’ praised by Mises included ‘Germans and Italians,’ ‘Ludendorff and Hitler’ (Chapter 8). Chapter 9 describes the ‘German Villains and Austrian Victims’ ‘knowledge’ production process. In 1939, ‘von’ Hayek sought to persuade the BBC to employ him for propaganda broadcasts instead of the then-employed ‘Viennese Jew’ with a ‘very unpleasant’ Jewish accent. He also proposed the establishment of a Propaganda Commission—it was ‘important, in view of the prejudices existing not only in Germany, not to have a person of Jewish race or descent on the commission.’ After Hitler’s defeat, Hayek became a leading Cold War propagandist. After his 1974 Nobel Prize, Hayek made a series of nuanced and misleading ‘confessions’ about the deflation that he and Mises had promoted and which had facilitated Hitler’s rise to power. The truth-content of these ‘confessions’ appears to resemble the truth-content of the Mises-inspired mythology that Germans were the ‘villains’ and Austrians the ‘victims’ and that Nazism had not originated in Austria (where the evidence ­suggests it had been promoted by Hayek’s family). Who Lies Behind the ‘Free’ Market (Chapter 10)? In 1938, almost 100% of Austrians voted in favour of Anschluss with Germany; and then, Austrians—who comprised only 8% of the total ­population— rapidly became disproportionately represented as SS members, concentration camp staff and commanders. Austrian territory was the road to serfdom for the 800,000 victims who were compelled to work as war-time slave labourers (many of whom were murdered as the Allies advanced). This history was rectified by the war-time Austrian National Committee which united all Austrian ‘­rightwingers’ and provided them with political representation in Washington. One of their successes was the proclamation of ‘Austrian Day’ (25 July 1942) by twelve US State Governors (the ‘dissociation of German villains and Austrian victims’). Otto the Habsburg Pretender— Opus Dei’s candidate as monarch to rule over a united Catholic Europe—was the leading force behind this Orwellian rectification.

34     R. Leeson

In 1980, Hayek and Brian Crozier also used ‘unscrupulous methods’ to try and get Habsburg’s associate, Franz-Josef Strauss, elected as West German Chancellor. They were assisted and funded by the carbon lobby and the Heritage Foundation, where ‘scholars’ ‘hovered’ around Hayek ‘with a combination of delight and awe that makes them seem like small boys around a football hero.’

Notes 1. http://sites.wofford.edu/terrelltd/. 2. https://www.mises.org/profile/george-koether. 3. David Henderson reported to Blundell (2014, 94, n. 1) that ‘The Wall Street Journal writer Ida Walters’ attended the 1974 revivalist conference and ‘that was where she met Harry Watson; they married soon after.’ 4. https://www.heartland.org/about-us/who-we-are/roy-cordato. 5. An unauthorized biographer, Ebenstein (2003), sought MPS membership and attended MPS meetings as a guest. 6. Lorenzo Bona (9 January 1959) to Hunold. MPS Archives Box 41.3. 7. Fisher (n.d.) to Hunold. MPS Archives Box 41.10. 8. Kershner (6 June 1960) to Hunold. MPS Archives Box 43.2. 9. MPS Archives Box 53.3. 10. MPS Archives Box 66. 11. http://www.economist.com/news/britain/21723101-country-will-soongo-bat-against-brussels-one-its-weakest-teams-decades. 12. http://mises.org/pdf/asc/essays/kuehneltLeddihn.pdf. 13. http://www.cato.org/special/friedman/friedman/friedman4.html. 14. MPS Archives Box 47.2. 15. https://www.montpelerin.org/statement-of-aims/. 16. Hayek Archives Box 27.6. 17. Davenport Archives Box 36.8. 18. Friedrich Hayek interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 19. ‘What we lack is a liberal Utopia, a program which seems neither a mere defense of things as they are nor a diluted kind of socialism, but a truly liberal radicalism which does not spare the susceptibilities of the mighty (including the trade unions), which is not too severely practical,

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and which does not confine itself to what appears today as politically possible. We need intellectual leaders who are willing to work for an ideal, however small may be the prospects of its early realization.’ 20. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 21. https://web.archive.org/web/20080514003423/http://www.cnn.com/ SPECIALS/cold.war/episodes/06/documents/huac/disney.html. 22. Hayek Papers Box 123.7. 23. https://www.montpelerin.org/statement-of-aims/. 24. MPS Archives Box 100. 25. Caldwell persuaded the AIEE editor to arrange accommodation for him in Palo Alto for two consecutive summers while he sought to obtain employment in California (he appeared desperate to leave Duke and appeared to be terrified of one of his colleagues): ‘I have kept my silence until now, but this claim is so outrageous on a number of levels that I can keep silent no longer. There are around 170 boxes in the Hayek archives. Jeremy Shearmur went through the entire archives a couple of summers ago and noticed nothing missing. I have not visited the archives in the summer for a couple of years, for perhaps obvious reasons, but when I was there last all seemed intact. I have heard of no black market for Hayek’s things, thriving or otherwise. Hayek’s notes on a meeting with Herbert Hoover and a set of lecture notes are 2 things that were reported for sale a number of years ago. The only person who has worked in the archives regularly, indeed constantly every summer, is Robert Leeson, who it may be noted manages to live in tony Palo Alto each summer on a part-time visitor’s salary and who seems to know a lot about a thriving black market. If things are missing, I just don’t know what to think’ (Caldwell SHOE 31 May 2014). 26. MPS Archives Box 68. 27. https://fee.org/articles/the-essence-of-the-road-to-serfdom-in-cartoons/. 28. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 29. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 30. https://web.archive.org/web/20060518072723/http://disney.go.com/disneyatoz/familymuseum/exhibits/articles/dreamingdisneyland/index.html.

36     R. Leeson

31. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 32. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 33. Hayek Archives Box 28.13. This section of the interview was edited-out of the version that was first published in Reason (Hayek 1992b [1977]). I am grateful to Thomas Hazlett for permission to cite from the unpublished section of the interview. 34. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 35. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 36. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 37. Skibbins (30 March 1959) to Hunold. MPS Archives Box 40.8. 38. MPS Archives Box 57.4. Royster (4 December 1958) to Hunold. MPS Archives Box 39.4. Royster (4 December 1958) to Hunold. MPS Archives Box 39.4. 39. MPS Archives Boxes 66 and 78. 40. MPS Archives Box 92. 41. MPS Archives Box 120. 42. May (13 December 1958) to Hunold. MPS Archives Box 40.7. 43. Nominated by Hayek in 1978. MPS Archives Box 74. 44. MPS Archives Box 66. 45. MPS Archives Box 58.2. 46. MPS Archives Box 86. 47. Nominated in 1990 by Leonard Liggio. MPS Archives Box 93. 48. MPS Archives Box 51.7. 49. MPS Archives Box 66. 50. MPS Archives Box 66. 51. MPS Archives Box 78. 52. MPS Archives Box 53.8. 53. MPS Archives Box 121 ‘Correspondence.’ 54. MPS Archives Box 121.

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5. MPS Archives Box 123. 5 56. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 57. Friedrich Hayek, interviewed by Armen Alchian 11 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 58. https://www.wsj.com/articles/paris-climate-of-conformity-1450048095. 59. http://www.foxnews.com/transcript/2017/10/21/does-us-have-strategyfor-post-isis-middle-east.html. 60. https://static1.squarespace.com/static/…/t/…/FINAL_CN_WSJ_ white_paper-0613.pdf. 61. https://history.fee.org/publications/ludwig-von-mises-honors-andawards/. IHS Archives Box 11 ‘Correspondence 1971.’ 62. MPS Archives Box 89. 63. http://ij.org/staff/william-h-mellor/. 64. MPS Archives Box 95. 65. MPS Archives Box 98. 66. MPS Archives Box 98. 67. Friedman Papers Box 200.6. 68. MPS Archives Box 91. 69. MPS Archives Box 123. 70. MPS Archives Box 130. 71. MPS Archives Box 122. 72. MPS Archives Box 129. 73. MPS Archives Box 92. 74. MPS Archives Box 92. 75. MPS Archives Box 124.

References Archival Insights into the Evolution of Economics (and Related Projects) Farrant, A., & McPhail, E. (2017). Hayek, Thatcher, and the Muddle of the Middle. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part IX: The Divine Right of the ‘Free’ Market. Basingstoke, England: Palgrave Macmillan.

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Haiduk, K. (2015). Hayek and Coase Travel East: Privatization and the Experience of Post-Socialist Economic Transformation. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part VI Good Dictators, Sovereign Producers and Hayek’s ‘Ruthless Consistency’. Basingstoke: Palgrave Macmillan. Leeson, R. (1997a, February). The Trade Off Interpretation of Phillips’ Dynamic Stabilisation Exercise. Economica, 64(253), 155–173. Leeson, R. (1997b). The Political Economy of the Inflation Unemployment Trade-Off. History of Political Economy, 29(1), 117–156. Leeson, R. (1997c). The Eclipse of the Goal of Zero Inflation. History of Political Economy Fall, 29(3), 445–496. Leeson, R. (1998). The Origins of the Keynesian Discomfiture. Journal of Post Keynesian Economics, 20(4), 597–619. Leeson, R. (1999). Keynes and the Keynesian Phillips Curve. History of Political Economy, 31(3), 494–509. Leeson, R. (Ed.). (2013). Hayek: A Collaborative Biography Part I Influences From Mises to Bartley. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2015a). Hayek: A Collaborative Biography Part II Austria, America and the Rise of Hitler, 1899–1933. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2015b). Hayek: A Collaborative Biography Part III Fraud, Fascism and Free Market Religion. Basingstoke: Palgrave Macmillan. Leeson, R., & Schiffman, D. (2015). The Triumph of Rhetoric: Pigou as Keynesian Whipping Boy and Its Unintended Consequences. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part III Fraud, Fascism and Free Market Religion. Basingstoke: Palgrave Macmillan. West, N. (2015). Hayek: A Collaborative Biography Part III Fraud, Fascism and Free Market Religion (R. Leeson, Ed.). Basingstoke: Palgrave Macmillan.

Other References Baden, J. (1991). Chairman’s Welcome: Doing Business in Green America. Free Perspectives, V(3), MPS Archives Box 100. Bartley, R. (1992). The Seven Fat Years: And How to Do It Again. New York: Free Press. Block, W. (2000). Libertarianism vs Objectivism; A Response to Peter Schwartz. Reason Papers, 26, 39–62. http://www.reasonpapers.com/pdf/26/ rp_26_4.pdf.

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Block, W. (Ed.). (2010). I Chose Liberty Autobiographies of Contemporary Libertarians. Auburn, AL: Ludwig von Mises Institute. Blundell, J. (2008, September 19). Sudha R. Shenoy 1943–2008, Remembered Fondly. Institute of Economic Affairs. http://www.iea.org.uk/blog/sudha-rshenoy-1943-2008-remembered-fondly. Blundell, J. (2014). IHS and the Rebirth of Austrian Economics: Some Reflections on 1974–1976. Quarterly Journal of Austrian Economics, 17(1), 92–107. https://mises.org/library/ihs-and-rebirth-austrian-economics-somereflections-1974%E2%80%931976. Boettke, P. J. (2005). Teaching Economics Through Ayn Rand: How the Economy Is Like a Novel and How the Novel Can Teach Us About Economics. The Journal of Ayn Rand Studies. Centenary Symposium, Part II Ayn Rand Among the Austrians, 6(2), 445–465. https://www.researchgate. net/publication/228258039_Teaching_Economics_Through_Ayn_Rand_ How_the_Economy_is_Like_a_Novel_and_How_the_Novel_Can_Teach_ Us_About_Economics. Boettke, P. J. (2012). Interview with Peter Boettke. Rationality Unlimited. https://rationalityunlimited.wordpress.com/2012/04/02/interview-withpeter-boettke/. Boettke, P. J. (2014, June 7). Robert Leeson, Hayek and the Underpants Gnome. Coordination Problem. http://www.coordinationproblem.org/2014/06/robertleeson-hayek-and-the-underpants-gnomes.html. Buchanan, J. (1986, October 26). Why Governments ‘Got Out of Hand.’ The New York Times. Caldwell, B. (2004). Hayek’s Challenge: An Intellectual Biography of F. A. Hayek. Chicago: University of Chicago Press. Caldwell, B. (2014). 2013–2014 Annual Report. CHOPE: Duke University. Caldwell, B., & Montes, L. (2014a, August). Friedrich Hayek and His Visits to Chile (CHOPE Working Paper No. 2014–12). Caldwell, B., & Montes, L. (2014b). Friedrich Hayek and His Visits to Chile. Review of Austrian Economics. First online: 26 September 2014. Caldwell, B., & Montes, L. (2015, September). Friedrich Hayek and His Visits to Chile. Review of Austrian Economics, 28(3), 261–309. Cordato, R. E. (1992). Coase’s Nobel Prize. Austrian Economics Newsletter, 13(2). https://mises.org/library/coases-nobel-prize-full-edition-vol-13-no-2 https://mises.org/system/tdf/aen11_2_1_1.pdf?file=1&type=document. Cubitt, C. (2006). A Life of August von Hayek. Bedford, England: Authors on Line.

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DeTora, L. M. (Ed.). (2009). Heroes of Film, Comics and American Culture: Essays on Real and Fictional Defenders of Home. London: McFarland. Doherty, B. (2007). Radicals for Capitalism: A Freewheeling History of the Modern. American Libertarian Movement. New York: Public Affairs. Driver, D. (2007, May 22). The Five-Minute Interview: Peter Boettke, Professor, Economist, Alum. The Mason Gazette. https://gazette.gmu.edu/ articles/10284. Ebeling, R. M. (2006, May 1). John Maynard Keynes: The Damage Still Done by a Defunct Economist Keynes Provided a Rationale for Government Spending and Pandering to Special Interests. FEE. https://fee.org/articles/ john-maynard-keynes-the-damage-still-done-by-a-defunct-economist/. Ebeling, R. M. (2010, July 10). Still Hearing Defunct Economists in the Air: Krugman’s Misplaced Attack on Hayek. Think Markets. https://thinkmarkets.wordpress.com/2010/07/10/still-hearing-defunct-economists-in-theair-krugmans-misplaced-attack-on-hayek/. Ebenstein, A. (2003). Friedrich Hayek: A Biography. Chicago: University of Chicago Press. Feulner, E. (1995, October 26). Draft of Article. National Review (40th Anniversary Edition). MPS Archives Box 114. Feulner, E. (1997). Seven Principles of a Free Society. MPS Presidential address. Finer, H. (1945). The Road to Reaction. Chicago: Quadrangle Books. Friedman, M. F. (2002). Economic Freedom Behind the Scenes. In James D. Gwartney & Robert Lawson (Eds.), Economic Freedom of the World: 2002 Annual Report. Canada: The Fraser Institute. Friedman, M. F., & Friedman, R. D. (1998). Two Lucky People: Memoirs. Chicago: University of Chicago Press. Gray, R. (2017, February 10). Conflict Over Trump Forces Out an Opinion Editor at The Wall Street Journal. The Atlantic. https://www.theatlantic.com/ politics/archive/2017/02/conflict-over-trump-forces-out-an-opinion-editorat-the-wall-street-journal/516318/. Hammond, J. D., & Hammond, C. H. (Eds.). (2006). Making Chicago Price Theory: Friedman-Stigler Correspondence, 1945–1957. London: Routledge. Harberger, A. C. (2016). Sense and Economics: An Oral History with Arnold Harberger. Interviews Conducted by Paul Burnett in 2015 and 2016 Oral History Center, the Bancroft Library, University of California Berkeley, California. http://digitalassets.lib.berkeley.edu/roho/ucb/text/harberger_arnold_ 2016.pdf. Hartwell, R. M. (1995). A History of the Mont Pelerin Society. Indianapolis: Liberty Fund.

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Hayek, F. A. (1949). The Intellectuals and Socialism. University of Chicago Law Review, 16(3), 417–433. Hayek, F. A. (1960). The Constitution of Liberty. Chicago: University of Chicago Press. Hayek, F. A. (1972). Tiger by the Tail The Keynesian Legacy of Inflation (S. Shenoy, Ed.). London: Institute of Economic Affairs. Hayek, F. A. (1977, September). An Interview with Friedrich Hayek. By Richard Ebeling. Libertarian Review 10–18. Hayek Archives Box 109.14. Hayek, F. A. (1978). Oral History Interviews. Centre for Oral History Research, University of California, Los Angeles. http://oralhistory.library.ucla.edu/. Hayek, F. A. (1992a). The Fortunes of Liberalism Essays on Austrian Economics and the Ideal of Freedom The Collected Works of F. A. Hayek (P. Klein, Ed.). Chicago: University of Chicago Press. Hayek, F. A. (1992b [1977], July). The Road from Serfdom. Reason. http:// reason.com/archives/1992/07/01/the-road-from-serfdom/5. Hayek, F. A. (1994). Hayek on Hayek an Autobiographical Dialogue. The Collected Works of F. A. Hayek (S. Kresge & L. Wenar, Eds.) Chicago: University of Chicago Press. Hayek, F. A. (1999). Good Money, Part 1. The New World The Collected Works of F. A. Hayek (S. Kresge, Ed.). London: Routledge. Hayek, F. A. (2007 [1944]). The Road to Serfdom: The Definitive Edition. The Collected Works of F. A. Hayek (B. Caldwell, Ed.). Chicago: University of Chicago Press. Hayek, F. A. (2011 [1960]). The Constitution of Liberty. The Definitive Edition The Collected Works of F. A. Hayek (R. Hamowy, Ed.). Chicago: University of Chicago Press. Hildebrandt, S. (2013, July). Wolfgang Bargmann (1906–1978) and Heinrich von Hayek (1900–1969): Careers in anatomy continuing through German National Socialism to postwar leadership. Annals of Anatomy Anatomischer Anzeiger, 195(4), 283–295. http://www.sciencedirect.com/science/article/ pii/S0940960213000782. Hildebrandt, S. (2016). The Anatomy of Murder Ethical Transgressions and Anatomical Science during the Third Reich. New York: Berghahn. Holt, S. (2008). Mr Y and Mr Gorton. Quadrant 7 October. https://quadrant. org.au/magazine/2008/10/mr-y-and-mr-gorton/. Hoppe, H.-H. (2017, October 7). Coming of Age with Murray. Mises Institute’s 35th Anniversary celebration in New York City. https://mises. org/library/coming-age-murray-0.

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Kakutani, M. (2015, August, 10). Review: Ayn Rand’s ‘Ideal’ Presents a Protagonist Familiar in Her Superiority. New York Times. https://www. nytimes.com/2015/08/11/books/review-ayn-rands-ideal-presents-a-protagonist-familiar-in-her-superiority.html. Kershner, H. E. (1971). In F. A. Hayek, L. Read, H. Hazlitt, F. A. Harper, & G. Velasco (Eds.), Vol 2. Towards Liberty Essays in Honor of Ludwig von Mises Menlo Park: Institute for Humane Studies. Keynes, J. M. (1936). General Theory of Employment, Interest and Money. New York and London: Harcourt, Brace. Klausinger, H. (2010). Hayek on Practical Business Cycle Research: A Note. In H. Hagemann, T. Nishizawa, & Y. Ikeda (Eds.), Austrian Economics in Transition: From Carl Menger to Friedrich Hayek (pp. 218–234). Basingstoke: Palgrave Macmillan. Klausinger, H. (2012). Editorial notes. In F. A. Hayek (Ed.), Business Cycles Volume VII The Collected Works of F.A. Hayek. Chicago: University of Chicago Press. Leonard, R. (2011). The Collapse of Interwar Vienna: Oskar Morgenstern’s Community, 1925–50. History of Political Economy, 43(1), 83–130. Limbaugh, R. (1992). The Way Things Ought to Be. New York: Pocket Books. Macaulay, T. B. (2009 [1848]). The History of England from the Accession of James II, Part 8. New York: Cosimo. Melloan, G. (2017). Free People, Free Markets: How the Wall Street Journal Opinion Pages Shaped America. New York: Encounter. Miller, J. (2013, April 8). Feulner’s Farewell. National Review. https://www. nationalreview.com/nrd/articles/343542/feulners-farewell. Minow, N. (1961, May 9). Television and the Public Interest. http://www. americanrhetoric.com/speeches/newtonminow.htm. Mises, L. (1922). Die Gemeinwirtschaft: Untersuchungen über den Sozialismus. Jena: Gustav Fischer Verlag. http://docs.mises.de/Mises/Mises_Gemeinwirtschaft. pdf. Mises, L. (1961, April 18). Unemployment and the Height of Wage Rates. Christian Economics. https://history.fee.org/publications/unemployment-andthe-height-of-wage-rates/. Mises, L. (1985 [1927]). Liberalism in the Classical Tradition (R. Raico, Trans.). Auburn, AL: Mises Institute. Mises, L. (2008 [1956]). The Anti-Capitalist Mentality. Auburn, AL: Ludwig von Mises Institute. Novak, R. (2003, January 13). Who is Robert Bartley? Weekly Standard. http:// www.weeklystandard.com/article/3341.

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Orwell, G. (1949). Nineteen Eighty Four. London: Secker and Warburg. Peterson, W. H. (1982, March). Mises and Keynes. The Freeman. https://history.fee.org/publications/mises-and-keynes/. Peterson, W. H. (1996, July 1). A History of the Mont Pelerin Society. The Freeman. https://fee.org/articles/a-history-of-the-mont-pelerin-society/. Rand, A. (2015 [1934]). Ideal The Novel and the Play. New York: New American Library. Rothbard, M. N. (1994). A New Strategy for Liberty. Rothbard Rockwell Report. http://www.unz.org/Pub/RothbardRockwellReport-1994oct-00001. Rothbard, M. N. (2010). Strictly Confidential: The Private Volker Fund Memos of Murray N. Rothbard (D. Gordon, Ed.). Auburn, AL: Ludwig von Mises Institute. Salerno, J. (1996). Why We Are Winning an Interview with Joseph Salerno. Austrian Economic Newsletter, 16(3). https://mises.org/library/ why-were-winning-interview-joseph-t-salerno. Shenoy, S. (2003). An Interview with Sudha Shenoy. Austrian Economics Newsletter, 1–8. http://mises.org/journals/aen/aen23_4_1.pdf. Terrell, T. D. (2003). The Vocation of Economics: An Interview with Timothy Terrell. Austrian Economics Newsletter, 23(1). https://mises.org/library/ vocation-economics-interview-timothy-terrell. Todd, S. (2014). The People: The Rise and Fall of the Working Class, 1910-2010. London: John Murray. Trilling, L. (2008 [1950]). The Liberal Imagination Essays on Literature and Society. New York: New York Review of Books. Trump, D. (1987). The Art of the Deal. New York: Random House. Utley, J. B. (2000, November 29). News From Mont Pelerin. Mises Daily. https://mises.org/library/news-mont-pelerin. Watts, S. (1997). The Magic Kingdom: Walt Disney and the American Way of Life. Boston, MA: Houghton Mifflin Company. Wieser, F. (1927 [1914]). Social Economics (A. Ford Hinrichs Trans.). with a preface by Wesley Clair Mitchell. London: George Allen and Unwin. Wieser, F. (1983 [1926]). The Law of Power. University of Nebraska-Lincoln: Bureau of Business Research. Williams, R. (1995, July 7). ‘Sunday Times’ pays Foot damages over KGB claim. Independent. http://www.independent.co.uk/news/sunday-timespays-foot-damages-over-kgb-claim-1590325.html.

2 The Economic Consequences of Blind Faith

1 ‘Conspiratorial Silence’ and Human Rights According to Nancy MacLean (2017, xiii, xiv, 117, 119), the 1954 Supreme Court Brown versus Board of Education decision was an emergency for the President of the University of Virginia, Colgate Whitehead Darden Jr. So too for James Buchanan, who proposed to Darden that he fund a new Institute that would defeat the ‘perverted form of liberalism’ that was challenging the ‘social order’ based on ‘individual liberty.’ In 1972, the Scaife Family Charitable Trusts agreed to fund Buchanan’s new centre at Virginia Tech; and the following year, Buchanan insisted that ‘conspiratorial secrecy is at all times essential.’ In Strictly Confidential: The Private Volker Fund Memos of Murray N. Rothbard, Rothbard (2010 [1961], 8) sought to move ‘free’ market ‘education’ ‘Toward A Theory of Revolutionary Strategy’: ‘we can learn a great deal from Lenin and the Leninists.’ Hayek (1992b [1977]) described the MPS achievement: a ‘consistent doctrine and some international circles of communication’; and according to Hülsmann (2007, 1004), furtive communication was the method by which this consistent doctrine was fostered. Jean-Pierre Hamilius (11 October 1953) wrote to Mises after the 1953 © The Author(s) 2018 R. Leeson, Hayek: A Collaborative Biography, Archival Insights into the Evolution of Economics, https://doi.org/10.1007/978-3-319-77428-2_2

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MPS Seelisberg meeting having observed that the society was ideologically divided into ‘different groups and clans.’ He aligned with the American group (Mises, Hayek, Hazlitt, Morley, Fertig and Miller); while the other side (who were unaware that he was Mises’ ‘guest’ at the meeting), had expressed reservations about the ‘old guard (Mises, Hayek, …)’—the ‘old conservatives.’ Hamilius documented heresy: John van Sickle proposed taxing rich heirs, Röpke favoured subsidies for homeowners, and Otto Veit argued that ‘heavy taxation would not deter entrepreneurs from working.’ The post-war German ‘economic miracle’ associated with Ludwig Erhard, Röpke (Geneva), Alexander Rüstow (Heidelberg), and Walter Eucken (Freiburg) bolstered the credibility of the ‘social market economy’ and the Ordo Liberal School (Vanberg 2013; Goldschmidt and Hesse 2013; Filip 2018). Mises sought to monopolize the MPS with his assertion that only the State could maintain monopoly. According to Hülsmann (2007, 1009), it was ‘probably’ due to Mises’ influence that monopoly was not formally discussed until the 1956 MPS Berlin meeting. Hayek (25 October 1955) reported to Mises that several German professorial members had urged him to put the ‘monopoly question’ on the programme. Rothbard (3 August 1974) told Newsweek: ‘Just wait until we establish a graduate school.’ After 1974, the ‘free’ market began to monopolize various university departments and military colleges.1 Rothbard ‘emphasized that the Austrians’ greatest needs are institutional: we require a journal, a Society of Austrian Economists, and a favourable graduate department’ (cited by Lavoie 1977). Cordato (1989, 10) announced the formation of an ‘Austrian Economics Society’; and Ebeling (2014) celebrated the existence of a (fully-funded) ‘professional Society for the Development of Austrian Economics’ (1996–).2 The HES is the v­ ehicle through which Austrian School economists seek ‘academic’ c­redibility and ‘respect.’ Laurence Moss (1944–2009) arranged for Hayek—a ­transparent fraud—to be made an HES ‘Distinguished Fellow’: Your thesis that civilization largely depends on the recognition that ‘spontaneous social formations’ are order-producing and your efforts to locate that idea in the writings of centuries of thinkers represents considerable intellectual achievements.3

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Charles Koch (1978, 30) regards the public as ‘gullible’4; while Boettke (2014) regards historians of economic thought as ‘gullible.’ Caldwell is a Past HES President and Director of Duke University’s Centre for the History of Political Economy (CHOPE). In ‘Friedrich Hayek and His Visits to Chile,’ Caldwell and Montes (2014a, 3, n. 8; 2014b; 2015a, 263, n. 8) complained about (unspecified) attempts to ‘establish links between Austrian thought and fascism’ before making a ‘definitive’ statement: ‘We might simply point out the other obvious fact that, as a Jew and a classical liberal, Mises was persona non grata among both the Nazi and Stalinist regimes … He is as unlikely a candidate for being considered a fascist as he is for being a communist.’ Their academically unpublishable paper was published un-refereed in the ‘referred’ Rothbard-founded, Boettke-edited Review of Austrian Economics on whose editorial board Shenoy and ‘Dr. Kurt Leube’ had sat.5 According to Caldwell, ‘Friedrich Hayek and His Visits to Chile’ was the ‘Winner of the Foundation of [sic] Economic Education (FEE) 2015 Best Article Award’6; and at the 2016 Duke University HES conference, it was awarded the ‘Craufurd Goodwin Best Article in the History of Economics Prize.’7 Koch funding has received ‘widespread acceptance—in universities like Brown, Dartmouth and Duke’ (Glassman 2011). Duke’s Goodwin (1988)—the long-time HOPE editor (1969–2009) who in conversation expressed concern about the Austrian colonization of his community—is the author of ‘The Heterogeneity of the Economists’ Discourse: Philosopher, Priest and Hired Gun.’ In the Manhattan Institute third annual Walter B. Wriston Lecture in Public Policy, Murdoch (1990) described ‘The War on Technology’ in Hayekian terms (Chapter 4, below); and Caldwell is the ‘inaugural recipient’ of the ‘Manhattan Institute, Hayek Scholarship Prize, 2016.’8 President Reagan subverted the Constitution of the United States by trading hostages for arms (the Iran-contra scandal); and Casey, his 1980 campaign manager (and co-founder, with Fisher, of the Manhattan Institute), is suspected of committing treason by trading the freedom of fifty-two diplomatic hostages for election victory (Teacher 2018a, b). According to Carter’s chief White House aide for Persian Gulf affairs (1976–1981), a series of Paris meetings between members of the 1980

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Reagan-Bush campaign (including Casey) and high-level Iranian and Israeli representatives negotiated a deal: the Iranian ­ representatives ‘agreed that the hostages would not be released prior to the Presidential election on Nov. 4; in return, Israel would serve as a conduit for arms and spare parts to Iran.’ The hostages were released minutes after Reagan’s inauguration; and the arms then flowed freely to Iran (Sick 1991a, b). According to Kai Bird (2017), a ‘damning’ memo in the George H. W. Bush Presidential Library written by Bush’s deputy counsel, Paul Beach, described the State Department’s efforts to collect documents in response to congressional subpoenas for ‘material potentially relevant to the October Surprise allegations’ including a ‘cable from the Madrid embassy indicating that Bill Casey was in town, for purposes unknown.’ For Leninist morality promoters, ‘morality is pursued in the pursuit of the free market’; and an official, fully-funded biographer might write of ‘Bill Casey and His Visits to Paris and Madrid’: ‘It should probably be mentioned that the Iranians would barely have known whom Casey was, except that he was Reagan’s campaign chairman who was apparently supportive of the Iranian economic recovery plan’ (Chapter 6, below). In 1965, the Institute named after Alberto Pollio (1852–1914), Chief of Staff of the Italian army (1908–1914), organized the conference which marked the ideological birth of the post-war ‘strategy of tension’—a series of terrorist attacks designed to shift the political centre of gravity to the right (Teacher 2018a, b; Ravelli and Bull 2018). According to Hülsmann (2007, 1022–1023): ‘With one exception, the new editions’ of Human Action (Mises 1963, 1966) ‘did not feature any major changes or elaborations. The exception concerned the definition of freedom.’ In Human Action, Mises (1963, 282; 1966, 282) lobbied for the Warfare State: ‘He who in our age opposes armaments and conscription is, perhaps unbeknown to himself, an abettor of those aiming at the enslavement of all.’ Robert J. Smith described the martyrdom associated with ‘studying’ under Mises at NYU: ‘It was a total nightmare. In two years, it went from bad to worse—from having to take accounting to about to be sent off to Vietnam, all because I wanted to study under Mises’ (cited by Doherty 2007). When Hoppe (2014 [1995]) ‘stumbled on Mises’s

2  The Economic Consequences of Blind Faith     49

Human Action … From that point on, I was a Misesian.’ When asked about the Scholar’s Edition of Mises’ Human Action, Hoppe replied: ‘We’re in the research stages right now … Working with other Mises Institute scholars, I’m detailing the differences’ between the various ­editions and ‘evaluating their significance.’ According to Hoppe (2014 [1995]), the ‘democratic state becomes, for Mises, a voluntary organization … In a sense you can say that Mises was a near anarchist.’ When the Austrian Economic Newsletter replied that ‘The strongest evidence against Mises as a radical anti-statist is the passage in Human Action that endorses conscription,’ Hoppe replied: ‘This passage is very peculiar … It comes out of the blue, and has no foundation in his overall thinking. To me, this addition appears completely ad hoc … If you read the 1949 edition of Human Action, there is nothing at all that would seem to lead to these particular funny conclusions.’ Referring to alternatives to Pareto optimality, Hoppe asserted: the ‘entire project is built on fallacy’; and in The Scholars’ Edition of Human Action (1998), Mises’ lobbying for the Warfare State was ­rectified through silent deletion. At CHOPE, Montes explained that he and Caldwell ‘want to write the real and definitive story about Hayek’s visits to Chile’9; the summary of their English-language paper states: ‘Drawing on archival material, interviews and past research, we provide a full [emphasis added] account of this controversial episode in Hayek’s life’ (Caldwell and Montes 2014a, preface; 2014b, abstract; 2015a, abstract). According to Caldwell’s website, a ‘Spanish language version has appeared’ as ‘Friedrich Hayek y Sus Dos Visitas a Chile,’ in Estudios Públicos. This journal is published by Centro de Estudios Públicos (Center of Public Studies, CEP): on his second trip to Chile, Hayek was ‘hosted’ by CEP, a ‘newly formed organization.’ According to Jorge Cauas, ‘Hayek understood the importance of CEP for the future of Chile, [and] accepted the invitation to become its Honorary President’ (Caldwell and Montes 2014a, 36; 2014b; 2015a, 291). But in the Estudios Públicos, Caldwell and Montes (2015b, Resumen ) offer—not a ‘full’ account, ­just—‘cuenta,’ an account.10 Why? CEP’s chairman is the billionaire Eliodoro Matte Larraín, president of the Chilean forestry and paper company, Compañía Manufacturera de

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Papeles y Cartones (CMPC), which he inherited from his father. In addition to Columbia and Mexico, CMPC operates in the countries that had formed Operation Condor: Chile, Argentina, Brazil, Peru, Ecuador and Uruguay. CEP’s President is Harald Ricardo Beyer Burgos, who had been Chilean Minister of Education (2011–2013) until he was impeached for failing to address the illegal issue of for-profit activity in universities. Montes ‘has been a member of CEP’s Council since 2005’ (Caldwell and Montes 2014a, 2, n. 5; 2014b; 2015a, 262, n. 5; 2015b, 87). For their CEP audience, Caldwell and Montes (2015b, 87) eliminated all reference to Mises’ promotion of political ‘Fascism’; and also rectified Hayek’s severe mental illness: ‘It has even been suggested that he suffered depression (Kresge and Wenar 1994, 130–131).’11 The ‘suggestion’—which was not a suggestion—came not from Stephen Kresge and Leif Wenar but from Hayek (1994, 130–131) who in Hayek on Hayek (the supplementary volume to The Collected Works of F. A. Hayek ), referred to his ‘depression’: the Hayek Archives—which Caldwell seeks to monopolize—provides more details. In Zurich in 1919–1920, Hayek (1994, 64) worked in the laboratory of the brain anatomist, Constantin von Monakow, ‘tracing fiber bundles through the different parts of the human brain.’ von Monakow and S. Kitabayashi (1919) had just published ‘Schizophrenie und Plexus chorioidei’ in Schweizer Archiv für Neurologie und Psychiatrie (Swiss Archives of Neurology and Psychiatry—a journal von Monakow had founded in 1917). Hayek’s mental illness manifested itself in obsessive self-interest and extreme mood swings: he was being ‘looked after by a psychiatrist and a neurologist’ (Cubitt 2006, 168). Hayek (1978) explained that ‘it would sound so frightfully egotistic in speaking about myself–why I feel I think in a different manner. But then, of course, I found a good many instances of this in real life.’12 In 1991, he told his second wife to put him–not in a nursing home–but into a lunatic asylum, yet their doctor said he was in perfect physical shape. His hallucinatory experiences exhausted him … Sometimes he would see things in vivid shapes, green meadows, writing on the wall, and even perceived sounds. No matter how strongly Mrs. Hayek would deny the

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reality of these apparitions he would insist that he had seen and heard them. On one such occasion he was so distressed because she would not believe him that he clutched my hand and said that the presence of persons and their singing had lasted for nine hours. (Cubitt 2006, 355–356)

After his second prolonged bout of suicidal depression (1969–1974), Hayek always carried a razor blade with which to slash his wrist; he wanted to know ‘where “the poison”, that is arsenic, could be obtained.’ During his third bout (1985–), the second Mrs. Hayek instructed Cubitt (2006, 89, 111, 168, 174, 188, 284, 317, 328) not to let her husband near the parapet of their balcony. When asked ‘What did Hayek think about subject x?’ his fellow Austrian-LSE economist (1933–1948), Ludwig Lachmann (1906–1990), would routinely reply: ‘Which Hayek?’ (cited by Caldwell 2006, 112). Cubitt noted that Hayek became ‘upset’ after reading an article on schizophrenia, and ‘wondered whether he thought it was referring to himself or Mrs. Hayek.’ The 1974 Nobel Prize exacerbated this personality split: Walter Grinder detected ‘almost two different people’ (Ebenstein 2003, 264). Hayek (13 March 1974; 17 May 1974) told IHS’s George Pearson that his poor health had left him of ‘little use’ for the 1974 revivalist meeting; but shortly after the Nobel Prize, he informed the IHS that he would come to the US so long as he and his wife could fly first class and have two cars hired for them. The IHS (15 October 1974) increased their honorarium from $1000 to $5000; and Hayek, characteristically, asked about the optimal tax-avoidance strategy—he later faced prosecution for tax-evasion (Cubitt 2006, 288).13 In their ‘definitive’ account, Caldwell and Montes (2014a, 15; 2014b; 2015a, 273) stated that ‘For a variety of reasons,’ Hayek ‘was unhappy, perhaps even depressed in Salzburg, and in any event he did not get much work done. But in early 1974 the depression lifted and he returned to full working capacity.’ Writing in Salzburg in March 1972, Hayek (1994, 130–131) referred not only to his ‘depression’— from which he had been ‘suffering for almost two years’—but also to an earlier ‘severe depression which lasted exactly a year’ (1960–1961). In her non-donor-funded biography, Cubitt (2006) documented Hayek’s post-1985 suicidal depression; and in his non-donor-funded biography,

52     R. Leeson

Alan Ebenstein (2003, 253) reported that in Salzburg (1969–1974), Hayek was ‘very open’ about his depression and his ‘antidepressant medication’—why are Caldwell and Montes so closed about it? At GMU, ‘Masonomics’ is presented as neither politically ‘left’ nor ‘right.’ Rather, it is founded in principles that stress the value of free markets in promoting peace and prosperity.14

Would any educational institution knowingly employ a product of the Hayek-Koch-Fink assembly line (Chapter 7, below)? According to GMU’s ‘Masonomics’ website: ‘Our doctoral students continue to receive offers [emphasis added] to join our nation’s leading universities such as Harvard University, University of Wisconsin, Brown University, Stanford University, University of California Berkeley, Purchase College, Hillsdale College, Weber State University, Middlebury College, Emory University—among many others.’15 Viennese ‘students of civilization’ praised ‘Fascists’ for having ‘saved European civilization’ (Mises 1985 [1927], 51) and defended the ‘civilization’ of apartheid from the American ‘fashion’ of ‘human rights’ (Hayek 1978).16 But according to Boettke, Erwin Dekker’s (2016a) The Viennese Students of Civilization The Meaning and Context of Austrian Economics Reconsidered is a ‘brilliant exploration of the historical, scientific, philosophical and cultural context of the Austrian School of economics … Any reader fascinated by intellectual history and the play between idealizations and circumstances will find Dekker’s approach very illuminating.’17 Boettke declined to report that Dekker is a GMU ‘post-doctoral fellow for the F. A. Hayek Programme for Advanced Study in Philosophy, Politics and Economics.’18 Dekker (2016a, 12) summarized Hayek, Mises et al.: ‘we bear certain responsibilities to that civilization. In this book, I will show how, when their civilization is under attack, these scholars attempt to defend their civilization, or at least to act as its custodians. They attempt to insulate it from the overconfident rationalism they associate with socialism and later against the threats of fascism and irrationalism.’ Ignoring the multitude of links between these Austrian ‘scholars’ and fascism, Dekker (2016b) unintentionally reported that Hayek promoted irrationalism:

2  The Economic Consequences of Blind Faith     53

‘Hayek adds the strain of accepting traditions and customs which we do not fully understand (including the traditions and customs of the ­market)’—adding that civilization is a cultural achievement in need of cultivation and at times protection … their contributions is much broader than economics in any narrow sense. That concern is the study, cultivation and, when necessary, protection of their civilization. These intellectuals fight the fatalism and the acceptance of decline, and instead start to act as custodians or defenders of civilization.

Mises took ‘great care’ to ‘destroy any evidence—from receipts to love letters—anything that could have been useful to potential opponents.’ In March 1938, Hitler’s agents took his ‘private records’ to Moscow (Hülsmann 2007, xiii). Margit Mises (1984, 43–44) reflected that there was ‘one thing’ about Mises that she ‘never understood and still don’t understand … It was as if he had put the past in a trunk, stored it in the attic and thrown away the key … His silence about the past remains in my mind like a crossword puzzle that one cannot solve because one needed letter is missing.’ When the ‘trunk’ of his Soviet-stolen belongings was opened, his membership cards (282632 and 406183) of the ‘Fatherland Front’ Austro-Fascist party and the official Fascist social club were discovered (Hülsmann 2007, 677, n. 149). Mises was also the quasi-official theoretician of the Austro-German business sector—many of whom funded the Nazis (Leeson 2018). Caldwell (2010) insists that non-Austrians ‘could perhaps learn something from [Hayek]: a little Austrian politesse is a nice prophylactic against stridency.’ Koether (2000) described Mises as his ‘intellectual father’; Hayek (1980, 10) described himself as a ‘sort of spiritual father of the movement’; Caldwell appears to have an emotional attachment to his Austrian ‘father’; and Boettke (2010, 59)—whose father told him ‘I was not put on this earth to praise you, but to raise you … The cream will rise to the top’—lavishes unmeasured praise on his GMU Ph.D. graduates: ‘Publications + Teacher Evaluations−Lunch Tax = Job’ (cited by Martin 2010, 133). In the privacy of the Austrian Economics Newsletter, Caldwell (1993) appeared to suggest that the about-to-be-released Collected Works of

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F. A. Hayek was not a scholarly project but would, instead, serve an ideological agenda: ‘promises to be good sources for Austrians.’ Caldwell also denigrated John Eatwell and Murray Milgate who, he asserted, had provided a ‘splendid example of egregious and studiously ­mean-spirited misrepresentation of Hayek’s views.’ ‘Anyone seriously interested in Austrian economics’ should, Caldwell insisted, subscribe to Critical Review—on whose editorial board he sits, along with Boettke and Mario Rizzo.19 Anyone seriously interested in Austrian economics should ­compare what Hayek wrote and spoke with what is—and what is not—­ republished in The Collected Works of F. A. Hayek. Two volumes were initially subtitled The Demons of Science (Hayek 1999a, b). Contemptuous of social science, Hayek (1984 [1978], 59–64) spoke the language of religion: ‘Reform of Trade Union Privileges the Price of Salvation in the 1980s.’ When asked: ‘Are you impressed, as you get older … by the unbelievable intensity with which people maintain their beliefs, and the difficulty of getting people to change their minds in the face of the most extraordinarily powerful evidence?’ Hayek (1978) replied: ‘Well, one has to be if one has preached this thing for fifty years without succeeding in persuading [laughter]’.20 His increasing ‘concern [is] to persuade the intellectuals in the hopes that ultimately they could be converted and transmit my ideas to the public at large.21 Well, what converted [emphases added] me is that the social scientists, the science specialists in the tradition of Otto Neurath, just were so extreme and so naive on economics that it was through [Neurath] that I became aware that positivism was just as misleading as the social sciences. I owe it to his extreme position that I soon recognized it wouldn’t do.’ In the tax-exempt Collected Works of F. A. Hayek (1994, 50), ‘converted’ was rectified to ‘dissuaded.’22 How many hundreds of millions of tax-exempt dollars have been funnelled to the ‘free’ market via ‘educational charities’? Caldwell picked Hamowy to edit The Definitive version of Hayek’s (2011 [1960]) The Constitution of Liberty in which the motive for writing the book—to market to dictators such as António de Oliveira Salazar—was rectified out of existence (Farrant and McPhail 2014). Caldwell also picked Ebeling to edit The Collected Works of F. A. Hayek: Hayek and the Austrian

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Economists: Correspondence and Related Documents (forthcoming). The delusional Mises believed a lot of things: for example, he ‘believed that he never received a position as a professor at the University of Vienna before or after the First World War, for which he was certainly qualified, due to his Jewish family background, as well as due to his staunchly laissez-faire, classical liberal views on social and economic policy issues at a time when socialist and nationalist ideas were on the rise’ (Ebeling 2017a). But when asked ‘Was it anti-Semitism which kept Mises from a professorship?’ Hayek (1994, 59) replied: ‘Now please be discrete about this point, because it raises very touchy problems, but it is commonly believed, and Mises himself asserted it, that he was never given a professorship because of anti-Semitism.’ However, the ‘reason why he did not get a professorship was not really anti-Semitism, but [that] he wasn’t liked by his Jewish colleagues. This is a very comic story, which I tell you with hesitation, because it’s the sort of thing you cannot prove. I’m quite certain it’s correct.’ Will Ebeling be discrete? Hamowy (2002) insisted that the anti-Semitic Hayek was ­‘pro-Semitic’; and on the Future of Freedom website, Ebeling (2017a) reported that he has ‘never sensed any underlying racism or race prejudice in those leading libertarian writers in the middle decades of the twentieth century.’ Will Ebeling rectify Hayek’s overt racism and the bogus degrees that Hayek bestowed on his academically unqualified disciples? Or the Stanford ‘post-doc’ that Boettke (2009a) bestowed on himself? Or the NYU ‘Post-Doctoral Fellowship’ that Ebeling bestowed on himself seventeen years before receiving a Ph.D. (Chapter 4, below)? A legitimate noble title requires a legitimate royal source: a fons honorum (the ‘fountainhead’ or ‘source of honor’). Hayek (1978) reflected that the Great War was a ‘great break in my recollected history.’23 It also broke the Habsburg nobility: coats of arms and titles (‘von,’ ‘Archduke,’ ‘Count’ etc.) were abolished on 3 April 1919 by the Adelsaufhebungsgesetz, the Law on the Abolition of Nobility. Violators face fines or six months jail. Republics transform ‘subjects’ into ­‘citizens’: the status of ‘German Austrian citizens,’ ‘equal before the law in all respects’ was forcibly imposed on Austrian nobles. (Gusejnova 2012, 115)

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The Hayeks had been recruited into the Habsburg intergeneration ­entitlement programme in 1789. Four years later, the Ancien Regime symbolically ‘shook’ when the former Louis XVI—renamed by his former subjects Citoyen Louis Capet (Citizen Louis Capet)—was guillotined. The ‘Great’ War between the dynasties further undermined intergenerational entitlements and ended neo-feudalism in Europe. Arthur Koestler (1950, 19) described some of the affected: ‘Those who refused to admit that they had become déclassé, who clung to the empty shell of gentility, joined the Nazis and found comfort in blaming their fate on Versailles and the Jews. Many did not even have that consolation; they lived on pointlessly, like a great black swarm of tired winter flies crawling over the dim windows of Europe, members of a class displaced by history.’ As Lawrence White (2008) unintentionally revealed, economic theory was for Hayek and Mises a respectable front behind which to promote the deflation and deepen the Great Depression that facilitated Hitler’s rise to power. In The Road to Serfdom, Hayek (1944) reinvented himself—a bogus rehabilitation completed by the 1974 Nobel Prize Selection Committee. ‘Tis the time’s plague when madmen lead the blind.’ Mises’ mental illness manifested itself in the same mood swings that Hayek exhibited. In the year he embraced ‘Fascists,’ including ‘Ludendorff and Hitler,’ Mises told Margit (1984, 24, 44, 63, 169–170): ‘I cannot live any more without you’; and in New York Very often he would say: ‘If it were not for you, I would not want to live any more.’

She interpreted Mises’ ‘attacks’ on her as ‘really a sign of depression, a hidden dissatisfaction and the sign of a great, great need for love.’ At other times, the Führer of the ‘Tribe of Mises’ saw himself as God-like, able to solo-generate perfect knowledge: he ‘specially objected’ to listening to broadcast commentators: ‘I can do my thinking alone,’ was his reaction.

In 1974, Arnold Harberger (2016) ‘accompanied [George] Shultz on his visit to Pinochet and heard him lecture about various and sundry

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things, including human rights.’ According to Boettke (2009b), ‘Hayek (Nobel 1974)’ is one of the ‘patron saints of GMU’s research programmes.’ According to its promotional website, a particular type of faith-based economics is taught at GMU: ‘Masonomics trusts that the presence of liberty and basic human rights [emphases added] will enable people to create a political-economic system characterized by economic growth, stability and rule-of-law.’24 Disneyland was designed to be a place where ‘children and their parents could enjoy a safe, clean, entertaining experience together; where parents wouldn’t be relegated to uncomfortable park benches, trying to make the time pass with a bag of peanuts.’25 Caldwell and Montes (2014a, 50; 2014b; 2015a, 304) complained that Hayekland was less comfortable: ‘We turn at last to the uncomfortable question of why Hayek chose to remain silent about the human rights abuses that took place under the junta, a question about which we can only offer conjectures.’ But conjectures are not required—the answer is contained in Hayek’s (1978) University of California Los Angeles oral history interviews plus two Caldwell-edited volumes of The Collected Works of F. A. Hayek: Contra Keynes and Cambridge (1995) and Socialism and War (1997). The fashion industry defines producer sovereignty. According to Hayek (1978), public policy emerged from competing fashions: ‘You have to persuade the intellectuals, because they are the makers of public opinion. It’s not the people who really understand things; it’s the people who pick up what is fashionable opinion. You have to make the fashionable opinion among the intellectuals before journalism and the schools and so on will spread it among the people at large.’26 Hayek defended the ‘civilization’ of apartheid from the American ‘fashion’ of ‘human right’: You see, my problem with all this is the whole role of what I commonly call the intellectuals, which I have long ago defined as the secondhand dealers in ideas. For some reason or other, they are probably more subject to waves of fashion in ideas and more influential in the American sense than they are elsewhere. Certain main concerns can spread here with an incredible speed. Take the conception of human rights. I’m not sure whether it’s an invention of the present [Carter] administration or whether it’s of

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an older date, but I suppose if you told an eighteen year old that human rights is a new discovery he wouldn’t believe it. He would have thought the United States for 200 years has been committed to human rights, which of course would be absurd. The United States discovered human rights two years ago or five years ago. Suddenly it’s the main object and leads to a degree of interference with the policy of other countries which, even if I sympathized with the general aim, I don’t think it’s in the least justified. People in South Africa have to deal with their own problems, and the idea that you can use external pressure to change people, who after all have built up a civilization of a kind, seems to me morally a very doubtful belief. But it’s a dominating belief in the United States now.27

On a promotional Constitution of Liberty tour of South Africa—which appears to have been a prelude to a planned retirement in that country (Leeson 2015, Chapter 3)—Hayek was reported as stating that he was ‘under no illusion about the threat which a Black dominated electorate could constitute in the future.’ Moreover, Hayek was ‘sympathetic to those who seek (like our Progressives) to protect the White minority through constitutional entrenchments (following an extension of the franchise to non-Whites)’ (Hutt 1961). Interference with the ‘policy of other countries’ was not ‘in the least justified’ when Hayek disapproved of the specifics of the interference— but did Hayek object to the American intervention that overthrew Chile’s democratically-elected government (1970–1973)? William Hutt (1961) reported that he could refer with some confidence to the bearing of Hayek’s philosophy on the problems of this country because, in lectures at Cape Town and Stellenbosch, he himself showed its relevance with the greatest clarity. He does not believe that a country which is as racially complex as ours can be ruled democratically unless the sphere of the state can somehow be effectively limited.

In The Constitution of Liberty, Hayek (2011 [1960], 186) stated that ‘To do the bidding of others is for the employed the condition of achieving his purpose.’ Hutt (1961)—noting that ‘our Africans, Asiatics and Coloureds’ were ‘economically subservient’—also stated that

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Hayek’s recommendations rely on free markets, which is colour blind (as well as race blind, sex blind, and class blind). When one buys a commodity, one does not ask, ‘What is the colour of the maker?’ One asks, ‘Is it good value for money?’

But Hayek (5 March 1975) did not want non-whites to touch his money—telling Neil McLeod at the Liberty Fund that he wished to find an alternative to his ‘gone negro’ Chicago bank.28 Had Mises and Hayek been genuine classical liberals they would have objected to human rights abuses; had they been White Terror promoters masquerading as scholars, they would have been indifferent. Like Hayek, Mises (1985 [1927], 49, 54, 154) was indifferent: although in Soviet Russia, ‘every free expression of opinion is suppressed,’ this ‘land of the knout and the prison-camp no longer poses a threat to the world today. With all their will to war and destruction, the Russians are no longer capable seriously of imperilling the peace of Europe. One may therefore safely let them alone.’ The President of the Mises Institute (a ‘long-time advisor’ and former ‘chief of staff to Congressman Ron Paul’) states that ‘democracy is a sham that should be opposed by all liberty-loving people’ (Deist 2017). At the 35th anniversary of the founding of the Mises Institute, the monarchy-promoting Hoppe (2017) explained why the ‘free’ market is inconsistent with ‘Human rights’: Murray [Rothbard] demolished all this allegedly ‘humanitarian’ or, to use a German term, this ‘Gutmenschen’ talk as intellectual rubbish in demonstrating that none of these supposed ‘rights’ were compatible with private property rights. And that, as libertarians above all people should know, only private property rights, i.e., the right of every person in the ownership of his physical body and the ownership of all external objects justly (peacefully) acquired by him, can be argumentatively defended as universal and com-possible human rights. Everything except private property rights, then, Murray demonstrated again and again, are phony, non-universalizable rights. Every call for ‘human rights’ other than private property rights is ultimately motivated by egalitarianism and as such ­represents a revolt against human nature.

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Between February 1917 and November 1918, the Russian Romanov, the German Hohenzollern and the Austrian Habsburg dynasties were dethroned. Based on ‘Conversations and interviews with Hayek I, Salzburg, 1971–1977. Tapes in my possession (my translation),’ Leube (2003, 12, n. 1, 13) reported that von Hayek, Ludwig von Mises and large numbers of fellow intellectuals became convinced advocates of the ‘Anschluss ’ to Germany. They advocated the annexation not so much for emotional reasons, rather it seemed for them the only way the little Austria could economically survive. Their society had disappeared and the new Austria was simply unable to offer the type of opportunities for leadership which Hayek and his social class had come to expect.

Hayek, Mises et al. ‘had clearly assumed that their primary tasks were attached to a vast empire’—the Habsburg’s. The Mises had been recruited into the Habsburg intergenerational entitlement programme in 1881. In Manhattan, Ludwig (1941–1973) embraced another: in ‘many ways,’ Mises was ‘still attached to the old world: he had a colour picture of the Emperor Franz Josef II hanging on the wall’ of his three bedroom rent-controlled apartment (Koether 2000, 5). In 1919, ‘von’ Mises declared that a ‘unitary German state is a political and moral necessity’ and would become the ‘starting point of a new calm and peaceful development in German affairs’ (cited by Silverman 1984, 69, 941). Three years later, he published his critique of Sozializmus (1922); in 1923, Ludendorff and Hitler staged their Putsch; and four years later, Mises (1985 [1927], 44, 50, 51) sought to provide intellectual leadership to ‘Ludendorff and Hitler’ and other ‘Fascists’: although its ‘policy has brought salvation for the moment, it is not of the kind which could promise continued success. Fascism was an emergency makeshift. To view it as something more would be a fatal error.’ What distinguished Austrian classical liberal tactics from Fascist political tactics was ‘not a difference of opinion in regard to the necessity of using armed force to resist armed attackers, but a difference in the fundamental estimation of the role of violence in a struggle

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for power.’ The ‘great danger’ threatening domestic policy from the side of Fascism lied in its ‘complete faith in the decisive power of violence.’ Mises did not dispute the necessity for violence: in order to assure ‘success, one must be imbued with the will to victory and always proceed violently. This is its highest principle.’ But he knew that civil war must follow and that the ‘ultimate victor’ would be the ‘faction strongest in number.’ Fascists must, therefore, address Mises’ question: ‘How does one obtain a majority for one’s own party? This, however, is a purely intellectual matter.’ Fascists would have to embrace classical liberalism: ‘It is a victory that can be won only with the weapons of the intellect, never by force.’ If they ‘wanted really to combat socialism,’ Fascists would ‘have to oppose it with ideas.’ Mises (1985 [1927], 50) would provide those ideas: ‘There is, however, only one idea that can be effectively opposed to socialism, viz., that of liberalism.’ Van Sickle (18 September 1930) recorded in his diary that Mises still believed that some form of Anschluss was inevitable (Leonard 2011, 93, n. 22). On 10 April 1938, almost 100% of Austrians (99.71% turnout) voted in favour of Anschluss with Germany (Rathkolb 2009, 11; Wasserstein 2007, 271; Shirer 1960, 429). The ‘Model Constitution’ that Hayek (1979, Chapter 17, 150) sent in draft form to General August Pinochet ‘would of course make all socialist measures for redistribution impossible.’ Hitler pursued a similar goal by liquidating socialists and trade unionists—as Pinochet later did. Socialists and trade unionists were shot in cold blood shortly after Pinochet seized power. Hayek (1992a [1945], 223) insisted that ‘full justice’ required that ‘legal scruples’ and ‘false humanitarianism’ be replaced by ‘shooting in cold blood’ (Chapter 10, below). In July 1945, American Affairs reproduced a slightly modified version of an April 1938 Contemporary Review of London essay in which Hayek (1997 [1938], 182) asked: ‘Are we certain that we know exactly where the danger to liberty lies? Was the rise of the fascist regimes really simply an intellectual reaction fomented by those whose privileges were abolished by social progress? … It is astounding that these fateful possibilities which suggest themselves have not yet received more attention.’

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In his Presidential Address to the Society for the Development of Austrian Economics, Steven Horwitz (2004, 308), the Schnatter Distinguished Professor of Free Enterprise, Ball State University, insisted: what Mises has provided are the ‘microfoundations’ of the extended order, or Great Society, that we see emphasized in Hayek’s work. Put somewhat differently, a ‘praxeological’ social scientist has both a Hayekian and a Misesian task: The Hayekian task is to recognize and describe the nature of the unplanned order that is to be explained, while the Misesian task is to describe the process by which intentional human action is guided such that it can produce that Hayekian order.

Hayek (1952 [1926], 555, 567) gushed about Wieser’s (1983 [1926]) The Law of Power: a fitting demonstration of the general truth [emphasis added] that a work which is carried by a great idea assumes the characteristics of a great piece of art. Having as its architect a sovereign master of science, it reaches a towering height above all indispensable detail and becomes related to artistic creation … In him the civilization of old Austria had found its most perfect expression.

Boettke (1992) gushed: ‘Both Keynesians and socialists were eventually defeated soundly by the tide of events and the truth [emphasis added] of [Hayek’s] teachings. Classical liberalism is once again a vibrant body of thought. Austrian economics has re-emerged as a major school of economic thought, and younger scholars in law, history, economics, politics and philosophy are pursuing Hayekian themes. We may mourn the loss of this great champion of liberalism, but at the same time we can rejoice that F. A. Hayek left us such a brilliant gift.’ And for the benefit of his GMU students, Boettke frequently repeats Mises’ (1985 [1927], 195) proclamation that classical ‘liberalism is applied economics’ and ‘Mises and Hayek are two sides of the same coin’ (cited by Martin 2010, 130, 137). According to Lt. Col. Ebeling (2017b), the Citadel Military College ‘is a very pleasant intellectual

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environment, especially when I add that my economist colleagues in the School of Business are all classical liberal/libertarians.’ According to Caldwell (1995, 70, n. 67), Hayek’s (1995 [1929], 68) endorsement of Mises’ ‘ruthless consistency’ in developing ‘economic liberalism to its ultimate consequences [emphasis added]’ was probably a reference to Liberalism in the Classical Tradition, in which Mises (1985 [1927], 19, 51) promoted political Fascism: The program of [Austrian] liberalism, therefore, if condensed into a single word, would have to read: property [Mises’ emphasis] … All the other demands of liberalism result from this fundamental demand … The victory of Fascism in a number of countries is only an episode in the long series of struggles over the problem of property.

Nine years later, in ‘Freedom and the Economic System,’ Hayek (1997 [1938], 181) stated: The similarity between many of the characteristics features of the ‘fascist’ and the ‘communist’ regimes become steadily more obvious.

The Nazis declined Mises’ (1985 [1927]) offer of a Fascist-Classical Liberal Pact—and in April 1938 ransacked his apartment in Vienna. Hayek (1997 [1938], 181–182) continued: ‘Nor is it an accident that in the fascist states a socialist is often regarded as a potential recruit, while the liberal of the old school is recognized as the arch-enemy.’ By April 1938, it had become clear that not only did the Nazis suppress political and intellectual freedom but were also bent on world domination. The Great Depression—which Hayek and Mises had sought to deepen—discredited the ‘free’ market and made government planning respectable. Mises (1985 [1927], 51) left an eternal instruction: ‘It cannot be denied that Fascism and similar movements aiming at the establishment of dictatorships are full of the best intentions and that their intervention has, for the moment, saved European civilization. The merit that Fascism has thereby won for itself will live on eternally in history.’ Hayek (1997 [1938], 183) did not dissent from his ‘master’s’ edict and encouraged his readers to focus not on Nazi human

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rights abuses but on ‘the problems which begin when a democracy begins to plan’: we may be witnessing one of the great tragedies in human history: more and more people being driven by their indignation about the suppression of political and intellectual freedom in some countries [Germany and Austria?] to join the forces which make its ultimate suppression inevitable. It would mean that many of the most active and sincere advocates of intellectual freedom are in effect its worst enemies and far more dangerous than its avowed opponents, because they enlist the support of those who would recoil in horror if they understood the ultimate consequences [emphasis added].

Hayek denigrated those who objected to Pinochet’s human rights abuses as a ‘bunch of leftists’ (Farrant and McPhail 2017); and those who objected to Nazi concentration camps were even more of a threat to Hayek’s ‘liberty.’ In the other half of the MPS: most Chicagoans had read The Road to Serfdom ‘without necessarily becoming religious fanatics on the subject, I think most people were on the side of that message. But what stands out in my mind is how absolutely little ideology we received in our graduate training at Chicago, and [from] Friedman most particularly. I had these two courses with Friedman. I don’t think I got even, like, maybe little whiffs of Free to Choose and Capitalism and Freedom [that Friedman would publish in 1962], but these were two sides of Friedman’s life, so to speak, that he kept quite distinct. And if we became convinced of the virtues of market economics, it was by studying the functioning of market economics rather than by becoming co-religionists, so to speak’ (Harberger 2016). There were also two sides of Hayek’s life. In The Road to Serfdom, Hayek (2007 [1944], v) protested: When a professional student of social affairs writes a political book, his first duty is plainly to say so. This is a political book … But, whatever the name, the essential point remains that all I shall have to say is derived from certain ultimate values. I hope I have adequately discharged in the book itself a second and no less important duty: to make it clear beyond

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doubt what these ultimate values are on which the whole argument depends. There is, however, one thing I would like to add to this. Though this is a political book, I am as certain as anybody can be that the beliefs set out in it are not determined by my personal interests.

And in for-posthumous-general-consumption oral history interviews, Hayek explained what these ‘ultimate values’ were: fraud. The Road to Serfdom, he explained, had been written for personal interests: to allow the ‘old aristocracy’ to resume their ascribed status and to drive the ‘new aristocracy’—labour trade unionists and elected politicians—back down the road back to serfdom (Leeson 2015, Chapter 3). Why does ‘free’ market re-feudalisation resonate so loudly in a country in which ‘Washington’ is synonymous with ‘tyranny’; and ‘liberty’ is synonymous with unrestricted access to the weapons of war and handguns which have caused more deaths in less than half-a-century (1968–2015: 1,516,863) than cumulative war-deaths since the American Revolution (1,396,733)?29 And where (according to a Yougov online poll), 29% of Americans and 43% of Republicans could imagine supporting a military coup against their own democratically-elected government (Brait 2015)?30 In a footnote to the non-Chilean version of ‘Friedrich Hayek and His Visits to Chile,’ Caldwell and Montes (2014a, 3, n. 8; 2014b n. 8; 2015a, 263, n. 8) complain about (unspecified) attempts to ‘establish links between Austrian thought and fascism’ and provide the ‘context’ for Mises’ praise of ‘Fascism’ as ‘an emergency makeshift’: he was ‘offering a comment on a pressing issue of the day.’31 Yet Liberalism in the (Austrian) Classical Tradition permanently confronts an ‘emergency’—including ‘socialized medicine’ and tax-funded education (Leeson 2018). Hayek (1978) was contemptuous of Americans: You see, I used to define what the Germans call Bildung, a general education, as familiarity with other times and places. In that sense, Americans are not very educated. They are not familiar with other times and places, and that, I think, is the basic stock of a good general education. They are much better informed on current affairs … I doubt whether the

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Americans are book readers. You see, if you go to a French provincial town, you’ll find the place full of bookstores; then you come to a big American city and can’t find a single bookstore. That suggests a very fundamental contrast.32

Some ‘free’ market bestsellers, such as Dinesh D’Souza (2017), the author of The Big Lie: Exposing the Nazi Roots of the American Left, inhabit a parallel universe: Hayek ‘asserted that fascism and Nazism emerged from the left but he never showed how this occurred.’ Hayek is the ‘starting point’ for D’Souza’s book—but ‘I go much further and delve into areas of inquiry untouched’ by him. D’Souza is almost alone among ‘free’ market promoters—he has actually been prosecuted and deprived of his liberty for his crimes. D’Souza, the President of the Protestant King’s College in New York City, was the ‘keynote’ speaker at the First Baptist North in Spartanburg, SC., and was ‘defending the faith and applying a Christian worldview’ to his life: D’Souza’s speech earned him a standing ovation and a long line at the book-signing table immediately afterward. Although D’Souza has been married for 20 years to his wife, Dixie, in South Carolina he was with a young woman, Denise Odie Joseph II, and introduced her to at least three people as his fiancée … D’Souza admitted he shared a room with his fiancée but said ‘nothing happened.’

In ‘Then: Dinesh D’Souza leaves Catholic Church. Now: He leaves wife,’ Carl Olson (2012) complained that the devout Christian had become a large target for those who advocate for ‘same-sex marriage’ and who wonder how those Christians who divorce can present themselves as defenders of the sanctity of marriage.

Hayek (1978) had a skin colour theory of honesty: ‘I don’t have many strong dislikes. I admit that as a teacher—I have no racial prejudices in general—but there were certain types, and conspicuous among them

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the Near Eastern populations, which I still dislike because they are fundamentally dishonest. And I must say dishonesty is a thing I intensely dislike. It was a type which, in my childhood in Austria, was described as Levantine, typical of the people of the eastern Mediterranean. But I encountered it later, and I have a profound dislike for the typical Indian students at the London School of Economics, which I admit are all one type–Bengali moneylender sons. They are to me a detestable type, I admit, but not with any racial feeling. I have found a little of the same amongst the Egyptians–basically a lack of honesty in them.’33 Hayek told his second wife that Shenoy ‘could not be trusted since she was only an Indian’ (Cubitt 2006, 344). In Letters to a Young Conservative, the Indian-born D’Souza (2009) defined ‘conservatism’ as ‘conserving the principles of the American Revolution’—a blend of classical liberalism and ancient virtue: ‘the belief that there are moral standards in the universe and that living up to them is the best way to have a full and happy life.’ After pleading guilty to a felony (violating federal campaign finance laws on behalf of a Republican candidate), D’Souza—a contributing editor of the Heritage Foundation’s Policy Review (1985–1987)—resumed his role as a Fox News ‘think’ tank policy ‘expert’ after serving eight months in a halfway house prison (Mahler 2014). Although seemingly incompetent to report even basic bits of evidence—for example, Herbert Marcuse was a ‘Berkeley Professor’ (he wasn’t)—D’Souza (2017) is more correct than he realizes when stating that Hayek had ‘witnessed firsthand the rise of fascism in Europe.’ Leo Rosten asked Hayek about Mises’ (1944, 94–96) description of the Wandervogel most of whom ‘had one aim only: to get a job as soon as possible with the government. Those who were not killed in the wars and revolutions are today pedantic and timid bureaucrats in the innumerable offices of the German Zwangswirtschaft. They are obedient and faithful slaves of Hitler.’ Hayek (1978) replied ‘Oh, I saw it happen; it was still quite active immediately after the war. I think it reached the highest point in the early twenties, immediately after the war. In fact, I saw it happen when my youngest brother [Erich] was full time drawn into that circle; but they were still not barbarians yet. It was rather a return to nature. Their main enjoyment was going out for walks into

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nature and living a primitive life. But it was not yet an outright revolt against civilization, as it later became.’34 Hayek (1978) was introduced to what appears to be the Wandervogel by ‘Othmar Spann, a very curious mind, an original mind, himself originally still a pupil of Menger’s. But he was a very emotional person who moved from an extreme socialist position to an extreme nationalist position and ended up as a devout Roman Catholic, always with rather fantastic philosophical ideas. He soon ceased to be interested in technical economics and was developing what he called a universalist social philosophy. But he, being a young and enthusiastic man, for a very short time had a constant influence on all these young people. Well, he was resorting to taking us to a midsummer celebration up in the woods, where we jumped over fires and—It’s so funny [laughter], but it didn’t last long, because we soon discovered that he really didn’t have anything to tell us about economics.’35 Spann—the dominant influence over Hayek at the University of Vienna (Leeson 2017)—was ‘The Philosopher of Fascism’ (Polanyi 1934). Hayek told Cubitt (2006, 17, 51) that his own mother had been ‘converted to Nazism by a woman friend’; Hitler’s success was due to his appeal to women, ‘citing his mother as another example.’ To ‘his certain knowledge,’ Nazism ‘had been actively upheld [in Austria] long before it had reached Germany.’ Hayek’s childhood friend, J. Herbert Fürth (20 April 1984), informed Gottfried Haberler that Hayek’s family ‘adhered to Nazism long before there was an Adolf Hitler.’36 Fürth (23 March 1992) also told Paul Samuelson that Hayek’s father was the president of a ‘highly nationalistic society of “German physicians” who competed with the politically neutral general Medical Association.’37 According to Hayek (1978), the ‘idea’ for The Road to Serfdom came from Alexis de Tocqueville, who speaks about the road to servitude; I would like to have chosen that title, but it doesn’t sound good. So I changed ‘servitude’ into ‘serfdom,’ for merely phonetic reasons.38

Aspects of neo-feudalism lingered-on in post-slavery America: virtual indentured servitude in company towns (into the 1920s) and in

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agriculture (sharecropping, into the 1940s); child labour (until the 1938 Fair Labor Standards Act); plus the post-Reconstruction disenfranchisement of African-Americans (until the 1965 Voting Rights Act). The history of the New World has been shaped by the trauma of the slave trade. Hayek was able to lord-it-over the socially deferential in a manner in which his middle-class children could not. In Law, Legislation and Liberty, Volume 2: The Mirage of Social Justice, Hayek (1976, 189, n. 25) explained that in 1940, he was offered the opportunity of sending his children to relative safety: this obliged him to consider the ‘relative attractiveness of social orders as different as those of the USA, Argentina and Sweden.’ For himself, with a developed (aristocratic) personality, ‘formed skills and tastes, a certain reputation and with affiliations with classes of particular inclinations,’ the Old World was optimal; but ‘for the sake of my children who still had to develop their personalities, then, I felt that the very absence in the USA of sharp social distinctions which would favour me in the Old World should make me decide for them in the former. (I should perhaps add that this was based on the tacit assumption that my children would there be based with a white not with a coloured family).’ American foreign policy—brewed-up in Washington ‘think’ tanks— fuelled the revival of theocrat Islam. In the 1970s, this phenomenon became increasingly threatening alongside the rise of the Religious Right in America—parts of which, such as Presuppositionalism, were also theocratic. In Iraq and elsewhere, Iran has been the major beneficiary. At GMU, Boettke supervised a Ph.D. dissertation with a conclusion (seemingly negotiated before the research had begun) apparently derived from the mantra that led America to invade Iraq in search of non-existent weapons of mass destruction: ‘freedom works, baby, freedom works’ (Leeson 2018). Externalities require that full-cost pricing be imposed on producers—including ‘knowledge’ producers. For Americans, Operation Iraqi Freedom cost 4424 deaths and 31,952 wounded; for Iraqis, tens if not hundreds of thousands fell in both categories. The post-invasion chief executive officer, J. Paul Bremer, and Secretary of Defense, Donald Rumsfeld, are conventionally blamed for the initial disaster—but what blame should be attached to ‘free’ market ‘Professors’ employed by the US military who inculcate their cadets

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with crude stereotypes about Iraqis and other non-whites? To edit one of the volumes of The Collected Works of F. A. Hayek, Caldwell chose someone who commented on Hayek’s (1978) ‘I must say’ skin colour theory of honesty: But I must say, I understand what Hayek is saying. Many years ago I taught for two years in […]. I had a much older student originally from Iraq, who had, himself, taught mathematics for awhile in Libya. He happened to live not far from where I was staying outside […], and he invited me for a drink one evening. We had a couple of pints, and chatted for a few hours (he did have some interesting stories of life in Iraq under Saddam). At the end of the school year, when he discovered that he had earned a passing but relatively low grade, he came to see me in my office, and asked, how I could give him such a grade? After all, hadn’t he bought me a drink? Were we not, now, ‘friends’? I came to notice this attitude frequently among a number of the Middle Eastern students; that establishing ‘friendships’ was supposedly the way to (I don’t want to say, ‘buy’) ‘influence’ their situation in life.

Chinese were cheats: there is ‘statistically significant’ degree of attempted group cheating among many of them. My step-daughter, who earned her graduate […] degree from […], told me she observed the same thing when she studied there.

This military ‘Professor,’ who had devoted his career to deifying Mises and Rothbard (1993; 1994c, 5)—who spotted buildings for Al-Qaeda to bomb and promoted the corrupt ‘spoils system’—continued: Now, of course, we all know the phrase, ‘It’s not what you know, but who you know.’ And, obviously, that is an element of life everywhere. But I discovered that it is far stronger and pervasive in some cultures compared to others. Those, like Hayek, who had grown up and then still worked in societies in which rule of law, ‘fair play,’ ‘honesty is its own reward,’ a sense of individual responsibility, etc., meant something would be shocked and

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bothered when they came into contact with people from cultures and institutional orders in which the ‘rules of the game’ were viewed as being very different. By the way, any such accusation that Hayek was racist is totally misplaced, just as was the accusation a few years ago that he was antisemitic (in an article in HOPE that tried to link Hayek with the presumed antisemitism of Schumpeter and Keynes).39

‘Free’ market Truth consists of assertions made by sovereign producers. But what are the sensory capacities of someone who ‘Never sensed any underlying racism or race prejudice in those leading libertarian writers in the middle decades of the twentieth century’ (Ebeling 2017a)? The 1964 Civil Rights Act and 1965 Voting Rights Act enraged and energized ‘free’ market promoters: ‘Everyone, both proponents and opponents, knew exactly what that law was: a statist, centralizing measure that fundamentally attacked the rights of property and empowered the state as mind reader: to judge not only our actions, but our motives, and to criminalize them. The good folks who resisted the civil rights juggernaut were not necessarily ideologically driven. Mostly they resented horrible intrusions into their communities, the media smears and the attacks on their fundamental freedoms that civil rights represented’ (Rockwell 2010, 289). Rockwell’s co-founder of the Ludwig von Mises Institute defended the Klu Klux Klan assassin of the voting rights activist, Medgar Evers, because he had been convicted of being ‘politically ‘incorrect’ (Rothbard 1994a). Along with Rockwell (a devout Roman Catholic) and North (a public stoning theocrats), Rothbard is believed to be the co-author of the intensely racist and homophobic Ron Paul Newsletters (Leeson 2017). Rothbard was the first person Raico (2013) had met who defended a ‘fully voluntary society — nudge, nudge.’ Austrians appear to be re-fighting the issues of the 1960s (re-segregating lunch counters etc.). According to Hoppe (2014 [1995]), ‘Every person has the right to determine who does and does not eat dinner in his own home. Similarly, every business owner has the right to determine who does and does not eat dinner in his restaurant … if we believe in property rights, he should have the right of exclusion on any grounds. From the point

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of view of the state, it is easier to start the attack on property by taking away the right of exclusion from commercial properties. Then the state can gradually invade the last bastion of undisputed private property, the family household.’ Hoppe (2014 [1995]) related his concerns to the defining-fear of taxfunded Austrian—taxation: ‘But of course, there can be no society without structures of authority. In the family, there is always a hierarchy. In communities, there are always leaders. In firms, there are always managers. But in a market, none of these authorities have taxing power. Their rule depends entirely on voluntary consent and contact. But the state attempts to break down these competitive centres of authorities and establish a single authority overriding all others. If you don’t comply, the state cracks down.’ At the 1993 Brazilian MPS session on ‘Nations by Consent,’ Rothbard (1994b, 7, 9, 10) promoted secession: Under total privatization, many local conflicts and ‘externality’ problems - not merely the immigration problem - would be neatly settled. With every locale and neighborhood owned by private firms, corporations, or contractual communities, true diversity would reign, in accordance with the preferences of each community.40

This would allow seceded States to be run a ‘small, self-perpetuating oligarchy of the ablest and most interested’: It is also important to rethink the entire concept and function of voting. Should anyone have a ‘right’ to vote? Rose Wilder Lane, the mid-twentieth century U.S. libertarian theorist, was once asked if she believed in womens’ suffrage. ‘No,’ she replied, ‘and I’m against male suffrage as well.’

Fund covered the Munich MPS meeting in The Wall Street Journal (‘Marx is Dead, Bureaucracy Thrives’) which he faxed to Bridgett Wagner at the Heritage Foundation.41 An anonymous ‘Review and Outlook’ Wall Street Journal piece on ‘The Free Marketeers’ (6 September 1990) cited Martino’s MPS Presidential address which referred to James Buchanan’s promotion of the religion of the ‘free’ market:

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The loss of faith in politics, in socialism broadly defined, has not … been accompanied by any demonstrable reconversion to faith in markets.

Market societies are organized around two market failures. Technologyfuelled productivity is the key to economic growth—yet technology is a quasi-public good (non-excludable and non-rival in consumption): governments can turn it into a private good through patents. Credit crunches are public ‘bads’ (largely non-escapable and non-rival in consumption)—and banks are ‘chicken-hawk’ ‘free’ market promoters.42

2 The Economic Consequences of Euphoria Banks funded both the 1928–1929 Wall Street bubble and the 2001–2005 American housing bubble—both of which led to the near-collapse of the American banking system. The 1933 Glass ­ Steagall Act (which separated deposit-taking commercial banking from speculative ‘investment’ banking) provided the former with a constrained privilege—in return for which they are supposed to assess and bear risk as they turn a leakage from the expenditure stream (savings) into expenditure by deficit agents (consumers or preferably form a productivity perspective, investors). One unresolved structural issue is the associated privilege of running away from this societal function (by creating credit crunches and recessions) and hoarding these deposits in non-expenditure shelters (secondhand bonds and excess reserves). In 1999, the Glass Steagall Act was repealed (the Gramm–Leach–Bliley Act). Hayek- and Mises-inspired deregulation began shortly after the 1974 Nobel Prize: some was socially optimal; the deregulation of the financial sector was not. In signing the 1982 Garn-St. Germain Depository Institutions Act, President Reagan declared: ‘This bill is the most important legislation for financial institutions in the last 50 years. It provides a long-term solution for troubled thrift institutions. … All in all, I think we hit the jackpot.’ The deregulation of the Savings and Loans set the industry ‘free’ to gamble: between 1986 and 1995, 1043 S&Ls failed costing the taxpayer $130 billion.

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In 1984, Charles Keating bought Lincoln Savings and Loan (Irvine, CA) and began redirecting deposits into real estate ventures, stocks, junk bonds and other high-yield instruments, whilst siphoning-off, according to prosecutors, $34 million for himself and his family— in addition to $1.3 million for political contributions. According to a Lincoln internal memo, bond salesmen were advised to remember that ‘the weak, meek and ignorant are always good targets.’ And when the FBI and the Securities and Exchange Commission (SEC) began investigating Lincoln Savings and Loans, Keating hired MPS member Greenspan (soon to be Chairman of the Federal Reserve), who compiled a report praising a ‘seasoned and expert’ management—Lincoln’s depositors faced ‘no foreseeable risk.’ Keating enlisted five United States Senators who had been recipients of his campaign largesse (the Keating Five) to pressure the Federal Home Loan Bank Board (later, the Office of Thrift Supervision) to end its investigation. All five met with regulators; and Edwin J. Gray, then the Board chairman, complained that four of the senators ‘came to me like lawyers arguing for a client.’ Gray resisted the pressure (which included a job offer from Keating) and was replaced by a Chairman more sympathetic to Keating. When asked whether his payments to politicians had produced the desired results, Keating told reporters, ‘I want to say in the most forceful way I can: I certainly hope so’ (McFadden 2014; Granelli 1993). What are Charles and David Koch’s desired results? Or the Chilean Centro de Estudios Públicos of which Hayek was Honorary President? Or the tobacco industry’s? Hoppe (2014 [1995]) explained why ‘free’ market promoters favour dynasties and oppose democracies: ‘Under democracy, you can change law whenever you want. No one knows what the laws will be tomorrow. In fact, hardly anyone knows what the laws are today, because there are so many. In this way, democracy undermines the value of property and undercuts long-term planning and decision making. People become engaged in shorter production processes than they otherwise would.’ For ‘free’ market promoters, the unstable neo-feudal century (with slavery and serfdom) was Disneyland (or rather Misesland): ‘In the nineteenth century, you had for the first time a worldwide economic order. You had free trade, free movement of people, free movement of

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capital, a gold standard, falling prices in the latter part of the century, peaceful development and no major wars between 1815 and 1914. The world’s armies and navies did not know what to do. Yes, there were aberrations like the American Civil War and the Franco-Prussian War, but mostly it was a period of peace. Forty million people moved peacefully because they wanted a better life. There were no expulsions, no wars, no genocides, nothing’ (Shenoy 2003, 4). Hoppe (2014 [1995]) also expressed standard ‘free’ market nostalgia: in ‘the old days’ the principles of law never changed over time. The rules of property, exchange, and contract were always the same. Kings did little to change this because their own claim to sovereign rule was also tied to property rights. They wanted to be the owner of the entire realm and to preserve its capital value.

In ‘Market Holds Key to Conservation,’ one of Rothbard’s ‘we want externalities’ chanters (Chapter 1, above) explained to readers of World Money that Noblemen owned the estates over which they hunted and therefore suffered capital losses if they failed to preserve their game … If conservationist wish to see wildlife preserved, the most effective method would be to make it possible for their capital value to be priced on a market. (Shenoy 1978)

Shenoy was marketing unexamined ‘free’ market Truth. According to Rothbard (2010 [1958], 259), Anthony Scott’s (1955) Natural Resources: The Economics of Conservation ‘deserves the warmest praise. Here is a great book on conservation, theoretical and yet covering the crucial factual details for each important country and natural resource. Here is a definitive blast, at long last, at the conservation hokum. Scott shows [emphasis added] that there need be no worries on the free market, about excess depletion, because any resource will be preserved so that its capital value will be taken into consideration, and this will be the capitalized value of expected future returns. Nobody ravages a forest if he also owns that forest and is interested in its capital value.’

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The originate-to-distribute banking model abandons risk-assessment and shifts risk to those who purchase credit-rated securitized mortgages. Non-‘free’-market neoclassical theory identifies potential incentive incompatibilities between: • owners (principals or shareholders); • managers (agents); • credit ratings agencies; • commission-earners (the sellers of securitized mortgages); and • regulators (many of whom will become employed by the banks they ‘regulate’). The ‘free’ market is defined by the objection to employees pursuing their own perceived self-interest at the (possible) expense of their employers. To his credit, Greenspan later issued a mea culpa with respect to his faith in the ‘free’ market: ‘Those of us who have looked to the self-interest of lending institutions to protect shareholders’ equity, myself included, are in a state of shocked disbelief.’ When asked ‘Do you feel that your ideology pushed you to make decisions that you wish you had not made?’ Greenspan replied: ‘Yes, I’ve found a flaw. I don’t know how significant or permanent it is. But I’ve been very distressed by that fact’ (cited by Andrews 2008).

Notes 1. https://history.fee.org/publications/the-austrian-schools-advicehands-off/. 2. http://www.sdaeonline.org/sdae-officers/. 3. http://historyofeconomics.org/wp-content/uploads/2016/08/DF_ Hayek.pdf. 4. ‘Businessmen have always been anxious to convince a gullible public and an opportunistic Congress that the free market cannot work efficiently in their industry, that some governmental planning and regulations would be in the “public interest.” Indeed, much of the government regulation which plagues us today has come only after

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businesses have begged and lobbied for it. Nearly every major piece of interventionist legislation since 1887 has been supported by important segments of the business community [Koch’s emphases].’ 5. MPS Archives Box 46.1. 6. http://public.econ.duke.edu/~bjc18/Caldwell_Vita2010-2016.pdf. Accessed 22 October 2017. 7. http://historyofeconomics.org/awards-and-honors/best-article-prize/. 8. http://public.econ.duke.edu/~bjc18/Caldwell_Vita2010-2016.pdf. Accessed 22 October 2017. 9. http://hope.econ.duke.edu/node/979. Accessed 22 October 2017. 10. ‘Este artículo, basado en archivos, periódicos, revistas, entrevistas y publicaciones recientes, da cuenta de las circunstancias.’ 11. ‘Incluso se ha sugerido que sufrió una depresión (Kresge y Wenar 1994, 130–131).’ 12. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 13. IHS Archives Box 11. 14. https://economics.gmu.edu/about-the-department/about. Accessed 22 October 2017. 15. https://economics.gmu.edu/about-the-department/about. Accessed 22 October 2017. 16. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 17. http://www.cambridge.org/us/academic/subjects/economics/history-economic-thought-and-methodology/viennese-students-civilization-meaning-and-context-austrian-economics-reconsidered?format=HB#GgXAztLAXLthx6dB.97. 18. https://fee.org/people/erwin-dekker/. 19. http://www.tandfonline.com/action/journalInformation?show= editorialBoard&journalCode=rcri20. 20. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 21. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/).

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22. ‘What dissuaded me is that the social sciences, the science specialists in the tradition of Otto Neurath, just were so extreme and so naïve on economics; it was actually through them that I became aware that positivism was just misleading in the social sciences. I owe it to Neurath’s extreme position that I soon recognized it wouldn’t do.’ 23. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 24. https://economics.gmu.edu/about-the-department/about. Accessed 22 October 2017. 25. https://web.archive.org/web/20060518072723/http://disney.go.com/disneyatoz/familymuseum/exhibits/articles/dreamingdisneyland/index.html. 26. Friedrich Hayek, interviewed by Thomas Hazlett 12 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 27. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 28. Hayek Archives Box 34.17. 29. http://www.politifact.com/punditfact/statements/2015/aug/27/ nicholas-kristof/more-americans-killed-guns-1968-all-wars-says-colu/. 30. It’s not clear whether this online poll has avoided selection bias. Even if it has: further polls are required before such figures can be considered reliable. 31. This was deleted from the Chilean version of their essay (2015b). 32. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 33. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 34. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 35. Friedrich Hayek, interviewed by Earlene Craver date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 36. Fürth Papers. Hoover Institution. Box 5.

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7. Fürth Papers. Hoover Institution. Box 6. 3 38. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 39. Email to Leeson (29 August 2010). 40. MPS Archives Box 103. 41. MPS Archives Box 92. 42. ‘Chicken-hawks’ promote war whilst personally avoiding military service.

References Archival Insights into the Evolution of Economics (and Related Projects) Farrant, A., & McPhail, E. (2017). Hayek, Thatcher, and the Muddle of the Middle. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part IX: The Divine Right of the ‘Free’ Market. Basingstoke: Palgrave Macmillan. Filip, B. (2018). Hayek and Popper on Piecemeal Engineering and OrdoLiberalism. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part XIV: Orwell, Popper, Polanyi and Humboldt. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2015). Hayek: A Collaborative Biography Part II Austria, America and the Rise of Hitler, 1899–1933. Basingstoke: Palgrave Macmillan. Leeson, R. (2017). Hayek: A Collaborative Biography Part VII ‘Market Free Play with an Audience’: Hayek’s Encounters with Fifty Knowledge Communities. Basingstoke: Palgrave Macmillan. Leeson, R. (2018). Hayek: A Collaborative Biography Part VIII the Constitution of Liberty: ‘Shooting in Cold Blood’ Hayek’s Plan for the Future of Democracy. Basingstoke: Palgrave Macmillan. Teacher, D. (2018a). ‘Neutral Academic Data’ and the International Right (1). In R. Leeson (Ed.), Hayek: A Collaborative Biography Part XI Liberalism in the (Austrian) Classical Tradition. Basingstoke: Palgrave Macmillan. Teacher, D. (2018b). ‘Neutral Academic Data’ and the International Right (2). In R. Leeson (Ed.), Hayek: A Collaborative Biography Part XI Liberalism in the (Austrian) Classical Tradition. Basingstoke: Palgrave Macmillan.

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Ravelli, G., & Bull, A. (2018). The Pinochet Regime and the Transnationalization of Italian Neo-fascism. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part XI Liberalism in the (Austrian) Classical Tradition. Basingstoke: Palgrave Macmillan.

Other References Andrews, E. L. (2008, October 23). Greenspan Concedes Error on Regulation. New York Times. http://www.nytimes.com/2008/10/24/business/economy/24panel.html. Bird, K. (2017, June 20). Some ‘October Surprise’ Conspiracies Turn Out to Be True. Los Angeles Times. http://www.latimes.com/opinion/op-ed/ la-oe-bird-conspiracies-october-surprises-20170620-story.html. Boettke, P. J. (1992, August 1). Friedrich A. Hayek (1899–1992). FEE. https:// fee.org/articles/friedrich-a-hayek-1899-1992/. Boettke, P. J. (2009a, August 4). Setting the Record Straight. Coordination Problem. http://austrianeconomists.typepad.com/weblog/2009/08/settingthe-record-straight-on-austropunkism-and-the-sociology-of-the-austrianschool-of-economics.html. Boettke, P. J. (2009b, March 11). Masonomics—Not Really!!! Coordination Problem. http://austrianeconomists.typepad.com/weblog/2009/03/masonomicsnot-really.html. Boettke, P. J. (2010). Reflections on Becoming an Austrian Economists and Libertarian, and Staying One. In W. Block (Ed.), I Chose Liberty Autobiographies of Contemporary Libertarians. Auburn, AL: Ludwig von Mises Institute. Boettke, P. J. (2014, June 7). Robert Leeson, Hayek and the Underpants Gnome. Coordination Problem. http://www.coordinationproblem.org/2014/06/robertleeson-hayek-and-the-underpants-gnomes.html. Brait, E. (2015, September 12). Poll Finds Almost a Third of Americans Would Support a Military Coup. The Guardian. https://www.theguardian. com/us-news/2015/sep/11/military-coup-some-americans-would-vote-yes. Caldwell, B. (1993). Bruce J. Caldwell. Austrian Economics Newsletter, 14(1), 12–13. https://mises.org/system/tdf/aen14_1_1_0.pdf?file=1&type=document. Caldwell, B. (1995). Editorial Notes. In Contra Keynes and Cambridge the Collected Works of F. A. Hayek (B. Caldwell, Ed.). Chicago: University of Chicago Press.

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Caldwell, B. (2006). Popper and Hayek: Who Influenced Whom? In I. C. Jarvie, K. Milford, & D. W. Miller (Eds.), Karl Popper: A Centenary Assessment Volume I (pp. 111–124). Burlington: Ashgate. Caldwell, B. (2010, September). Review of P. Mirowski and D. Phehwe (Eds.). The Road from Mont Pelerin: The Making of the Neoliberal Thought Collective. EH.NET. http://eh.net/book_reviews/the-road-from-mont-plerin-the-making-of-the-neoliberal-thought-collective/. Caldwell, B., & Montes, L. (2014a, August). Friedrich Hayek and His Visits to Chile (CHOPE Working Paper No. 2014–12). Caldwell, B., & Montes, L. (2014b, September 26). Friedrich Hayek and His Visits to Chile. Review of Austrian Economics. First online. Caldwell, B., & Montes, L. (2015a, September). Friedrich Hayek and His Visits to Chile. Review of Austrian Economics, 28(3), 261–309. Caldwell, B., & Montes, L. (2015b). Friedrich Hayek y Sus Dos Visitas a Chile. Estudios Públicos, 137(Verano), 87–132. https://www.cepchile.cl/ cep/site/artic/20160304/asocfile/20160304101209/rev137_BCaldwellLMontes.pdf. Cordato, R. E. (1989). Austrian Economics Society Formed. Austrian Economics Newsletter, 10(1), 10. https://mises.org/system/tdf/aen10_3_1_0. pdf?file=1&type=document. Cubitt, C. (2006). A Life of August von Hayek. Bedford: Authors on line. D’Souza, D. (2009). Letters to a Young Conservative. New York: Basic Books. D’Souza, D. (2017). The Big Lie: Exposing the Nazi Roots of the American Left. New York: Regnery. Deist, J. (2017, February 17). Democracy, the God That’s Failing. Mises Wire. https://mises.org/blog/democracy-god-thats-failing. Dekker, E. (2016a). The Viennese Students of Civilization The Meaning and Context of Austrian Economics Reconsidered. Cambridge: Cambridge University Press. Dekker, E. (2016b, July 31). How Viennese Culture Shaped Austrian Economics. FEE. https://fee.org/articles/how-viennese-culture-shaped-austrian-economics/. Doherty, B. (2007). Radicals for Capitalism: A Freewheeling History of the Modern. American Libertarian Movement. New York: Public Affairs. Ebeling, R. M. (2014, February 16). Exclusive Interview, Gold & Silver. Richard Ebeling on Austrian Economics, Economic Freedom and the Trends of the Future. Daily Bell. http://www.thedailybell.com/gold-silver/ anthony-wile-richard-ebeling-on-austrian-economics-economic-freedomand-the-trends-of-the-future/.

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Ebeling, R. M. (2017a, October 2). Classical Liberalism and the Problem of ‘Race’ in America. Future of Freedom Foundation. https://www.fff.org/ explore-freedom/article/classical-liberalism-problem-race-america/. Ebeling, R. M. (2017b, October 6). The Foundations of Prosperity and Freedom Interview with Richard Ebeling. The Citadel Newsroom. http:// www.citadel.edu/root/the-foundations-of-prosperity-and-freedom. Ebenstein, A. (2003). Friedrich Hayek: A Biography. Chicago: University of Chicago Press. Farrant, A., & McPhail, E. (2014). Can a Dictator Turn a Constitution into a Can-Opener? F. A. Hayek and the Alchemy of Transitional Dictatorship in Chile. Review of Political Economy, 26(3), 331–348. Glassman, J. K. (2011). Market-Based Man. Philanthropy Roundtable. http:// www.philanthropyroundtable.org/topic/excellence_in_philanthropy/ market_based_man. Goldschmidt, N., & Hesse, J-O. (2013). Eucken, Hayek, and the Road to Serfdom. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part II Influences, From Mises to Bartley. Basingstoke, England: Palgrave Macmillan. Goodwin, C. (1988). The Heterogeneity of the Economists’ Discourse: Philosopher, Priest, and Hired Gun. In A. Klamer, D. N. McCloskey, & R. M. Solow (Eds.), The Consequences of Economic Rhetoric. Cambridge: Cambridge University Press. Granelli, J. (1993, September 8). Ex-Regulator Edwin Gray, Foe of Keating, Quits Post: Banking: Troubled Miami Thrift He Headed Was Sold to Investors Without Federal Help. Los Angeles Times. http://articles.latimes. com/1993-09-08/business/fi-32955_1_miami-thrift. Gusejnova, D. (2012). Nobel Continent: German Speaking Nobles as Theorists of European Identity in the Inter-War Period. In M. Hewitson & M. D’Auria (Eds.), Europe in Crisis: Intellectuals and the European Idea, 1917–1957. New York: Berghahn. Hamowy, R. (2002). A Note on Hayek and Anti-Semitism. History of Political Economy, 34(1), 255–260. Harberger, A. C. (2016). Sense and Economics: An Oral History with Arnold Harberger. Interviews Conducted by Paul Burnett in 2015 and 2016 Oral History Center, The Bancroft Library, University of California Berkeley, CA. http://digitalassets.lib.berkeley.edu/roho/ucb/text/harberger_arnold_2016.pdf. Hayek, F. A. (1944). The Road to Serfdom. London: Routledge. Hayek, F. A. (1952 [1926]). Hayek on Wieser. In H. W. Spiegel (Ed.), The Development of Economic Thought. New York: Wiley.

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Hayek, F. A. (1974a, December 11). The Pretence of Knowledge. https://www. nobelprize.org/nobel_prizes/economic-sciences/laureates/1974/hayek-lecture.html. Hayek, F. A. (1974b, December 10). Banquet Speech. http://www.nobelprize. org/nobel_prizes/economic-sciences/laureates/1974/hayek-speech.html. Hayek, F. A. (1974c). Inflation and Unemployment. Mimeo. Hayek Archives Box 129.16. Hayek, F. A. (1975a). Face the Press. https://mises.org/library/hayek-meetspress-1975. Hayek, F. A. (1975b). A Discussion with Friedrich von Hayek. Washington, DC: American Enterprise Institute. https://www.aei.org/wp-content/ uploads/2017/03/Discussion-with-Friedrich-von-Hayek-text.pdf. Hayek, F. A. (1976). Law, Legislation and Liberty: Volume II The Mirage of Social Justice. Chicago: University of Chicago Press. Hayek, F. A. (1978). Oral History Interviews. Los Angeles: Centre for Oral History Research, University of California. http://oralhistory.library.ucla. edu/. Hayek, F. A. (1979). Law, Legislation and Liberty: Volume III The Political Order of a Free People. Chicago: University of Chicago Press. Hayek, F. A. (1980). This Month’s Interviews (The American Council Economic Report 1–11). Hayek, F. A. (1984). 1980s Unemployment and the Unions: The Distortion of Relative Prices by Monopoly in the Labour Market. Essays on the Impotent Price Structure of Britain and Monopoly in the Labour Market. London: Institute of Economic Affairs. Hayek, F. A. (1992a). In The Fortunes of Liberalism Essays on Austrian Economics and the Ideal of Freedom the Collected Works of F. A. Hayek (P. Klein, Ed.). Chicago: University of Chicago Press. Hayek, F. A. (1992b [1977], July). The Road from Serfdom. Reason. http:// reason.com/archives/1992/07/01/the-road-from-serfdom/5. Hayek, F. A. (1994). In Hayek on Hayek an Autobiographical Dialogue. Supplement to the Collected Works of F. A. Hayek (S. Kresge & L. Wenar, Eds.). Chicago: University of Chicago Press. Hayek, F. A. (1995). In Contra Keynes and Cambridge the Collected Works of F. A. Hayek (B. Caldwell, Ed.). Chicago: University of Chicago Press. Hayek, F. A. (1997). In Socialism and War: Essays, Documents, Reviews. The Collected Works of F. A. Hayek (B. Caldwell, Ed.). Indianapolis: Liberty Fund.

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Hayek, F. A. (1999a). In Good Money, Part 1. The New World the Collected Works of F. A. Hayek (S. Kresge, Ed.). London: Routledge. Hayek, F. A. (1999b). In Good Money, Part 2. The Standard the Collected Works of F. A. Hayek (S. Kresge, Ed.). London: Routledge. Hayek, F. A. (2007 [1944]). In The Road to Serfdom: The Definitive Edition. The Collected Works of F. A. Hayek (B. Caldwell, Ed.). Chicago: University of Chicago Press. Hayek, F. A. (2011 [1960]). In The Constitution of Liberty. The Definitive Edition the Collected Works of F. A. Hayek (R. Hamowy, Ed.). Chicago: University of Chicago Press. Hoppe, H-H. (2014 [1995]). The Private Property Order: An Interview with Hans-Hermann Hoppe. Austrian Economic Newsletter, 18(1). https://mises. org/library/private-property-order-interview-hans-hermann-hoppe. Hoppe, H-H. (2017, October 7). Coming of Age with Murray. Mises Institute’s 35th Anniversary Celebration in New York City. https://mises.org/library/ coming-age-murray-0. Horwitz, S. (2004). Monetary Calculation and the Unintended Extended Order: The Misesian Microfoundations of the Hayekian Great Society. The Review of Austrian Economics, 17(4), 307–321. Hülsmann, J. G. (2007). Mises: The Last Knight of Liberalism. Auburn, AL: Ludwig von Mises Institute. Hutt, W. (1961, October 12). Abuse of State Power in Multi-Racial Society. The Cape Times. Koch, C. (1978, August). The Business Community: Resisting Regulation. Libertarian Review, 7(7), 30–34. https://www.libertarianism.org/lr/LR788. pdf. Koestler, A. (1950). Arthur Koestler. In R. Crossman (Ed.), Communism: The God that Failed. New York: Harper and Row. Koether, G. (2000). A Life Among Austrians. Austrian Economics Newsletter, 20(3). https://mises.org/system/tdf/aen20_3_1_0.pdf?file=1&type=document. Lavoie, D. (1977). Austrian Economics Seminar, Part II: 1976–77. Austrian Economics Newsletter, 1(3), 6–7. Leonard, R. (2011). The Collapse of Interwar Vienna: Oskar Morgenstern’s Community, 1925–50. History of Political Economy, 43(1), 83–130. Leube, K. R. (2003). Some Remarks on Hayek’s The Sensory Order. Laissez Faire, 12–22. http://laissezfaire.ufm.edu/images/7/79/Laissezfaire18_2.pdf. MacLean, N. (2017). Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America. New York: Viking.

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Mahler, J. (2014, September 23). D’Souza Avoids Prison Time for Campaign Finance Violations. New York Times. Martin, A. (2010, September). The Analects of Boettke. Journal of Private Enterprise, 26(1), 125–141. McFadden, R. (2014, April 2). Charles Keating, 90, Key Figure in ’80s Savings and Loan Crisis, Dies. New York Times. https://www.nytimes. com/2014/04/02/business/charles-keating-key-figure-in-the-1980s-savingsand-loan-crisis-dies-at-90.html. Mises, L. (1944). Bureaucracy. New Haven: Yale University Press. Mises, L. (1963). Human Action a Treatise on Economics (2nd ed.). New Haven: Yale University Press. Mises, L. (1966). Human Action a Treatise on Economics (3rd ed.). Chicago: Henry Regnery. Mises, L. (1985 [1927]). Liberalism in the Classical Tradition (R. Raico, Trans.). Auburn, AL: Mises Institute. Mises, M. (1984). My Years with Ludwig von Mises (2nd ed.). Cedar Falls, IA: Center for Futures Education. Mises, L. (1998 [1949]). Human Action A Treatise on Economics the Scholars Edition. Auburn, AL: Ludwig von Mises Institute. Murdoch, R. (1990). The War on Technology. City Journal. Manhattan Institute Third Annual Walter B. Wriston Lecture in Public Policy. http:// www.city-journal.org/article01.php?aid=1631. Olson, C. (2012, October 16). Then: Dinesh D’Souza Leaves Catholic Church. Now: He Leaves Wife (Catholic World Report). Polanyi, K. (1934). Othmar Spann: The Philosopher of Fascism. New Britain, 3(53), 6–7. Raico, R. (2013, February 20). An Interview with Ralph Raico. Mises Institute. https://mises.org/library/interview-ralph-raico-0. Rathkolb, O. (2009). The Anschluss in the Rear View Mirror, 1938–2008: Historical Memories Between Debate and Transformation. In G. Bischof, F. Plasser, & B. Stelzl-Marx (Eds.), New Perspectives on Austrian and World War II. Contemporary Austrian Studies Volume 17. New Brunswick: Transaction. Rockwell, L. H., Jr. (2010). Libertarianism and the Old Right. In W. Block (Ed.), I Chose Liberty: Autobiographies of Contemporary Libertarians. Auburn, AL: Ludwig von Mises Institute. Rothbard, M. N. (1993, August). Who are the Terrorists? Rothbard Rockwell Report, 4(8). http://www.unz.org/Pub/RothbardRockwellReport-1993aug00001.

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Rothbard, M. N. (1994a, May). Those Jury Verdicts. Rothbard Rockwell Report, 5(5). http://www.unz.org/Pub/RothbardRockwellReport-1994may-00009. Rothbard, M. N. (1994b). Nation by Consent. Decomposing the National State. Journal of Libertarian Studies, 11(1), 1–10. https://mises.org/library/ uk-nation-consent. Rothbard, M. N. (1994c, July). Revolution in Italy! Rothbard-Rockwell Report, 5(7), 1–10. http://www.unz.org/Pub/RothbardRockwellReport-1994jul-00001. Rothbard, M. N. (2010). Strictly Confidential: The Private Volker Fund Memos of Murray N. Rothbard (D. Gordon, Ed.). Auburn, AL: Ludwig von Mises Institute. Scott, A. (1955). Natural Resources: The Economics of Conservation. Toronto: University of Toronto Press. Shenoy, S. (1978, June 11). Market Holds Key to Conservation. World Money. MPS Archives Box 100. Shenoy, S. (2003). An Interview with Sudha Shenoy. Austrian Economics Newsletter, 1–8. http://mises.org/journals/aen/aen23_4_1.pdf. Shirer, W. L. (1960). Rise and Fall of the Third Reich. London: Secker and Warburg. Sick. (1991a). October Surprise: America’s Hostages in Iran and the Election of Ronald Reagan. New York: Random House/Times Books. Sick. (1991b, April 15). The Election Story of the Decade. New York Times. http://www.nytimes.com/1991/04/15/opinion/the-election-story-of-thedecade.html. Silverman, P. (1984). Law and Economics in Interwar Vienna Kelsen, Mises and the Regeneration of Austrian Liberalism. University of Chicago Ph.D., Department of History, Faculty of the Division of the Social Sciences. Vanberg, V. (2013). Hayek in Freiburg. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part I Influences, From Mises to Bartley. Basingstoke, England: Palgrave Macmillan. von Monakow, C., & Kitabayashi, S. (1919). Schizophrenie und Plexus Chorioidei. Schweizer Archiv für Neurologie und Psychiatrie, 5, 378–392. Wasserstein, B. (2007). Barbarism and Civilization: A History of Europe in Our Time. Oxford: Oxford University Press. White, L. H. (2008). Did Hayek and Robbins Deepen the Great Depression? Journal of Money, Credit and Banking, 40, 751–768. Wieser, F. (1983 [1926]). The Law of Power. University of Nebraska-Lincoln, Bureau of Business Research.

3 The Politicization of Academia

1 Argumentum Ad Hominem Hayek promoted the deflation that facilitated the rise of Hitler and thus the expansion of the Soviet Empire into Europe. Left Utopia was assisted by one-handed economists: the nomenklatura, whose other hand was ‘free’ to receive the benefits of ruling class status. Yet outside the ‘free’ market, economists are trained to be two-handed: to evaluate costs and benefits and to detect and report both merits and defects. After Hitler’s defeat, Hayek (1949, 432–433; 1978) recruited the ‘worst … inferior … mediocrities’ to ‘do his bidding’: a ­lumpenprofessoriat who would help build the Right Utopia.1 Two years after the ­foundation of MPS, Lincoln Gordon (1949, 976–978) complained about the pernicious influence of four MPS members: ‘There has emerged in ­ recent years a new fashion of egregious rudeness among self-styled libertarians… the Hayek-Mises-Jewkes-Graham manner.’ The Nobel Prize for Economic Sciences (1969–) increased the incentive to product differentiate rather than collaborate (relatively anonymously) in the knowledge production function.

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For Austrians, the ‘Fascist’ label is part of their argumentum ad ­hominem discourse—‘Lt. Col.’ Ebeling (2017b), for example, describes National Public Radio as a Nazi institution: ‘National Socialist Radio.’ For scholars, however, the label requires investigation. In Hitler’s Pope The Secret History of Pius XII, John Cornwell (1999, 2003) argued that Eugenio Maria Giuseppe Giovanni Pacelli (1876–1958), Pope Pius XII (1939–1958), had ‘nourished a striking antipathy toward the Jews as early as 1917’; displayed a ‘fear and contempt of Judaism based on his belief that the Jews were behind the Bolshevik plot to destroy Christendom’ (1918–1938); ‘acknowledged to representatives of the Third Reich that the regime’s anti-Semitic policies were a matter of Germany’s internal politics’; ‘failed to sanction protest by German Catholic bishops against anti-Semitism’; ‘did not attempt to intervene in the process by which Catholic clergy collaborated in racial certification to identify Jews’; and ‘after Pius XI’s Mit Brennender Sorge, denouncing the Nazi regime (although not by name), Pacelli attempted to mitigate the effect of the encyclical by giving private diplomatic reassurances to Berlin despite his awareness of widespread Nazi persecution of Jews’: He was ‘convinced that the Jews had brought misfortune on their own heads: intervention on their behalf could only draw the church into alliances with forces inimical to Catholicism.’ Cornwell’s critics, including Rabbi David Dalin’s (2005), the author of The Myth of Hitler’s Pope: How Pope Pius XII Rescued Jews from the Nazis, have provided an alternative evidence-based perspective. In contrast, Austrians have responded to Mises’ membership of the Austro-Fascist ‘Fatherland Front’ plus the official Fascist social club with posthumous ventriloquism by inserting ‘[Italian]’ before Mises’ (1985 [1927], 44, 49) praise of ‘Fascists,’ ‘Germans and Italians,’ including ‘Ludendorff and Hitler’ (Leeson 2018). Policy advocates often co-align on multiple fronts: market failure deniers (and climate change deniers in particular) are often ­proponents of ‘free’ market ‘liberty’ for the financial sector. Hayek referred to the Greens as the new barbarians in our midst2; and informed a correspondent that had he been a younger man, he would have concentrated on exposing Greens, instead of focusing almost exclusively on exposing Reds.3

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In response to this ‘free’ market pollution of economic discourse, the recipient of the 2008 Nobel Prize for Economic Sciences complained about President Trump using somewhat inflammatory language: he was ‘un-American’ and illustrated ‘Fascism, American style’ (Krugman 2017a, b). While the Republican Party was ‘completely united behind its project of destroying civilization,’ Paul Krugman (2017c) couldn’t think of a ‘single prominent climate skeptic who isn’t obviously ­arguing in bad faith.’ Krugman asserted that three overlapping groups were driving this ‘epidemic of bad faith … a sort of axis of climate evil’; first, the fossil fuel industry (‘think the Koch brothers’) which has an ‘obvious financial stake in continuing to sell dirty energy’ and who fund global warming sceptics; second, an ‘influential’ part of the US political spectrum (‘think the Wall Street Journal editorial page’) which is ‘opposed to any and all forms of government economic regulation; it’s committed to Reagan’s doctrine that government is always the problem, never the solution’; and third, a ‘few public intellectuals—‘less important than the plutocrats and ideologues’—who adopt a ‘pose of climate skepticism out of sheer ego’: In effect, they say: ‘Look at me! I’m smart! I’m contrarian! I’ll show you how clever I am by denying the scientific consensus!’ And for the sake of this posturing, they’re willing to nudge us further down the road to catastrophe.

Peterson (1996) reflected about the MPS: ‘Thought precedes action. Think-tanks and ideas indeed have consequences. Ideas, good or bad, triumph in the end.’ And Fisher told Margit Mises (1984, 158) that ‘all’ of his efforts had originally stemmed from Mises’ ‘teachings, writings and activities. Ideas have consequences.’ But for Hayek’s ‘secondhand dealers in ideas’ there appear to be no adverse consequences, intended or otherwise. Journalists, in contrast, face different incentives: after a report about links between Russia and Trump’s White House, CNN reported that ‘The individuals all stated that they accepted responsibility and wanted to resign. That story did not meet CNN’s editorial standards and has been retracted. Links to the story have been disabled.’ A CNN source

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elaborated: ‘We pulled it down not because we disproved it,’ but there was ‘enough concern’ on some factual points that ‘given the breach in process, we decided to pull it down’ (Wemple 2017). Yet MPS ­‘journalists’ like Chamberlain and Davenport uncritically repeated the propaganda of the non-democratic white supremacist governments that they approved of (Chapter 6, below). John Farrell (2017) documented Nixon’s treason: on 22 October 1968, ordering John Haldeman to ‘monkey wrench’ President Lyndon Johnson’s efforts to strike a peace deal in Vietnam—an ‘October surprise’ that would have reflected credit on the Democrats. Faith in the prevailing domino ‘theory’ resulted in the deaths of 58,000 G.I.s plus about three million Vietnamese, Laotians and Cambodians. Chamberlain (1987) was motivated not by disinterested analysis by a higher cause (imaginary or otherwise): he would ‘like to be a complete libertarian, but as long as Russia exists in the world, I can’t be. I think someone has to oppose the spread of the Communist empire. Is that an imperial desire, or is it common sense? … Chile would have been in worse trouble if Allende had transformed it into another Cuba … It isn’t just Chile. Our concern is Angola and Mozambique and Nicaragua and Cuba itself. I think if Chile had gone Communist there would have been a domino effect elsewhere.’

2 Producer Sovereignty Masquerading as Consumer Sovereignty For the Cato Policy Report, James U. Blanchard III asked ‘What can individuals do to help the spread of free-market ideas?’ Hayek (1984) replied: ‘There are now specialized institutions which are trying to apply free-market principles to concrete problems in a form which is intelligible to the general public. And these things must be financially supported.’ Thomas Hazlett asked Hayek about the IEA’s ‘tremendous influence in Britain. Is this really the solution, to stimulate intellectual discourse from a free-market standpoint?’ Hayek (1978) replied: ‘Oh, I’m sure you

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can’t operate any other way … I oughtn’t to praise them because the suggestion of the Institute came from me originally; so I let them on the job, but I’m greatly pleased that they are so successful.’ Hazlett asked So if a businessman says to you, ‘What can I do?’ from the state down, your suggestion is to send a check to the IEA or a reasonable facsimile.

Hayek replied: ‘Oh, yes. Of course, do the same thing here.’4 If the ‘free’ market abjures the ‘nonconcept of “education”’ (Chapter 7, below), what replaces it—‘Monkey see, Monkey do’? The Hayek-Mises deifier, Boettke (2015), who is paid a middle-class income from the Virginia taxpayer to work full time, tells his GMU ­students and others that he lives in a ‘different world than the 99%’ and ‘I’d like to make more money.’ Can he explain why he and some of his GMU colleagues are on the list of what sciencecorruption.com calls the ‘cash-for-comments network’ of the tobacco lobby: ‘each op-ed now earned the economists $3000. Presentations made to conferences earned them $5000’?5 In ‘The Case for Ordinary Economics,’ Boettke and Stefanie Haeffele-Balch (2017) proclaimed: ‘Limiting the influence of special interests and tying budgets to performance are just some ways to hold politicians accountable and ensure better policy outcomes.’ And Hayek (1978) stated: ‘You see, my concern has increasingly become that in democracy as a system it isn’t really the opinion of the majority which governs but the necessity of paying off any number of special interests’6; while maintaining his aristocratic lifestyle from tax-exempt ‘gifts’ from these ‘special interests.’ And the ‘Hayek-inspired’—‘Structure of Social Change’—that Charles Koch and GMU’s Fink concocted, sought to build diverse coalitions of individual citizens and special interest groups needed to press for the implementation of policy change. (cited by Schulman 2014; Chapter 6, below)

Adam Smith (1827 [1776], book 1, Chapter 10) famously noted that ‘People of the same trade seldom meet together, even for merriment and diversion, but the conversation ends in a conspiracy against the public,

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or in some contrivance to raise prices. It is impossible indeed to prevent such meetings, by any law which either could be executed, or would be consistent with liberty and justice. But though the law cannot hinder people of the same trade from sometimes assembling together, it ought to do nothing to facilitate such assemblies; much less to render them necessary … A regulation which obliges all those of the same trade in a particular town to enter their names and places of abode in a public register, facilitates such assemblies.’7 In Austria, Mises (1909–1934) had been a full-time lobbyist for employer trade unions; in the United States, both he and Hayek were funded from this source; and the MPS reached out to similarly placed individuals.8 In the words of one of its members, the MPS became ‘a businessmen’s sort of trade association’ (cited by Burgin 2012, 146). The Internal Revenue Service (19 January 1965) terminated the tax-exempt status of the MPS (before reversing their decision).9 To celebrate the bicentennial of Smith’s (1827 [1776]) Wealth of Nations, the MPS met in Scotland where ‘von’ Hayek told the press: ‘[Labour] Trade union mentality has come to govern the whole country. Basic elements of liberty are being engulfed by collectivism’ (cited by Taylor 1976). The 1974 Nobel Prize broke the second of Hayek’s three prolonged cycles of suicidal depressions (1960–1961; 1969–1974; 1985–). Hayek told Business Week (15 December 1980): ‘I believe that a real depression for six months could break’ the inflation ‘cycle.’ In December 1980, Hayek also told The Wall Street Journal that Mrs Thatcher should be encouraged to squeeze the already-weakened economy. Unemployment inevitably will continue its climb, he concedes. But in six months to a year, he claims, the worst should be over and the first signs of recovery should be apparent. ‘Once people regain hope, this spreads,’ he said, ‘and it will be the beginning of another boom.’ (Wallace 1980)

When Mrs. Thatcher won the May 1979 election, unemployment in the UK was 5.3%; it was 8% when Hayek made his ‘six months to a year’ prediction to The Wall Street Journal; it reached a peak of 11.9%

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April–June 1984; and was 11.7% in August 1984 when Hayek (1984) expressed satisfaction to the Cato Policy Report: Many things in the last three years have moved very much better than I had hoped. Particularly in England, the fact that Mrs. Thatcher would be able to bring inflation down as well as she has done, and the same to some extent in America, is very encouraging.

But more policy-induced unemployment was required: ‘If you can bring down inflation to zero, and have it stay there, I think the position of the leading countries can be saved.’ When Blanchard III stated that he had ‘been pleasantly surprised that Margaret Thatcher has accomplished as much as she has,’ Hayek (1984) replied: ‘And she sees why she hasn’t accomplished more. She has recently said, repeating my own criticism to her, that she has been much too slow.’ Two decades after Hayek’s ‘six months to a year’ prediction, unemployment returned to 5.3% (May–July 2000).10 Hayek (1978) was also out by two decades in his immediate postwar forecast: ‘On the whole,’ predictive failure had ‘strengthen[ed]’ his faith in Austrian Business Cycle Theory: ‘although I see more clearly that there’s a very general schema which has to be filled in in detail. The particular form I gave it was connected with the mechanism of the gold standard, which allowed a credit expansion up to a point and then made a certain reversal possible. I always knew that in principle there was no definite time limit for the period for which you could stimulate expansion by rapidly accelerating inflation. But I just took it for granted that there was a built-in stop in the form of the gold standard, and in that I was a little mistaken in my diagnosis of the postwar development. I knew the boom would break down, but I didn’t give it as long as it actually lasted. That you could maintain an inflationary boom for something like twenty years I did not anticipate [emphases added].’11 Hayek (1982, 29) told Edmund Goldberger that reflation was a conspiracy to destroy the economy: it is ‘very difficult to believe’ that those promoting ‘reflation’ don’t ‘understand’ what the implications would be: ‘What are the motives of these reflationists, who urge what will be distinctly inflationary consequences? If it is wrongly conceived compassion, reflation will not help the disadvantaged.’ This interview—which

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The Wall Street Journal cited in its ‘Notable and Quotable’ section— invites an examination of Hayek’s (and Mises’) motives for promoting the deflation that facilitated Hitler’s rise to power.12 Hayek also told The Wall Street Journal that Britain can only lick inflation if its [labour] unions are stripped of much of their power. ‘What worries me,’ he says, ‘is that, almost as soon as we get inflation a bit under control, [labour] union pressure will be resumed, and government will again be forced to resume inflation.’ (Wallace 1980)

Hayek, Trump and the Koch brothers regard themselves as the Four Horsemen—not of the Apocalypse (catastrophic climate change)— but of the ‘free’ market. With respect to the Fatherland Front: Hayek’s father, August (1871–1928), was a proto-Nazi; Fred Koch (1900–1967) co-founded the John Birch Society; and Fred Trump (1905–1999) was arrested after apparently taking part in a Klu Klux Klan rally (Chapter 4, below). Donald Trump acquired political power by enflaming the ‘birther movement’; and ‘von’ Hayek devoted his life to preserving what he could of his inherited entitlement program. In 2010 (before the April 2011 release of Barack Obama’s birth certificate), polls suggested that at least 25% of adult Americans were ‘birthers’ (they doubted that the President had been born in the United States)13; and ‘von’ Hayek (1978) found that a sizeable proportion deferred to his ‘birthright’: ‘And the curious thing is that in the countryside of southwest England, the class distinctions are very sharp, but they’re not resented. [laughter] They’re still accepted as part of the natural order.’14 In private celebration of Atlas Shrugged, ‘von’ Mises (2007 [1958], 11) told Rand that she was assisting this natural order: ‘You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you.’ George Mason is regarded as the father of the United States Bill of Rights. Hayek (1978) told the father of ‘Masonomics’ that he sought to overthrow the Constitution of the United States and replace it with a single sentence written by a dictator-promoting European aristocrat:

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the one phrase in the American Constitution, or rather in the First Amendment, which I think most highly of is the phrase, ‘Congress shall make no law….’ Now, that’s unique, but unfortunately [it goes] only to a particular point. I think the phrase ought to read, ‘Congress should make no law authorizing government to take any discriminatory measures of coercion.’ I think this would make all the other rights unnecessary and create the sort of conditions which I want to see.15

President Trump stands accused of violating the Title of Nobility Clause (Article 1, Section 9, Clause 8) that prohibits the federal government from granting titles of nobility and restricts members of the government from receiving gifts, emoluments, offices or titles from foreign governments without the consent of Congress (the Emoluments Clause). After the 2016 presidential election, Trump International Hotel (1100 Pennsylvania Avenue—between the White House and Capital Hill)– became the geographical location of ‘Drain the Swamp,’ ‘free’ market, ‘special interest’ lobbyists. When Trump issued an order for federal agencies to form Task Forces to dismantle government regulations, the Transportation Department picked a ‘team’ with ‘deep’ industry ties (one had held executive roles for several electric and hybrid car companies regulated by the department; and two had either previously lobbied for an a­ irline or had represented an airline in regulatory matters). Six months into the Trump Administration, there were 85 known current and former ‘team’ members, including 34 with ‘potential conflicts.’ At least two could profit if certain regulations are undone; and at least four were registered to lobby the agencies they now work for (Ivory and Faturechiaug 2007). The ‘Mission’ of the Heartland Institute is to ‘discover, develop, and promote free-market solutions to social and economic problems.’16 According to their ‘Freedom Rising under President Trump,’ the new ‘president offers the best opportunity in decades to shrink the size and power of government and increase individual liberty.’17 According to Heartland’s President, Joseph Bast (2017), Trump’s ‘inaugural address, like his appointments to his cabinet, is a sign that good things lie ahead.’ Blast celebrated Trump’s

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repeated references to God and his statement that Americans are ‘protected by God’ … Good for Trump for saying out loud what millions of Americans believe and need to hear.

In ‘The Myth of the Climate Change 97,’ Bast and Roy Spencer (2014) used The Wall Street Journal op-ed pages to ask: What is the origin of the ‘false belief ’ that 97% of scientists agree that climate change was an ‘urgent’ issue? This invites a parallel question: What is the origin of Heartland’s funding? The Institute doesn’t disclose its funding sources; however, they have received funding from MPS-sources: oil and gas companies (including $736,500 from ExxonMobil), tobacco companies, the Sarah Scaife Foundation and the Charles G. Koch Charitable Foundation (Eilperin 2012). A Heartland Board member, Roy E. Marden, was simultaneously a Corporate Affairs Policy Analyst and Manager of Industry Affairs for Philip Morris and an MPS member. Heartland’s Sterling Burnett (2017) celebrated Trump’s immediate ‘regulatory freeze’ which included at least ‘30 environmental regulations, including updated renewable-fuel requirements and increased energy-efficiency standards for portable air conditioners, walk-in coolers and commercial boilers. Jacki Pick, executive vice president of the National Center for Policy Analysis, says Trump’s actions are aimed at restoring Americans’ trust in government.’ In 2013, Matt Ball, an executive at the Koch-funded Americans for Prosperity, sent Scott Pruitt a note telling him that he was working for ‘true champions of freedom and liberty!’—which suggests a potential conflict of interest given that Pruitt was then Oklahoma Attorney General. Also in 2013, American Fuel and Petrochemical Manufacturers, an oil and gas lobby group, provided Pruitt’s office with ‘template language to oppose ozone limits and the renewable fuel standard program’—adding: ‘This argument is more credible coming from a state.’ Later that year, Pruitt filed opposition to both of these regulations (Millman and Rushe 2017). In 2017, Pruitt, Administrator of President Trump’s Environmental Protection Agency (EPA), ‘heralded a new era of environmental ­deregulation’ in a speech at a coal mine that was fined in 2016 contaminating local waterways with toxic materials. Pruitt told the assembled

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miners that the new ‘back to basics’ EPA agenda meant that the federal government’s ‘war’ on coal was over (Millman 2017). Bast (2011) dropped out after eight years as an undergraduate; and Heartland’s Ebeling (2017b)—who took eight years (1968–1976) to complete his tax-funded undergraduate degree, twenty-four years (1976–2000) to complete his tax-funded Ph.D. and is employed by the publically funded Citadel Military College—rejoiced that the EPA’s budget would be ‘cut by over 31 percent’; while complaining: What is feeding the insatiable growth of America’s domestic system of political paternalism are the ‘entitlement’ programs: the governmental spending surrounding Social Security and Medicare redistribution.

In ‘To Put America First, Trump Must Exit the Paris Climate Agreement,’ Heartland’s Isaac Orr (27 April 2017a) summarized an ‘analysis’ from the Heritage Foundation: if the ‘regulations proposed by Obama at Paris were enacted, it would result in the United States’ gross domestic product being reduced by $2.5 trillion by 2040, compared to what it would be without the regulations. This is the equivalent of wiping clean the economy for the entire State of California. The agreement would also result in 400,000 fewer jobs by 2035, 50% of which would be jobs in the manufacturing sector.’ Isaac (12 June 2017b) then celebrated: ‘Trump’s Exit From Climate Accord Puts America First, For a Change.’ Who funds the ‘free’ market? In Merchants of Doubt How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming, Naomi Oreskes and Erik Conway (2010, 234) report that the Philip Morris tobacco company fund the Heartland Institute, the Mises Institute, the GMU Law and Economics Center, the American Enterprise Institute (AEI) and the Competitive Enterprise Institute. Referring to a Philip Morris product, Rockwell (1990) stated: At least the tobacco industry works through persuasion. The state of California gets its money, and its way, at the point of a gun. Give me Virginia Slims over the tax man any day.

Rockwell (1998) rejoiced:

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Only two months ago, the tobacco industry was in the process of being semi-nationalized, and it seemed to be cooperating. Suddenly, the industry decided it wouldn’t take it anymore, and got up from the negotiating table and walked away. This threw Congress and the regulators and the trial lawyers into fits, but close watchers are now predicting there may not be a deal.

Rockwell (1998) criticized pretend ‘free’ market promoters like Robert Bork who ‘for years a tough-edged critic of antitrust enforcement, recently signed up as a consultant with Netscape, the corporation that stands to benefit the most from an antitrust breakup of Microsoft. He’s doing very well. He could probably rack up a hundred billable hours, at $400 each, just on the responses he’s written to Mises Institute editorials in the last month. No doubt his total take will be somewhat higher than if he had been just another pro-antitrust economist. But it illustrates a point: the personal advantages of compromise far outweigh those that come from sticking to principle. If your conscience can bear it, it’s a good career move. Like all our [Mises Institute] scholars, Dominick Armentano, the Rothbardian antitrust economist with us this weekend, would be very valuable to the Justice Department if he were willing to make the switch.’ Documents on the University of California, San Francisco website led ‘Corporate Corruption of Science’ to conclude that Armentano, Professor Emeritus in Economics at the University of Hartford in Connecticut, was part of the ‘cash-for-comment’ network of the tobacco industry: ‘each op-ed now earned the economists $3000. Presentations made to conferences earned them $5000.’18 The short-run Key Performance Indicator of ‘free’ market ‘think’ tanks is donor revenue. Who polices those who promote the ‘morals of the market’? In resigning from the United States Office of Government Ethics, Walter Shaub complained that the (deregulation-promoting) Trump administration had ‘flouted or directly challenged long-accepted norms’: It’s hard for the United States to pursue international anticorruption and ethics initiatives when we’re not even keeping our own side of the street clean. It affects our credibility. I think we are pretty close to a laughingstock at this point. (cited by Lipton and Fandosjuly 2017).

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3 Friedman’s Conclusions Starting in the 1870s, classical economics was rebuilt by moving away from Adam Smith’s ‘adding-up’ cost-of-production theory of value and the associated labour theory of value (which had been expropriated by Marxists as a theory of exploitation). By adding a demand curve to the supply curve, neoclassical theory refocused economics on utility maximization. This tended to support utilitarian conclusions—the purpose of economic policy was ‘the greatest good of the greatest number’ as measured by the aggregate number of ‘utils’ consumed. ‘Free’ market economics returned to production fetishism via a number of stages: • 1909: Mises becomes a full-time lobbyist for producers; • 1922: Mises plagiarizes the concept of ‘consumer sovereignty’: ‘The Lord of Production is the Consumer’ (‘Der Herr der Produktion ist der Konsument ’); • 1927: Mises enlists ‘Fascists’ (including ‘Ludendorff and Hitler’) to protect ‘property,’ and insists that taxes must not be levied to fund education; • 1929: Hayek explains that Mises’ ‘ruthless consistency’ was merely the development of ‘economic liberalism to its ultimate consequences’; • 1929–1933: Mises and Hayek promote the deflation that facilitates Hitler’s rise to power; • The 1930s: Hayek and others launched the British version of the ordinalist revolution—interpersonal measures of utility were ‘scientifically’ impossible and therefore the wealthy should not be taxed to pay for the education of poor people’s children (Pareto paralysis); • 1957: Rand’s Atlas Shrugged deifies the heroic producer which, according to Mises, informs the lower classes that they are ‘inferior’; • 1974: Hayek wins the Nobel Prize and Rothbard motivates economists to chant ‘We want externalities’; • 1977: Hayek praises both Pinochet and the MPS achievement: a ‘consistent doctrine and some international circles of communication’;

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• 1979: externalities are ‘revealed’ to have been invented by a gunrunner for Stalin; • 1980: the Hayek-Koch-Fink production line begins turning-out ‘cheerleaders’; • The 1990s: these cheerleaders assist the rise of Putin’s ‘Russia of the Oligarchs’; • 1999: Glass-Steagall is repealed—deregulation for credit-crunchproducing banks. Referring to Atlas Shrugged, Boettke (2007a, 179)—a self-confessed ‘cheerleader’ (Chapter 4, below)—spoke ex cathedra: ‘Taxation discourages production.’ Aware that it takes ‘varied iterations to force alien concepts on reluctant minds,’ Boettke instructs his GMU students: ‘Become an input into others’ production functions’ (cited by Martin 2010, 134). Logic is not required: ‘Saying that people respond to incentives doesn’t tell me anything unless you tell me how they understand those incentives’ (cited by Martin 2010, 136). By design, taxation discourages the production of externalities (tobacco, climate change, etc.)—a socially optimal improvement (within the Pigouvian framework). And taxation can encourage household savings (and thus reduce the tax-burden of funding retirees) by countering the effects of expanding access to and use of credit cards.19 What would happen to Hayek-Koch-Fink ‘knowledge’ if a 100% rent tax were applied to those who work on its production? By his own account, deifying Mises and Hayek has made Boettke (2015) fabulously wealthy—so presumably, the income that the taxpayers of Virginia provide him with is (for him) pocket money and could be taxed away without affecting supply. This volume of Hayek: A Collaborative Biography is, in part, inspired by three (or maybe two-and-a-half ) of Friedman’s conclusions. The first is expressed in a citation from one of Stigler unpublished memorandum: Should the university as an institution enter moral, social, or political movements, it then becomes an instrument of oppression against the individual professor. If the university endorses idea X, any opponents of the

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idea X has been censored. It matters not whether X is a nearly universal moral conviction … or the most transitory and part as an endorsement of a man or scheme. If there were an absolute certain truth, the university community could endorse it with small cost; however, the very first of the certain truths has yet to be determined. The university as an institution discharges its moral responsibility to society when it provides the condition for free enquiry, and it violates this responsibility when it sacrifices freedom of enquiry to more immediate goals. (Friedman 1969)

In the second, Friedman (2 October 1973) told Pat Buchanan that he had ‘long believed that there is no justification for tax exemption for churches, for universities, for educational foundations, for charitable foundations, or what-not.’20 And in the third, Friedman came very close to attributing blame for the Holocaust to the ‘other half ’ of the ‘free’ market school which he and the Chicago School had allowed to prosper (Leeson 2018). The ‘free’ market subset of the neoclassical school assert that neoclassical incentives don’t apply to them—they would ‘do the bidding’ of the Koch brothers and/or the tobacco industry even if they weren’t paid to do so. The evidence, however, suggests that it is safest to assume that any assertion by a ‘free’ market promoter should be regarded as fraud and/ or delusion until critically examined by those who are not lobbyists. Those who embrace the ‘free’ market ‘lean into’ the accusation that they are promoting funded-fraud: but each, individually, must be located on the fraud-to-delusion spectrum; and that which the ‘free’ market seeks to suppress—evidence—must determine the appropriate point on that distribution. Two-handed neoclassical economics does not seek to attribute blame—outcomes are perceived as the interaction between optimizing agents, incentives and constraints. This volume examines the incentives which allowed the ‘free’ market to exert a dominant influence on public policy—especially after the 1974 Nobel Prize. Although, by his own account, he taught at NYU for roughly four years, Boettke (2007b) also asserts: ‘I taught at New York University for roughly ten years.’ But according to his Curriculum Vitae (CV), Boettke was employed at ‘New York University 1990–1997,’ with ‘1992–1993,’

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‘1993’ and ‘1995’ spent elsewhere (Chapter 4, below).21 Assertions made on behalf of ‘free’ market outcomes may also be ‘roughly’ correct. Mises’ inability to penetrate beyond his own ‘free’ market extended to money, exchange rates and inflation. In London in autumn 1931, as Sterling was devalued, Mises predicted: ‘In one week England will be in hyperinflation’ (cited by Hülsmann 2007, 633, 636, 641, n. 68). But no hyperinflation resulted. As Keynes and 730 delegates from all 44 Allied nations gathered in Bretton Woods, New Hampshire, to construct the post-war system of fixed exchange rates, the alleged ­ omnipotent Mises (2010 [1944], 252) asserted in Omnipotent Government: ‘The Keynesian school passionately advocates instability of foreign exchange rates.’ At the start of the quarter-century post-war boom, Mises (2009 [31 December 1946], 2) asserted that ‘Minimum wage rates, whether enforced by government decree or by labor union pressure and compulsion, result in mass unemployment prolonged year after year.’ In 1953, Mises was equally blind to ‘socialist calculation’—insisting that the ‘inventive spirit was absent in Russia’: ‘As far as I know the best that the Russians have achieved was imitating foreign models’ (cited by Hülsmann 2007, 831). Four years later, the Russian Sputnik 1 triggered the ‘Space Race.’ Informed by Randian fiction, ‘Free’ Market Believers (FMB) look at ‘Knowledge’ about mythical futures (Kt+1), and see Paradise (Pt+1…n); non-FMB do not. In the 1990s, the Austrian-promoted ‘free’ market inflicted the damage on Russia that the Austrian-led Third Reich had previously sought to do. Having survived the ‘Fascist’ occupation (1941–1945), post-communist economists and politicians turned to the Institute named after a card-carrying Austro-Fascist and ‘Ludendorff and Hitler’ promoter (Mises 1985 [1927], 44, 50, 51). At the 1990 Mises Institute ‘De-Socialization Conference,’ a hosted delegation from post-communist Lithuania were told by the GMU graduate and Heartland Institute policy ‘expert,’ Cordato (1990): ‘Taxes are an intrusion into the free market system and keep it from operating as efficiently as it otherwise would. In a fundamental sense, taxation subverts private property and is inconsistent with the notion of voluntary exchange.’22 They were also told by the GMU graduate

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(and later GMU Professor of Economics), Tabarrok (1990a), that a ­‘successful program to de-socialize must involve rapid change on all fronts. It requires revolutionary change, a complete break with the past … all areas and aspects of a free market should be instituted at one time.’ Tabarrok’s authority was Mises: ‘one of the twentieth century’s greatest defenders of liberty. Mises’ advice and thought have been of paramount importance to defenders of liberty everywhere. I hope they can benefit your country as well.’ Twelve years previously, Charles Koch (1978, 32) had complained: ‘We have voluntarily supported universities and foundations who are philosophically dedicated to the destruction of our businesses and of what remains of the free market. This must stop. [Koch’s emphasis]. We must stop financing our own destruction. Period.’ Tabarrok (1990b) appeared to explain why Koch et al. should not be taxed to fund, for example, public universities like GMU: ‘suppose some economist suggests that society would be made better off if citizens were taxed in order to provide them with a public good. Not everyone will value the public good in the same way. The public good will be beneficial to some citizens and they will, in consequence, be able to move down their hierarchy of values, i.e. achieve more important ends than they would have without the public good. Other citizens, however, will have to move up their hierarchy of values, i.e. the taxes incurred will force them to forgo some ends that they otherwise would have been able to achieve. How can we possibly compare these ends and purposes?’ According to the Austrian Economics Newsletter (1990, 13), the Lithuanians were ‘pleased with the advice they received.’ After the fall of the Berlin Wall, Mises’ work began to be published in Russian. Alexander Kouryaev (2001) reported about post-communist Russia: ‘Here, in my worldview, there was something of a vacuum. I was seeking a replacement for Marxism but I needed something that was systemic and comparable to Marxism in explanatory power and internal integrity. I think it was this uneasiness that had been consuming me before I came across Human Action. At last my soul has found rest … If the Austrian School is properly represented in classroom, it will, in my opinion, gain the upper hand in the competition of ideas. Human Action, I hope, is the first brick in the wall of a mighty edifice.’

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In 1998, Kouryaev (2001) began translated Mises’ Liberalism (an earlier edition had ‘exerted no influence upon the intellectual and ideological climate in Russia’). What did Russians make of it? Mises (1985 [1927], 151–153) compared the ‘law-abiding’ citizen with the ‘robber’: by and large, one can say of the nations of the white race that today inhabit central and western Europe and America that the mentality that Herbert Spencer called ‘militaristic’ has been displaced by that to which he gave the name ‘industrial.’

Russia was the only ‘great’ nation that steadfastly adheres to the ‘­militaristic ideal.’ It has ‘continually behaved like a robber’ who lies in wait for the moment when he can ‘pounce upon his victim and plunder him of his possessions.’ Russians ‘do not wish [Mises’ emphasis]’ to participate in ‘human social cooperation,’ because they were intent on ‘nothing but the consumption of what others have accumulated.’ His evidence: the ‘ideas’ of Dostoyevsky, Tolstoy and Lenin lived-on and therefore Russians would be unable to ‘produce a lasting social ­organization. They must revert to a condition of complete barbarism.’ It was essential not to let Russians pass beyond their own territorial boundaries to ‘destroy European civilization.’ Mises did not support book-burning or prohibiting imports of translated Russian writings: ‘Neurotics may enjoy them as much as they wish; the healthy will, in any case, eschew them.’ In 1918, Zinovy Rosenbaum—previously a successful pharmacist and businessman—had his property confiscated by Russian communists. His daughter—who later called herself Ayn Rand—departed for the United States in 1926 (Burns 2009, Chapter 1). Rand’s malevolent fiction (in the form of the Rand-Mises-Hayek-Rothbard ideology) ‘returned’ to Russia in the 1990s. According to Rand’s (1957) Atlas Shrugged: ‘There are two sides to every issue. One side is right and the other is wrong, but the middle is always evil’; according to Mises (1950): ‘Either capitalism or socialism: there exists no middle way’; and according to Hoppe (2014 [1995]) there were two choices: ‘a regime of private property and a statist regime where the rest of us merely obey. Ultimately, those are the only two systems from which we have to

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choose.’ Mises’ (1950) ‘Middle-of-the-Road Policy Leads to Socialism’ had been constructed to maintain a ‘free’ market monopoly over MPS discussions and thus sideline the Ordo-Liberal School (Vanberg 2013; Goldschmidt and Hesse 2013; Filip 2018). According to the author of The Wall Street Journal ‘Reading for Business’ column, Mises asserted that if the policies of nonintervention prevailed—free trade, freely fluctuating wage rates, no form of social insurance, etc.—there would be no acute unemployment. Private charity would suffice to prevent the absolute destitution of restricted hard core of unemployables. (cited by Peterson 2009, 9)

Boettke (2001, 1–2) was obliged to describe the ‘free’ market outcome: According to official Russian statistics, 30% of the population (44 million people) was living below the poverty line (roughly $40/ month) in September 1998. Life expectancy for adult males in Russia has declined from 64 in 1990 to 59 in 1998. It is estimated that 40% of Russia’s children are chronically ill. Since 1992 meat and dairy production is down 75%, grain production is down 55%, milk production down 60%, and Gross National Product is down 55%. Real per capita income is down as much as 80% from 1992 according to some measures.

4 Dynasties to Demagogues In the nine decades after the demise of the Habsburgs, three (and possibly four) policy-induced economic disasters can be attributed to the ‘free’ market advocacy of the Österreichische School. The Great Depression—which Hayek and Mises sought to deepen; the ‘free’ market hole into which Russia fell in the 1990s; and the Global Financial Crisis obliged MPS President, Deepak Lal (2009), to call a special meeting to ask how such a (predictable) disaster could have happened on the Watch of supposedly classical liberals … what went wrong when ‘our side’ - as it were - was in charge.

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The fall of the Berlin Wall was rapidly followed by the 1992 Maastricht Treaty which set in motion the move to a single European currency. Demagogues (mostly on the right) benefited from the backlash against unfettered labour mobility in Europe; Trump benefited from the discontent associated with the GFC, the post-1974 flattish real wage growth, and widening income and wealth inequality; Putin and his Oligarchs benefitted from the Russian collapse; and Hitler benefited from German economic collapse. And a century after Lenin shuttered the newly elected Russian parliament, there are widespread suspicions that American elections have been influenced by his twenty-firstcentury successor. Neoclassical economists recommend tariff reductions because aggregate gains remain after winners compensate losers. But ‘free’ market economists (‘free-cons’) believe that rather than compensating the masses they should be told that they are ‘inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you’ (Mises 2007 [1958], 11). What began as a two-volume collaborative biography has expanded into an examination of a post-1974 political power phenomenon: re-feudalization. ‘Free’ market promoters honestly believe that it would be better to end the separation of Church and State, expand the ­authority of the First Estate religious police and elevate the MPS into a new Second Estate—because the taxpayers who inhabit the ‘inferior’ space below them are ‘lesser men’ (Boettke 2007a, 180) who ‘perish as they should’ (Chapter 4, below). The bogus truth that underpins this re-feudalization agenda should be seen in the context of this honestly held faith. In ‘The foundations of prosperity and freedom,’ Ebeling (2017a) reported that he had taught briefly for a year as a visiting professor at [Trinity] college in Connecticut that had some economists on the faculty who were strongly market-oriented, but for the others, say, in the history or political science or sociology departments, they made the college a ‘poster-boy’ for leftist politics and political correctness. It was like interacting with people from a different planet whose ‘logic’ was different from normal human beings.

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Congress collects taxes for the ‘general Welfare of the United States’; and the First Amendment protects ‘freedom of speech’ for even a ‘total fool’ (Chapter 5, below)—but where does the Constitution specify that taxes must be collected to provide a Welfare State for a ‘school’ of total fools? Especially when this ‘school’ resembles a tax-exempt pyramid franchise operation? And is already fully funded by the carbon lobby and the tobacco industry? And which deifies a card-carrying Fascist and member of the official Fascist social club (Mises) and someone who seeks to overthrow that Constitution (Hayek)?

Notes 1. ‘It seems to be true that it is on the whole the more active, intelligent, and original men among the intellectuals who most frequently incline toward socialism, while its opponents are often of an inferior calibre.’ Nobody who is ‘familiar with large numbers of university faculties (and from this point of view the majority of university teachers probably have to be classed as intellectuals rather than as experts) can remain oblivious to the fact that the most brilliant and successful teachers are today more likely than not to be socialists, while those who hold more conservative political views are as frequently mediocrities’ (Hayek 1949). Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 2. Hayek Papers Box 154. Handwritten note. 3. To William Ballou (7 October 1979). Hayek Papers Box 11.19. The context of these remarks is not entirely clear from the correspondence. 4. Friedrich Hayek, interviewed by Thomas Hazlett 12 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 5. It’s not clear whether or not any of Boettke’s op-ed pieces (if written) were published. http://sciencecorruption.com/ATN166/01477.html. 6. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 7. Smith also complained that ‘A regulation which enables those of the same trade to tax themselves in order to provide for their poor, their

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sick, their widows, and orphans, by giving them a common interest to manage, renders such assemblies necessary. An incorporation not only renders them necessary, but makes the act of the majority binding upon the whole.’ 8. For example, Gerhard Winterberg, Swiss Federation of Commerce and Industry. MPS Archives Box 66. 9. MPS Archives Box 51.5. 10. https://www.ons.gov.uk/employmentandlabourmarket/peopleinwork/ employmentandemployeetypes/bulletins/uklabourmarket/latest# unemployment. 11. Friedrich Hayek, interviewed by Jack High date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 12. Reprinted in the Mont Pelerin Society Newsletter February 1983. MPS Archives Box 67. 13. http://politicalticker.blogs.cnn.com/2010/08/04/cnn-poll-quarterdoubt-president-was-born-in-u-s/. 14. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 15. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 16. https://heartland.org/. 17. https://www.heartland.org/topics/government-politics/trump-actionplan/index.html. 18. http://sciencecorruption.com/ATN165/00682.html. 19. The Australian superannuation system addresses that issue. 20. Friedman Archives Box 22.11. 21. https://www.peter-boettke.com/curriculum-vita/. Accessed 5 October 2017. 22. https://www.heartland.org/about-us/who-we-are?q=cordato. According to the Mises Institute, Cordato’s ‘articles have appeared in a number of economics journals and law reviews in addition to The Christian Science Monitor, The Washington Times, Investor’s Business Daily, The Journal of Commerce, The Congressional Record, The Orange County Register, The Freeman, Human Events, National Review Online, The Washington Examiner, Tax Notes and many other newspapers and magazines.’ https://mises.org/profile/roy-cordato.

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References Archival Insights into the Evolution of Economics (and Related Projects) Filip, B. (2018). Hayek and Popper on Piecemeal Engineering and OrdoLiberalism. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part XIV: Popper, Polanyi and Humboldt. Basingstoke: Palgrave Macmillan. Goldschmidt, N., & Hesse, J.-O. (2013). Eucken, Hayek, and the Road to Serfdom. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part II Influences, from Mises to Bartley. Basingstoke: Palgrave Macmillan. Leeson, R. (2018). Hayek: A Collaborative Biography Part VIII The Constitution of Liberty: ‘Shooting in Cold Blood’ Hayek’s Plan for the Future of Democracy. Basingstoke: Palgrave Macmillan. Vanberg, V. (2013). Hayek in Freiburg. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part I Influences, from Mises to Bartley. Basingstoke: Palgrave Macmillan.

Other References Bast, J. (2011, June 30). My Eight Years as an Undergraduate. James Martin Centre. https://www.jamesgmartin.center/2011/06/my-eight-years-as-anundergraduate/. Bast, J. (2017, January 20). Heartland Institute President Joseph Bast on Trump’s Inaugural Address. Heartland Institute. https://www.heartland.org/ news-opinion/news/heartland-institute-president-joseph-bast-on-trumpsinaugural-address. Bast, J., & Spencer, R. (2014, May 26). The Myth of the Climate Change 97. The Wall Street Journal. https://www.wsj.com/articles/joseph-bast-and-royspencer-the-myth-of-the-climate-change-97-1401145980. Boettke, P. J. (2001). Calculation and Coordination Essays on Socialism and Transitional Political Economy. London: Routledge. Boettke, P. J. (2007a). The Economics of Atlas Shrugged. In E. W. Younkins (Ed.), Ayn Rand’s Atlas Shrugged: A Philosophical and Literary Companion. New York: Routledge.

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Boettke, P. J. (2007b). Boettke on Austrian Economics. EconTalk Episode with Pete Boettke Hosted by Russ Roberts. http://www.econtalk.org/ archives/2007/12/boettke_on_aust.html. Boettke, P. J. (2015, January 25). The Transformative Rise of Austrian Economics. The Daily Bell. http://www.thedailybell.com/exclusive-interviews/anthony-wile-peter-boettke-the-transformative-rise-of-austrian-economics/. Boettke, P. J., & Haeffele-Balch, S. (2017, June 5). The Case for Ordinary Economics. USA Today. https://www.usnews.com/opinion/economic-intelligence/articles/2017-06-05/remember-3-basic-economic-principles-intodays-chaotic-world. Burgin, A. (2012). The Great Persuasion: Reinventing Free Markets Since the Depression. Cambridge, MA: Harvard University Press. Burnett, H. S. (2017, February 16). Early Actions Show Trump Is Serious About Climate, Energy Policy Reform. Heartland Institute. https:// www.heartland.org/news-opinion/news/early-actions-show-trumpis-serious-about-climate-energy-policy-reform. Burns, J. (2009). Goddess of the Market Ayn Rand and the American Right. New York: Oxford University Press. Chamberlain, J. (1987, March). Reason Interview with John Chamberlain. Reason. http://reason.com/archives/1987/03/01/reason-interview-with-johncha/2. Cordato, R. E. (1990). Remarks to the Lithuanian Delegation. Austrian Economics Newsletter, 14(2), 14. Cornwell, J. (1999). Hitler’s Pope: The Secret History of Pius XII. New York: Viking. Cornwell, J. (2003, October 29). Hitler’s Pope Pope Pius XII helped Hitler destroy German Catholic political opposition.Vanity Fair. Dalin, D. (2005). The Myth of Hitler’s Pope: How Pope Pius XII Rescued Jews from the Nazis. Washington, DC: Regnery. Ebeling, R. M. (2017a, October 6). The Foundations of Prosperity and Freedom Interview with Richard Ebeling. The Citadel Newsroom. http:// www.citadel.edu/root/the-foundations-of-prosperity-and-freedom. Ebeling, R. M. (2017b, March 20). Trump’s Budgetary Blueprint Retains America’s Welfare State. Heartland Institute. https://www.heartland.org/news-opinion/news/trumps-budgetary-blueprint-retainsamericas-welfare-state. Eilperin, J. (2012, November 25). Climate Skeptic Group Works to Reverse Renewable Energy Mandates. Washington Post. https://www.washingtonpost.com/national/health-science/climate-skeptic-group-works-toreverse-renewable-energy-mandates/2012/11/24/.

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Farrell, J. (2017). Richard Nixon: The Life. New York: Doubleday. Friedman, M. F. (1969, November 10). Ivory Tower. Newsweek. Friedman, M. F. (1973, April 3). Introduction. To F.A. Hayek’s Talk at Mont Pelerin. Mont Pelerin Society Newsletter. MPS Archives Box 48.4. Gordon, L. (1949). Libertarians at Bay. American Economic Review, 39(5), 976–978. Hayek, F. A. (1949). The Intellectuals and Socialism. University of Chicago Law Review, 16(3), 417–433. Hayek, F. A. (1978). Oral History Interviews. Los Angeles: Centre for Oral History Research, University of California. http://oralhistory.library.ucla. edu/. Hayek, F. A. (1982). Interview with Edmund Goldberger. The Corporate Board. Vols. 3–4. Hayek, F. A. (1984, May–June). Exclusive Interview with F.A. Hayek. Cato Policy Report. https://www.cato.org/policy-report/mayjune-1984/ exclusive-interview-fa-hayek. Hoppe, H.-H. (2014 [1995]). The Private Property Order: An Interview with Hans-Hermann Hoppe. Austrian Economic Newsletter, 18(1). https://mises. org/library/private-property-order-interview-hans-hermann-hoppe. Hülsmann, J. G. (2007). Mises: The Last Knight of Liberalism. Auburn, AL: Ludwig von Mises Institute. Ivory, D., & Faturechiaug, R. (2007, August 7). Secrecy and Suspicion Surround Trump’s Deregulation Teams. New York Times. https://www. nytimes.com/2017/08/07/business/trump-deregulation-teams-transportation-department.html?. Koch, C. (1978, August 7). The Business Community: Resisting Regulation. Libertarian Review, 7, 30–34. https://www.libertarianism.org/lr/LR788.pdf. Kouryaev, A. (2001). Mises in Moscow: Interviews With Alexander Kouryaev and Yuri N. Maltsev. Austrian Economics Newsletter, 21(4) (Winter). https:// mises.org/profile/alexander-kouryaev. Krugman, P. (2017a, August 14). When the President Is Un-American. New York Times. https://www.nytimes.com/2017/08/14/opinion/when-the-­president-isun-american.html. Krugman, P. (2017b, August 28). Fascism, American Style. New York Times. https://www.nytimes.com/2017/08/28/opinion/fascism-arpaio-pardon-trump. html. Krugman, P. (2017c, August 11). The Axis of Climate Evil. New York Times. https://www.nytimes.com/2017/08/11/opinion/climate-science-denial.html. Kuehnelt-Leddihn, E. M. (n.d.). The Cultural Background of Ludwig von Mises. http://www.mises.org/pdf/asc/essays/kuehneltLeddihn.pdf.

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Lal, D. (2009). The Mont Pelerin Society: A Mandate Renewed. Mont Pelerin Society Presidential Address. http://www.econ.ucla.edu/lal/MPS%20 Presidential%20Address%203.5.09.pdf. Lipton, E., & Fandosjuly, N. (2017, July 17). Departing Ethics Chief: U.S. Is ‘Close to a Laughingstock.’ New York Times. https://www.nytimes. com/2017/07/17/us/politics/walter-shaub-ethics.html. Martin, A. (2010, September). The Analects of Boettke. Journal of Private Enterprise, 26(1), 125–141. Millman, O. (2017, April 14). Scott Pruitt Hails Era of Environmental Deregulation in Speech at Coal Mine. Guardian. https://www.theguardian. com/environment/2017/apr/13/scott-pruitt-epa-coal-mining-deregulationspeech. Millman, O., & Rushe, D. (2017, February 23). New EPA Head Scott Pruitt’s Emails Reveal Close Ties with Fossil Fuel Interests. Guardian. https://www.theguardian.com/environment/2017/feb/22/scott-pruittemails-oklahoma-fossil-fuels-koch-brothers. Mises, L. (1950, May 4). Middle-of-the-Road Policy Leads to Socialism. Commercial and Financial Chronicle. https://mises.org/library/middleroad-policy-leads-socialism. Mises, L. (1985 [1927]). Liberalism in the Classical Tradition (R. Raico, Trans.). Auburn, AL: Mises Institute. Mises, L. (2007 [1958]). Mises and Rothbard Letters to Ayn Rand. Journal of Libertarian Studies, 21(4), 11–16. Mises, L. (2009). Observations on Professor Hayek’s Plan. Libertarian Papers, 1, 2. www.libertarianpapers.org. Mises, L. (2010 [1944]). Omnipotent Government. The Rise of the Total State and Total War. Indianapolis: Liberty Fund. https://mises.org/library/ omnipotent-government-rise-total-state-and-total-war. Mises, M. (1984). My Years with Ludwig von Mises (2nd ed.). Cedar Falls, IA: Center for Futures Education. Oreskes, N., & Conway, E. (2010). Merchants of Doubt: How a Handful of Scientists Obscured the Truth on Issues from Tobacco Smoke to Global Warming. London: Bloomsbury. Orr, I. (2017a, April 27). To Put America First, Trump Must Exit the Paris Climate Agreement. Heartland Institute. https://www.heartland.org/news-opinion/news/ to-put-america-first-trump-must-exit-the-paris-climate-agreement. Orr, I. (2017b, June 12). Trump’s Exit from Climate Accord Puts America First, for a Change. Heartland Institute. https://www.heartland.org/news-opinion/ news/trumps-exitfrom-climate-accord-puts-america-first-for-a-change.

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Peterson, W. H. (1996, July 1). A History of the Mont Pelerin Society. The Freeman. https://fee.org/articles/a-history-of-the-mont-pelerin-society/. Peterson, W. H. (2009). Mises in America. Auburn, AL: Ludwig von Mises Institute. Rand, A. (1957). Atlas Shrugged. London: Random House. Rockwell, L. H., Jr. (1990, May 3). Tobacco Is a Dirty Weed; I Like It. Los Angeles Times. http://articles.latimes.com/1990-05-03/local/me-20_1_ tobacco-industry. Rockwell, L. H., Jr. (1998, September 15). Mises and Liberty. This Was the Keynote Address at the Ludwig von Mises Institute’s New Building Dedication and Conference on the Great Austrian Economists, June 5–6, 1998, in Auburn, AL. Mises Institute. https://mises.org/library/mises-and-liberty. Schulman, D. (2014). Sons of Wichita: How the Koch Brothers Became America’s Most Powerful and Private Dynasty. New York: Grand Central Publishing. Smith, A. (1827 [1776]). An Inquiry into the Nature and Causes of the Wealth of Nations. London: W. Strahan and Cadell. Tabarrok, A. (1990a). Remarks to the Lithuanian Delegation. Austrian Economics Newsletter, 14(2), 14. https://mises.org/system/tdf/aen11_2_1_1. pdf?file=1&type=document. Tabarrok, A. (1990b). Subjective Value Theory: A Reformulation. Austrian Economics Newsletter, 12(1). https://mises.org/library/subjective-value-theoryreformulation. Taylor, B. (1976, August 28). The Pit of State Control. St. Andrew’s Citizen. MPS Archives Box 48.4. Wallace, L. (1980, December 16). Too Little, Too Slow: Nobel Economist Judges Trial of Monetarism in Britain. Wall Street Journal. MPS Archives Box 48.3. Wemple, E. (2017, June 26). Three CNN Employees Resign Over Retracted Story on Russia Ties. Washington Post.

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1 Ascribed Versus Achieved Status Hayek instructed Walter Morris and others that he wished no longer to be addressed as a German (‘Fritz’ or ‘Friedrich’) but as an Englishman— ‘Frederick.’1 Stripped of the legal right to his Habsburg ‘von,’ ‘von’ Hayek wished to become ‘Sir Friedrich’ or, better still, ‘Sir Fredrick’— which, he said, would ‘solve that problem most elegantly.’2 In 1745, Austria had been forced to surrender Silesia to the Prussian Friedrich der Große (‘Friedrich the Great’). When Cubitt (2006, 28–29) asked Hayek why he so abhorred ‘Old Fritz’ (reigned: 1740–1786), ‘He looked at me totally surprised, and then muttered that surely I knew the reason. Perhaps beneath his English exterior there still lay some never resolved bitterness about this not so very ancient betrayal of his birth country by Prussia.’ According to Mises (1951 [1932], 515): Neither God nor a mystical ‘Natural Force’ created society; it was c­ reated by mankind. Whether society shall continue to evolve or whether it decays lies – in the sense in which causal determination of all events ­permits us to speak of free will – in the hands of man. © The Author(s) 2018 R. Leeson, Hayek: A Collaborative Biography, Archival Insights into the Evolution of Economics, https://doi.org/10.1007/978-3-319-77428-2_4

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The two-handed, four-level hierarchy of the British neoclassical ­tradition consists of: • The social optimum • The privately-optimal market • Government • Institutional structure (mainly publically-owned, providing social infrastructure and political stability, maintaining property rights etc.). In seeking to evaluate (on a case-by-case basis) the relative merits and demerits of the two major social organizers (markets and governments), the British neoclassical tradition embraces checks and balances between these four layers. The role allocated for government (wherever possible) uses market forces. In contrast, Communism sought to suppress the (‘bad’) ‘free’ market and replace ‘God’ with ‘The Party.’ ‘AnarchoCapitalists’ (Rothbardians) continue to promote Randian ‘naked capitalism’ through the removal of the foundations of this hierarchy—the (‘bad’) government; Mises and Hayek, in contrast, sought to capture and fortify these foundations with an alliance with ‘Fascists’ or Operation Condor-style dictatorships. After Hitler’s defeat, Mises and Hayek embraced a revamped onehanded, ‘free’ market, four-level hierarchy: • • • •

The First Estate (who interpret ‘God’) ‘Subsidiary’ government The private socially optimal ‘free’ market Institutions (mainly privately-owned).

When the Cato Policy Report asked ‘Is it possible to measure costs and benefits and is cost/benefit analysis a sufficient program for deregulation?’ Hayek (1983) promoted the religion of deregulation: If you take ‘measure’ literally, certainly not. But so far as you can estimate them roughly, they must be your guide. I think what you soon arrive at is that for practically all regulations the costs are greater than the benefits. It is simpler to argue against regulations as such [emphasis added] than to

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pretend that you can single out those where clearly the costs are greater than the benefits. There is good sense behind the cost/benefit argument, but I don’t think it’s of great practical value.

Economists are aware of ‘lexicographic preferences’ or ‘lexicographic orderings’—but neoclassical language contains inadequately-acknowledged linguistic biases. The Austrian and Lausanne branches promote the ‘free’ market; and the language of British neoclassical analysis is biased towards that ‘free’ market: agents are ‘rational’ (despite evidence of limited rationality); micro-markets can be ‘perfect’; and ‘Pareto ­efficiency’ provides the foundations of policy analysis (the ‘fundamental’ theorems of welfare economics). Pareto ‘optimality’ (a state in which it is impossible to reallocate resources so as to make any one individual or preference criterion better off without making at least one individual or preference criterion worse off) protects the ‘free’ market from policy interference: Pareto paralysis will tend to rule. ‘Pareto improvements’ are few and far between—although the backward bending supply curve of taxes (the Rumsfeld-Cheney-Wanniski ‘Laffer Curve’) appears to have been drawn for ‘shock and awe’ motives. But neither increasing the minimum wage nor moving towards ‘free’ trade is ‘Pareto efficient’—but winners can, in principle, compensate losers to everyone’s satisfaction. Governments may not be skilled at ‘picking winners’ (or regimes to change)—but do they actually—rather than being able to in principle—compensate (that is, assist to retrain, etc.) losers? Tax-induced price increases will reduce demand (e.g. for tobacco) and tend to lead to ‘exit’—not from the ‘industry’ but—from the country to continents (Africa, Asia and the Middle East) where ‘free’ trade can flourish. Neoclassical economics revolves around trade-offs: indifference curves, the long-run choice of capital and labour inputs, etc. But with respect to taxation on tobacco to fund public health campaigns, textbooks emphasize only one outcome—the ‘deadweight loss’ imposed by taxation. And the ‘deadweight loss’ imposed by bank-induced credit crunches are referred to by the less-exalted name, ‘Okun gap.’ The Lausanne branch of the neoclassical school provided the micro-foundations of what later became known as macroeconomics: In Walrasian general equilibrium analysis, commodity markets with

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flexible prices and many traders demonstrate the existence of competitive equilibrium—the benchmark of ‘efficiency,’ an ‘ideal standard’ (or ‘gold standard’) by which other market structures are evaluated. In later developments, the macro-market will, it is frequently asserted, be magnetically attracted (will return) to the ‘natural’ rate of output and unemployment. Yet policy-induced unemployment will reduce the economy’s stock of physical and human capital—which raises the prospect of path dependency: the ‘natural’ rate may be magnetically attracted to the actual rate (Leeson 2000). British neoclassical theory tends to place a higher regulatory authority above (so as to supplement) the ‘free’ market—the social ­ optimum (Keynesian aggregate demand management, price level management or low-inflation targeting, Pigouvian taxes on pollution, etc.). In contrast, in Law, Legislation and Liberty The Mirage of Social Justice, Hayek (1976a) denigrated the social optimum as an illusory quest— hence the importance for Austrians of creating the illusion that those who promote the social optimum were, like Keynes, ‘immoralists’ or, like Pigou, communist agents (see below). Hence also the importance of ‘The Coase Theorem’ which ‘proves’ that in the absence of transaction costs, Pigouvian externalities can be internalized—not by taxes and subsidies, but—by the ‘free’ market. In seeking to ‘renew’ Hayek’s ‘mandate’ and tackle the ‘resurrected threats to liberty,’ Lal’s (2009) MPS Presidential rhetoric placed the ‘free’ market in opposition to the British tradition: ‘how can the growth of the Nanny State’s undermining of [John Stuart] Mill’s principle of liberty be countered?’ Yet Hayek and Mises created a corrupt ‘Nanny’ operation for their academically unqualified disciples. For many who fund the Austrian School of Economics, the ‘invisible hand’ of ‘God’ guides (and is in alliance with) the ‘free’ market. At a Hillsdale College Lecture on ‘Christianity, The Market and Beyond,’ Davenport (1981) explained that Hayek, for one, reminds us that any free society must be grounded in a certain moral ‘consensus.’ He even argues in his monumental Constitution of Liberty for the need of a ‘meta-legal’ system which stands above all man-made laws and even above all man-made constitutions.

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Meta-legal? That is a strange phrase to be issuing from the pen of our foremost libertarian thinker. For it seems to open the door to speculations (speculo, speculate—to observe) that reach beyond the normal purview of science—the meta-physics of Aristotle, for instance, which dealt with such unhandy subjects as the ‘Unmoved Mover’ or God. Or with the affirmations of the Old Testament prophets that a God and not always a jealous God exists.

Davenport concluded: ‘Let us hope that this seminar and the reemphasis of Christian teaching at Hillsdale will speed this process of reconciliation, and that like Virgil and Dante after descending into the Inferno, we shall emerge again to glimpse the stars.’ For public consumption, Davenport (1985) told National Review readers that he was ‘a Christian’; but in a private circular letter, Davenport (23 July 1968) promoted Christianity pour encourager les autres. He defended ‘free association’—that is, both segregation and apartheid—because ‘Negro and white relations should be left wholly voluntary.’ Referring to the ‘necessity of order to preserve voluntarism and liberty,’ Davenport stated: ‘The breakdown of order … goes far beyond the Negro problem.’ The ‘reign of ethical relativity,’ he suggested, may be the product of one further development – the breakdown or the gradual disappearance of religion. We live in a secular age where homage is paid to all kinds of giddy rational abstractions, - Democracy, One-Man OneVote, Equality, and of course Freedom from all and for all, with diminishing signs of homage to the one abstraction, or rather concretion, which could act as a ground [Davenport’s emphasis] for values and purpose, whether called God, the Creator, the Universal Mind or what have you. Yet without such ground I wonder whether values and purpose can survive, and I speak as one who sometimes finds Christianity a pretty distant lighthouse.3

Using one of his dissembling words, ‘curious,’ Hayek (1978)—with contempt—confirmed Davenport’s insight:

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In theory I am a Roman Catholic. When I fill out the form I say ‘Roman Catholic,’ merely because this is the tradition in which I have grown up. I don’t believe a word of it. [laughter] … I am in a curious conflict because I have very strong positive feelings on the need of an ‘un-understood’ moral tradition, but all the factual assertions of religion, which are crude because they all believe in ghosts of some kind, have become completely unintelligible to me. I can never sympathize with it, still less explain it.4

Hayek (1975) told Face the Press: ‘See, all inflations have been stopped by people who created or believed in a very naive form of the Quantity Theory, and acted on that. It may be wrong, but it is the only adequate theory effective to stop an inflation.’ Hayek (1977, 14, 15) told Ebeling that belief was unrelated to ‘accurate’ theory: ‘I do not believe that the quantity theory [of money] is really theoretically accurate, but I pray to God that people never cease to believe in it.’ It would be a bargain to follow his funding model: ‘I think Americans have long been mistaken that propaganda [emphasis added] must be expensive because it must from the beginning be directed to the masses – now that is very expensive, and it’s also useless. The masses take their information, not from educational institutions, but from the daily press and the media. If you want to be successful you have to educate what I call the intellectuals – the makers of opinions. That ought not to be a very expensive business, but a very considerable intellectual effort.’ According to the MPS Statement of Aims: ‘The group does not aspire to conduct propaganda.’5 Yet the archives suggest that fundraising propaganda may be its sine qua non. In a commentary on the 1983 MPS session on ‘Communicating the Ideas of a Free Society,’ ‘John and Chuck seemed to say that resources should be targeted to certain groups where pay offs could be better expected.’6 And after The Wall Street Journal (10 January 1995) identified the former President of CocaCola Foods, Harry Teasley Jr. as a ‘giver,’ Feulner received a copy of the article with a note: ‘This is exactly [emphasis in original] the kind of member MPS needs.’7 The supposed ‘missile gap’ had a religious equivalent: Lic Agustin Navarro (22 July 1960) told Hunold that the Christian world has a doctrine—the preservation of human ‘liberty,’ and ‘faith’ in

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the high and moral values of the Western World, an economic doctrine based on the ‘SOVEREIGNTY OF THE CONSUMER [capitals in original]’; while their opponents had an enormous amount of money for ‘propaganda’ (in the press, the ‘movies’ etc.). Should ‘think’ tanks economists ‘think’ about the social optimum or the private optimality of their donors? Asian children with Agent Orange-related injuries illustrate the problem of Pigouvian negative externalities. In 1984, a class action suit against Dow Chemicals and Monsanto produced an out-of-court settlement of $180 million for American victims of Agent Orange; Monsanto also stands accused of bio-piracy (Vidal 2000). Richard Duesenberg (14 September 1987), Monsanto’s Senior Vice President, General Counsel and Secretary, asked the editor of the Mont Pelerin Society Newsletter to republish his chairman’s message to the American Bar Association which praised the libertarian devotion to the ‘moral’ foundations and the ‘civil rights’ of private property.8 ‘Von’ Hayek (1978) defined Austrian classical liberalism: ‘I believe in democracy as a system of peaceful change of government; but that’s all its whole advantage is, no other. It just makes it possible to get rid of what government we [emphasis added] dislike.’9 In contrast, the British classical liberal, Richard Cobden (1804–1865), welcomed the advance of democracy as an assault on the intergenerational privileges of ‘aristocratic plunderers’ (Edsall 1986, 52–53). In the 1950s, Fisher told Koether (2000, 4): ‘Hayek wants me to devote my money and energies to setting up institutes for the propagation and dissemination of free-market ideas all around the world.’ At the time, Hayek was searching for ways to finance his post-‘bootleg’-divorce life. The IEA was established in 1955 and began operations shortly afterwards. In 1962, Hayek retired from the University of Chicago and sought additional sources of tax-exempt donations. In ‘The Moral Element in Free Enterprise,’ Hayek (1962) promoted a choice-theoretic approach to voluntary transfers: ‘we are free because the success of our daily efforts does not depend on whether particular people like us, or our principles, or our religion, or our manners, and because we [Hayek’s emphasis] can decide whether the material reward others are prepared to pay for our services makes it worth while for us to render them.’

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For his Freeman and National Association of Manufacturers audience, Hayek (1962) related this to the religiosity of those who he hoped would continue to fund him: ‘All that we can say is that the values we hold are the product of freedom, that in particular the Christian values had to assert themselves through men who successfully resisted coercion by government, and that it is to the desire to be able to follow one’s own moral convictions that we owe the modern safeguards of individual freedom. Perhaps we can add to this that only societies which hold moral values essentially similar to our own have survived as free societies, while in others freedom has perished.’ According to Hayek (1978), the composition of Viennese intellectual groups was connected with what you might call the race problem, the anti-Semitism. There was a purely non-Jewish group; there was an almost purely Jewish group; and there was a small intermediate group where the two groups mixed.’10 Hayek’s (1994, 61) own family was in the ‘purely Christian group; but in the university context I entered into the mixed group.’ The phrase ‘purely Christian’ appears to mean proto-Nazi or anti-Semitic (Chapter 2, above). Hitler sought to make Austro-Germany ‘Great Again.’ Operation Barbarossa (named after the Crusading Holy Roman Emperor, Frederick Barbarossa) was a Crusade against Soviet Communism, to capture Slavs for slave labour, and seize the oil reserves of the Caucasus. Fred Koch built the Third Reich’s third-largest oil refinery, supplied engineering expertise to the Soviet Communists, and co-founded the John Birch Society (Mayer 2010, 2016). In the same year as Mises’ (1985 [1927]) promotion of ‘Fascism,’ violence erupted in New York led by the Ku Klux Klan and sympathizers of Italian Fascism. One thousand white-robed Klansmen marched through the Jamaica neighbourhood of Queens, after which seven men—including Fred Trump—were arrested (Bump 2016). The Fred C. Koch Foundation funded both the Towards Liberty Mises Festschrift (Hayek et al. 1971) plus the 1974 Austrian revivalist conference: Pearson (29 September 1973) followed-up on Charles Koch’s earlier (10 August 1973) letter to Hayek offering all expenses plus an honorarium of $1000 to attend.11 According to Shenoy (2003, 1), the person entrusted with launching the Austrian campaign against ‘waste, fraud and taxpayer abuse’ used Koch’s tax-exempt funds for

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personal pecuniary advantage: ‘The chap who organized the conference, who shall remain nameless, owed the owner of the hotel some money, so the conference killed two birds with one stone.’ In 2013, more than 32,000 people died on US roads; but in the first thirteen years of the twenty-first century, the per capita motor vehicle death rate declined by 31% in the United States and by 56% in 19 other wealthy countries—with Spain (75.1%) and Denmark (63.5%) leading the race.12 This reduction has been achieved by what ‘free’ market promoters denigrate as the Nanny State—seatbelts on the road to serfdom. ‘The Coase Theorem’ offers a ‘free’ market alternative that doesn’t involve the expense of traffic lights and highway patrols, not the suppression of liberty (obeying speed limits and prohibiting drug, alcohol and cell phone use). With Hayek’s de-nationalized money (‘The Hayek’ or ‘The Solid’) and zero transaction costs (telepathic cash transfers?), drugged, speeding cell phone users could negotiate with an infinite number of fellow road users: externalities could be internalized. In 1919, what Hayek (1978) denigrated as a ‘republic of peasants and workers’ had forcibly imposed ‘equal before the law in all respects’ on Habsburg nobles (Chapter 2, above).13 But some remained ‘more equal than others.’ From 1877 to the Civil Rights Acts of the 1960s, law enforcement officers (some KKK-connected) subverted the Constitution of the United States by preventing the implementation of the Reconstruction Amendments.14 And of the 351 people exonerated by DNA evidence produced by the Innocence Project, about 70% were ‘people of color.’15 There continues to be a widespread suspicion among African-Americans that ‘law enforcement’ is not colour blind. ‘Spare the rod and spoil the child’? By his own elliptical account, Bartley was set-off on the road to homosexuality and the ‘free’ market as a consequence of unjust parental beatings (Leeson 2013, Chapter 9): what drove North—a self-appointed member of the First Estate who defers to a higher ‘law’—to embrace public stoning and the ‘free’ market? Should FBI officers—like North’s father—respect the ‘law of the land’ and protect the public; or should they endanger public safety to serve a higher purpose? North (2010, 240)—presumably one of Rothbard’s ‘We want externalities’ chanters—reported: ‘To give you some idea of how conservative dad was, when the U.S. Government

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suggested that employees drive with their lights on out of respect to the anniversary of Martin Luther King’s assassination, dad drove home that evening with his lights off, risking a ticket and a collision.’ Those who fund the ‘free’ market seek to avoid full-cost pricing (Pigouvian externality taxes); and those who promote it seek subsidies from the taxpayer whilst giving the appearance of being pathologically opposed to paying taxes. Hayek (1978) told Robert Bork, Nixon’s accomplice in the ‘Saturday Night Massacre,’ that ‘Legislation ought to be a safeguard of freedom, but it can be used to suppress freedom. That’s why we need principled legislation.’ With respect to ‘the problem of expropriation for any purpose,’ he reflected: ‘That, of course, is the most severe infringement of the principle of private property, and one where I have to admit there are circumstances in which it is inevitable. It’s a most difficult point to draw my line. I think the only precaution I would wish is by way of the rules of compensation; I would even be inclined to devise some multiple compensation in the case of expropriation to put a required limit on expropriation.’16 According to ‘consumer sovereignty’ promoters, compulsory restraints are ‘seatbelts on the Road to Serfdom.’ In 1979, three years after it became compulsory in West Germany for drivers to wear seatbelts, Hayek wrote-off his car in the Black Forest. He was saved from injury by his seatbelt, while his wife (who had not been restrained) suffered serious injuries. Helene complained that her husband had made a statement to the police about an imaginary on-coming car which had caused the crash: Hayek was so angry that he threatened to leave her. Helene refused to be driven by her husband again: ‘neither the car nor the driver was, as far as I know, ever discovered’ (Cubitt 2006, 35–36). Nine years of intensive investigation reveals that most, if not all, ‘free’ market promoters view ‘liberty’ as a getaway car. On 20 May 1975, Hayek took the ‘free’ market exit after a hit-and-run accident. When apprehended, Hayek perjured himself: • he was visiting Stanford University to work on a ‘special project related to his Nobel Peace Prize’; • was ‘totally deaf in one ear’; and • had ‘understood from spectators that no damage had been done.’

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But the statement provided by one of these ‘spectators’ documented both the damage (including ‘three metal fence posts’) and the suggestion that he made to Hayek after the accident that he leave a note with his name and contact details on the ‘two crushed bicycles.’ But Hayek had not left a note and had been apprehended only because one of the ‘spectators’ took down his registration number. • Describing himself as ‘Dr. von Hayek,’ he ‘admitted having some difficulty with the English language’ but failed to report that he had lived in England (1931–1950) and the U.S. (1950–1962) and was a British citizen. Instead, he insisted that he was ‘an Austrian citizen.’ Hayek’s frauds are promoted by those with Rand-cultivated sensory limitations. Hayek’s Sensory Order is remembered by Richard Stern at the University of Chicago: he ‘looked unapproachable, haughty, as if he were sniffing something disagreeable in his mustache, although I didn’t feel patronized by him’ (cited by Ebenstein 2003, 180). And when Hayek stepped out of the car, he didn’t see the two crushed bicycles; nor the three damaged metal fence posts; nor (because he was deaf in one ear) had he heard the ‘spectator’ suggest he leave his contact details. Although leaving the scene of an accident is a criminal offense, the end result was that ‘due to the special circumstances involved in this particular incident, no further action seems necessary.’ The damages were paid for by a tax-exempt educational charity.17 Yet a month later, Hayek (June 22, 1975) appeared on Face the Press (apparently able to hear all comments, suggestions and questions) to promote a ‘very naive form’ of action-promoting knowledge. That Hayek—a tax-evading kleptocrat—should perjure himself should come as no surprise. What is informative is the pattern prediction of his lies. The UPI press statement (10 October 1974) accompanying his Nobel Prize stated that ‘speaking from his home in Salzburg,’ ‘von Hayek, a British subject, gave up his Austrian citizenship in the 1930s to protest Nazism in his native land’; and, one of the few economists to predicted [sic] the 1929 economic crash, cited deep similarities today to the situation 45 years ago.’18 Three decades previously, Hayek (1945)—writing from Cambridge and describing himself as an ‘ex-Austrian’—had described his

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experiences of America in 1923: ‘Yes, I have stood penniless in the queue of a labour exchange, vainly seeking a job, and that living in a foreign country where I hardly spoke the language and had no friends.’ This fanciful reconstruction of his first visit to New York appears to have been a pastiche of Orwell’s (1933) Down and Out in Paris and London (Leeson 2015a, Chapter 6). On a 1945 Road to Serfdom promotional tour of America, Hayek (1978) ‘began with a tone of profound conviction, not knowing how I would end the sentence, and it turned out that the American public is an exceedingly grateful and easy public … you see, the New York audience apparently was a largely favorable one, which helped me. I didn’t know in the end what I had said, but evidently it was a very successful lecture … I think I ought to have added that what I did in America was a very corrupting experience. You become an actor, and I didn’t know I had it in me. But given the opportunity to play with an audience, I began enjoying it. [laughter]’19 The philosophy of one of the subjects of ‘Deacon’ McCormick’s (1976, 189–190) Taken for a Ride: The History of Cons and Con-men was that ‘you can never cheat an honest man. A truly honest man would never have fallen for any of my schemes. I never fleeced anyone who could not afford my price for a lesson in honesty.’ Hayek (1980, 10) promoted ‘the morals of the market’; for ‘free’ market donors, funding him was a form of conspicuous consumption—for Hayek they were suckers to be milked. How many tax-exempt charities believed that they were solely or largely responsible for funding Hayek? The Cato Policy Report (March/April 1985) proudly stated that Hayek was a Cato Distinguished Senior Fellow: the ‘Cato Institution has provided financial support for his work for several years.’20 From the Charles Koch Foundation, Pearson (22 March 1976) and Edward Crane III (31 October 1977) assured Hayek that they would provide the ‘premium’ funds to hire a secretary—which they did.21 Yet Cubitt (2006, 10, 69) reported that there was a blockage in the flow of tax-deductible donations to her—she couldn’t make an adequate ‘free’ market income because she worked full-time for him and was ‘almost permanently in debt until about three years before Hayek’s death.’22 Having declared that ‘what we lack is a liberal Utopia,’ Hayek (1949, 432–433; 1976b, 13) told an IEA audience: ‘One of our chief problems

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will be to protect our money against those economists who will continue to offer their quack remedies, the short-term effectiveness of which will continue to ensure them popularity. It will survive among blind doctrinaires who have always been convinced that they have the key to salvation.’23 In the Cato Policy Report, Hayek (1984) bemoaned ‘government abuses of money.’ Cubitt (2006, 10, 122) reported that when he was caught in the ‘cheating matter’—stealing, or double-dipping, from ‘educational charities’ to maintain his aristocratic lifestyle— Hayek ‘just laughed, said he did not mind in the least, that all his professional considerations had been based on financial considerations.’ When Morris complained to Cubitt about being ‘deceived [,] Hayek laughed, and told me that he had wanted to have nothing to do with this but did not mind being told about it as an anecdote.’ The second general editor of The Collected Works of F.A. Hayek was barred from attending MPS meetings—apparently because he was a homosexual (Chapter 5, below). The editor of The Definitive Edition of The Road to Serfdom owes a special debt to Mrs. Dorothy Morris of the Morris Foundation, Little Rock, who provided me with the ‘seed money’ for the project … Walter Morris was instrumental in the creation of the Collected Works [of F. A. Hayek] project, and the Morris Foundation has been constant in its support throughout the years. I first sought financial support for the project at the Mont Pelerin meeting. (Caldwell 2007, x)

Caldwell is funded by ‘Thomas Smith Foundation/John Locke Foundation Grant, 2016–2018, Thomas Smith Foundation Grant (CHOPE), 20112017, NEH Summer Institute Grant (CHOPE), 2010, 2013, 2016, Institute for New Economic Thinking Grant (CHOPE), 2011-2013, Templeton Freedom Award for University-Based Center (CHOPE), 2012, Earhart Foundation Grant (CHOPE), 2008-2010, 2012-2015, John W. Pope Foundation Grant (CHOPE) 2008-present, Earhart Foundation Research Fellowships (5) 2003-present, Ludwig M. Lachmann Research Fellowship, London School of Economics, 2000-2001, 2012-2015.’24 In his February 1962 ‘Valedictory,’ Hayek melodramatically announced that he was about to resign from the Society he had founded.

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Two people had ‘wantonly’ destroyed it—Röpke (the serving MPS President) and Hunold, MPS Secretary and author of Freedom and Serfdom: An Anthology of Western Thought (1961a), ‘How Mises changed my mind’ (1961b), and ‘How the Mont Pelerin Society Lost it’s Soul’ (1962). After Hayek (1947–1961) relinquished the MPS Presidency (and Röpke resigned), he was succeeded by Jewkes (1962–1964), Bruno Leoni (1967), Shenfield (1972–1974), Manuel Ayau (1978–1980), Chiaki Nishiyama (1980–1982), and Harris (1982–1984).25 Leoni (1913–1967) was hacked to death by an underworld business associate26; Shenfield (1983), a lobbyist for the Confederation of British Industry (motto: ‘The Voice of Industry’) declared that ‘The world is ruled by ideas, not interests’; Hayek believed Nishiyama to be a thief (Cubitt 2006, 22); Harris was a director of Murdoch’s The Times (1988–2001); and Ayau (1984) explained that anything that threatened the Latin American neo-feudal ‘spontaneous’ order (such as land reform) would lead to ‘violence’ (Chapter 5, below). Hayek promoted the deflation that assisted Hitler’s rise and which led to World War II, the division and military occupation of Germany, and fixed exchange rates, policed by the International Monetary Fund (Leeson 2003). Two Presidents of reunited German, Roman Herzog (1994–1999) and Horst Köhler (2004–2010), chaired the Board of Directors of the Friedrich-August-von-Hayek-Stiftung (both from the Christian Democratic Union; Köhler had been IMF Managing Director)27; Othmar Issing, Chief Economist of the European Central Bank and an international advisor to Goldman Sachs, also sits on the Board of Directors. In accepting the 2003 Hayek Prize from the Friedrich-August-von-Hayek-Stiftung, Lady Margaret Thatcher stated: Friedrich von Hayek was an inspiration for me in the 1980s, when the government which I led sought to reverse the malign effects of socialism on Britain’s economy and society. Hayek did not offer a set of policies. Rather, he offered an account of what was fundamentally wrong and he described how a better system would work. Thus he gave us the commodity which was then in shortest supply: he gave us hope … His writings remain a star by which the governments of free nations everywhere would be well advised to steer their course. Hayek is a voice of wisdom for our time, and for all time. We should listen to him.28

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The MPS (1947–)—already an arm of employer trade unions— appeared to become an arm of the State. Prime Minister Thatcher ennobled two of the three IEA creators: Sir Anthony Fisher and Lord Harris of High Cross. According to Andy Beckett (2009, 272–278), Harris informed him that in the 1970s the IEA won four legal actions for ‘libel against papers and politicians who mistook the findings of disinterested scholarship for the partisan promotion of interests.’ At the IEA, Harris and Seldon disagreed in private, but not in public, because: ‘There had to be a collective view.’ In the 1960s, the IEA argued that British unemployment and poverty belonged to a ‘vanished period’; and in the 1970s, they reversed their posture—arguing that Britain was terminally weak. Both required the ‘free’ market solution—for Harris, the market was a ‘cure all.’ When asked if IEA ‘certainty’ was ‘akin to religion belief,’ Harris replied: ‘Yes.’ After attending regular IEA lunches, Thatcher, he asserted, started ‘marking out a new path for Britain.’ Shenfield (1988 [1968]) revealed his attachment to disinterested scholarship in his republished ‘On the State of Bad Economics’: ‘What is to my mind a most encouraging development since 1968 is that the field of bad economists has become pretty thin in terms of influence’; although with ‘Galbraith, such is the charm of charlatanry, continues to be thought by the general public to be a notable, perhaps distinguished, economist.’ Shenfield reported that ‘Loss of national pride and confidence produces a tailor-made situation perhaps for a hero on a white horse, perhaps for a man with the fastest gun, or perhaps for the demagogue with the most silvery tongue.’ According to Shenfield, Galbraith had a ‘smartypants mind’ with a ‘brilliant formula … So brilliant that it induced The Times, for example, to describe the 1966 Reith lectures as an intellectual tour de force! Oh! my [J.A.] Hobson, my [Thorstein] Veblen and Henry George long ago! How you are needed now!’ According to Mises (1951 [1932], 87, 104, n. 1), the Utopian Socialist, Charles Fourier, ‘suffered from a grave psychosis.’ As Ludwig von Mises Professor of Economics at Hillsdale College, Shenfield (1983) described ‘intoxicated utopians’: ‘intellectual pygmies like Edward Bellamy, William Morris and Charles Fourier, and numerous others like Samuel Butler and Aldous Huxley in between. And Karl Marx.’ In contrast, ‘Look now at the men who laid the foundations of

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the free society—Locke, Hume, Smith, Burke, and especially Madison and his fellow realists at the 1787 Constitutional Convention. There was not a whiff of utopianism in all of them put together.’ The 1773 Boston Tea Party was a rebellion against the monopoly power of the British East India Company and the taxation imposed (without representation) by the British to bolster their Empire. And the 1776 Declaration of Independence was a battle against government monopolized by kings, hereditary aristocrats and wealthy gentlemen; undertaken in the name of ‘the people’—a category that was later extended to include women (the 19th Amendment, 1920) and AfricanAmericans (Reconstruction, 1865–1977; and the 1965 Voting Rights Act). In contrast, the Koch-funded Tea Party is a tax-exempt salute to the Österreichische intellectual Empire: the Koch-funded 1976 revivalist meeting was held in Windsor Castle. After the King of Sweden awarded the 1974 Nobel Prize for Economic Science to a hereditary aristocrat, ‘free’ marketeers described themselves as being ‘on a wave’ (Blundell 2014, 99). The 1975 Hillsdale College MPS meeting was devoted to ‘von’ Hayek: ‘Few other scholars, if any, have adorned the social sciences in our time as Hayek has done,’ as Shenfield asserted in the brochure.29 According to an article in Buckley’s National Review, the climax of this tax-exempt meeting was Roche III toasting Elisabeth II accompanied by a mood of sheer bliss … as if an Invisible Hand had prankishly arranged a sneak preview of Utopia … Such fellowship is of course much enhanced in the vicinity of the bar, which was open three times a day … What we could not expect was the pampering and elegant food that attended us from beginning to end … One fellow disappeared into the service regions with a bottle of champagne for the staffers, and almost immediately a fresh bottle appeared on his table. It was magic … Clearly, unseen benefactors had picked up the tab; otherwise Hillsdale’s budget would have rocketed into federal orbit … It was lovely. (Wheeler 1975)

After the 1979 MPS Madrid meeting, a Memorandum to Directors referred to Hayek being ‘greeted with a loud round of applause’ as delegates tucked into a ‘large and delicious feast.’30 The 1997 MPS ‘Special

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Gathering’ cost $252,461 which included $140,336 on ‘Hotels/Meals/ Receptions,’ $20,498 on ‘Excursions, dinner and souvenirs,’ and $1962 on ‘photographs.’31

2 Faith-Based ‘Knowledge’ Versus Education Re-feudalisation requires a stable equilibrium—the ‘lower’ orders must accept that they are ‘inferior’ (Mises 2007 [1958], 11). The public health community had long known that children were at risk of serious brain damage and death from ingesting lead poisoning: in Deceit and Denial: The Deadly Politics of Industrial Pollution, Gerald Markowitz and David Rosner (2001) document the public relations campaign that the ‘free’ market lead industry undertook to convince Americans to use their deadly product in their homes and cars. Mises (1985 [1927], 115) provided a more secure, long-run, neo-feudal foundation for Liberalism in the [Austrian] Classical Tradition: There is, in fact, only one solution: the state, the government, the laws must not in any way concern themselves with schooling or education. Public funds must not be used for such purposes. The rearing and instruction of youth must be left entirely to parents and to private associations and institutions. It is better that a number of boys grow up without formal education than that they enjoy the benefit of schooling only to run the risk, once they have grown up, of being killed or maimed. A healthy illiterate is always better than a literate cripple.

Austrians describe non-Austrians (‘God-hating humanists’) as eating from ‘The Public Trough’ (e.g. Bruce Bartlett’s Libertarian Review column). As North (1986, viii) put it: The free food is called ‘free education.’

Humanists ‘make the adult Christian hogs pay for the fencing and the humanist slop in the trough. This system is called taxation. The shortsighted pigs pay for the slaughter of their own offspring. Pigs love their

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free slop, even when it isn’t free. Warn them that the slop in the trough is a trap for their piglets, and you will hear a lot of outraged squealing.’ Ebeling (2014) was outraged about the ‘swarm of locust-like lobbyists who lucratively exist for only one purpose: to gain for the special interest clients who handsomely pay them large portions of the wealth and income of those taxpayers and producers whose peaceful and productive efforts are the only source of the privileges and favours the plunderers wish to obtain. They are the political class of career politicians and entrenched bureaucrats who have incomes, wealth and positions simply due to their control of the levers of government power; power they gives them control over the success or failure, the life and death of every honest, hardworking and peaceful and productive worker, businessman, and citizen, and who are squeezed to feed the financial trough at which the political plunders gorge themselves.’ Referring to ‘The Relevance Today of Hayek’s Warnings,’ Ebeling continued: ‘Think of the mounting corruption from special interest groups feeding at the trough of government spending.’ Yet Ebeling was describing those who fund the ‘free’ market. Charles Koch decried cronyism as ‘nothing more than welfare for the rich and powerful’; but his company worked ‘hand in glove’ with the Bush Administration (2001–2009). And an FOI request revealed that ‘Correspondence, contacts and visits among Koch Industries representatives and the Bush White House generated nearly 20,000 pages of records.’ In 2007, a ‘fiercely anti-regulatory academic,’ Susan Dudley, from the Koch-funded GMU Mercatus Center became the Bush Administration’s ‘top regulatory official’ (Dickinson 2014). The Wall Street Journal non-editorial pages reported that ‘14 of the 23 rules’ the Bush White House chose for its ‘hit list’ to eliminate or modify were ‘Mercatus entries – a record that flabbergasted Washington lobbying heavyweights.’ Mercatus was the ‘most important think tank you’ve never heard of ’ (Davis 2004). But some had heard of it: ExxonMobil donated $330,000 (1998–2012).32 Austrians believe themselves to be fed by the invisible hand in what they call ‘clusters,’ directly funded by the taxpayer or via tax-exempt donations. In conversation, Austrian Professors of Economics refer to their academic-market failure colleagues as ‘lifeboat’ Austrians—fed as

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Fellows and Senior Fellows at libertarian ‘think’ tanks; and funded by those contemptuously referred to as emotionally ‘needy,’ ‘business conservative’ donors. Mises (1956, 20–21) complained that the ‘exclusivism practiced by the American rich has made them in a certain sense outcasts. They may take a vain pride in their own distinction. What they fail to see is that their self-chosen segregation isolates them and kindles animosities which make the intellectuals inclined to favor anticapitalistic policies.’ Of the founding MPS members, Loren Miller may have been the most influential—he convinced wealthy businessmen to support the ‘free’ market: William Volker and Harold Luhnow (William Volker Charities Fund), Pierre Goodrich (Liberty Fund) and Richard Earhart (Earhart Foundation); plus Jasper Crane (du Pont), B.E. Hutchison (Chrysler) and Henry Weaver (General Electric). The MPS provides both a gentrification process and a tribal ‘base’ through which (in ascribed status terms) the television-loving Boettke (from the New Jersey lower-middle class) could hobnob with Shenoy (high-caste and tenured, but academically unqualified) and Leube (the estranged son of a cement merchant who claims that The Sound of Music was filmed on his property). According to Hayek, ‘Dr.’ Leube’s intellectual deficiencies prevented him from completing his mature age undergraduate degree at the University of Salzburg; and Boettke had one attempt to obtain post-secondary educational qualifications outside the ‘free’ market (he repeated his first college year by relocating to Grove City). The person ‘outside of academy who has influenced’ Boettke (2010a) ‘most in my outlook it is a businessman in investment—Edward Weick—and a foundation representative/businessman/author/philanthropist—Richard Cornuelle.’ Richard and Herbert Cornuelle were employed by FEE (Hülsmann 2007, 868)—a ‘propaganda’ set-up, according to Hayek (Chapter 1, above). In 1953, Herbert left to become vice president of the Hawaiian Pineapple Company (later Dole Pineapple Company), becoming president in 1958. In 1963, he join the neo-feudal United Fruit Company as a vice president; becoming president in 1967 (Meier 1996). Richard was FEE’s ‘Liaison Officer’ (Hülsmann 2007, 868)—which presumably means he liaised with fund-raisers plus ‘disinterested,’ high

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opportunity cost ‘scholars’ like Boettke. In Reclaiming the American Dream, Richard Cornuelle (2011 [1965], 172) documented Mises’ martyrdom: he could ‘afford only one subscription to the opera and he and his wife attended alternate performances.’ The evidence reveals that it was snobbery which determined that ‘von’ Mises must sit in a ‘good’ seat: In the late-1940s it was very difficult to get a good seat, and only with the help of friends who ‘had connections’ could I get an orchestra seat in the third row … I did not have enough money to buy two tickets, and for more than ten years poor Lu, with something of a heavy heart, had to go alone, until one day he succeeded in getting a second seat … we kept up the subscription to the Metropolitan Opera that I had given him years before. Thanks to our [emphasis added] good seats, he could follow the performances as attentively as before. The opera was the highlight of his later years. (Mises 1984, 144, 169)

The archives reveal that the MPS is a highly successful fund-raising operation. Secretary Hunold sent innumerable letters to wealthy individuals and those with access to funds—for example to Richard Ware (10 November 1958), First National Bank, inviting him to attend the next MPS meeting. From the Relm Foundation, Ware (28 April 1959) then sent $7662 in travel grants. Richard Cornuelle (20 August 1959) alerted Hunold to the Lilly Endowment which had $200 million and a new director, Richard McGinnis.33 Among those Hunold (10 November 1958) invited to attend MPS meeting were the President of du Pont de Nemour,34 and Kenneth Redmond, the President of United Fruit Company.35 Hunold (November 1958) told Machlup that he was travelling around Guatemala and Panama as a ‘guest’ of United Fruit.36 In 1957, J. Howard Pew (President of Sun Oil Company, founder of the J. Howard Pew Freedom Trust, funder of FEE, MPS, American Liberty League, the Liberty Lobby, and Grove City College) donated $5000, U.S. Steel $1000, Frederick Nymeyer Foundation $1000, and United Fruit $1000.37 Later, Richard M. Larry (Scaife Family Charitable Trusts) and the Chairman of Oppenheimer Capital Corp were recruited (Hartwell 1995, 66).38 Richard Scaife was invited to attend the 1986 MPS meeting.39 Ware (2 March 1987) told Hartwell

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that Earhart had donated $245,820 to MPS between 1957 and 1986— which he believed to be a ‘solid’ investment in ‘human capital.’40 When John McCarty left Pepperdine University to become Coors Brewery Vice President for Corporate Public Affairs, he automatically tapped into the Coors Foundation for MPS-funding.41 Burns become Chair of the Federal Reserve on 1 February 1970; Federal Reserve economist John Mason (9 July 1970) then asked for MPS membership42; James Pearse (Associate Director of Research at the Dallas Fed) was nominated for membership by Gerald O’Driscoll (also of the Dallas Fed)43; as were Lee Hoskins and Dieter Loewe (both of the Cleveland Fed).44 Steve Prowse (Federal Reserve Board of Governors) was awarded a Bradley Fellowship to attend an MPS meeting.45 Richard Corneulle (2011 [1965], 152) described the tax-exempt foundation as ‘an instrument forged by citizens who transfer profit from the commercial sector and put it directly to work as risk capital for the general betterment of society.’ How does the MPS spend their tax-exempt funds? Leoni (5 April 1962) thanked Crane for obtaining funds from Pew and asked that he contact two Belgian industrialists (Count Baron René Boël and Ernest Solvay) to obtain travel expenses exclusively for those American members of the MPS Council who would vote for Hunold’s expulsion. He also asked if Crane had had any success extracting additional funds from Relm and Earhart.46 Some funds were earmarked for renovations to Hayek’s apartment: Count Maximilian Thurn organized ‘The F.A. Hayek Fund’ to facilitate upward mobility (an elevator).47 According to Hamowy (2003): ‘As is customary, the Mt. Pelerin meetings were held in one of the most expensive hotels in the city as befitted the fact that almost all attendees were either think-tank executives traveling on expense accounts, South American latifundia owners, for whom hundred-dollar bills were small change, or the officers of the Society itself, a self-perpetuating oligarchy who, thanks to its members’ dues, traveled around the world in first-class accommodations.’ A 1985–1986 editorial in the IEA’s Economic Affairs (‘All Libertarians Now?’) celebrated the ‘rolling back of the state’ and the victory of the ‘intermittently contagious’ notions of ‘economic liberty.’ After winning the 1986 Nobel Prize for his critique of self-interested politicians

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and bureaucrats, James Buchanan (6 May 1988) informed Nisiyama that the ‘free’ market would roll forward—he would be coming to the Japanese MPS meeting with his ‘assistant’ (who would not be paying a registration fee) in addition to his wife, they would stay at the Imperial Hotel in Tokyo and the Takaragaike Prince Hotel in Kyoto which the MPS would pay for.48 The Board of Directors travelled ‘Business class’ to the 1999 MPS meeting.49 Peter Bernholz (20 April 1988) reported that he had been made promises about funding to the Japanese MPS meeting by Nishiyama—but needed a ‘free’ business class airfare. Numerous others were also made extravagant promises. Begging letters (25 September 1987) were then sent to the Presidents of 15 Japanese banks asking for US$20,000 each to fund the MPS meeting. The banks were reminded that the MPS opposed ‘all forms of protectionism’—a rather sensitive issue at that time. Were the MPS implying that they would lobby against protectionism measures against Japanese imports? The Japanese Prime Minister was scheduled to give the Opening MPS Address.50 What does the ‘free’ market look like? During President Trump’s visit to Saudi Arabia, Commerce Secretary Wilbur Ross described this theocratic police state: ‘There’s no question that they’re liberalizing their society. And I think the other thing that was fascinating to me: There was not a single hint of a protester anywhere there during the whole time we were there. Not one guy with a bad placard.’51 Likewise, Hayek (3 August 1978) told readers of The Times that he had ‘not been able to find a single person even in much maligned Chile who did not agree that personal freedom was much greater under Pinochet than it had been under Allende.’ 3197 Chileans were murdered, 20,000 were officially exiled and their passports marked with an ‘L,’ and about 180,000 fled into exile—about 2% of the population (Wright and Oñate 2005, 57; Montes 2015, 7). In the planning notes for the 1991 MPS/FREE Montana meeting, it was noted that the MPS Executive Committee should ‘always get special treatment, nice rooms, etc. Becker especially is a prima donna.’52 At the 1992 MPS meeting, over nine hundred tax-exempt dollars were devoted to a ‘Business Class’ breakfast for Directors.53 Friedman (4 June 1994) told Harris that he and Rose would not attend the

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Cannes meeting because there would be ‘too many people and too l­ittle intellectual discussion for our taste.’ Symbolically, perhaps, this was ­ Boettke’s first MPS meeting—he stayed at the Hotel Majestic.54

3 Trade Union Fraternity Brothers Of the six official biographers and/or ‘free’ market monopolists of the Hayek Archives: Kresge, who has an undergraduate degree, operated a construction company; ‘Dr.’ Leube failed to pass his undergraduate units in economics (but Hayek got him a Professorship anyway); after five years studying undergraduate economics, Shenoy was awarded a lower second class degree in economic history—below the conventional cut-off point for entry into graduate school (Hayek got her a tenured academic position also); Caldwell is funded by Duke University plus what Robert Brulle (2014, 687, Fig. 1, 681) describes as the ‘Climate Change Counter Movement’ (Chapter 9, below); and Bartley was obliged to resign his full-time University of Pittsburgh Professorship after it was discovered that he was simultaneously being paid full-time by CSU Hayward/East Bay (Theroux 2015). In addition to her full-time salary from the University of Newcastle, Shenoy (2003) was ‘pleased to be working at the Mises Institute right now … assuredly if we do not all hang together, we will hang separately.’ As early as 1977, she was referred to as ‘Dr Shenoy’ in FEE circles;55 and in an IEA press release on privatization, their employee, ‘Dr Sudha Shenoy,’ was listed as the authority to be contacted.56 Hayek told his second wife that Shenoy ‘could not be trusted since she was only an Indian’ (Cubitt 2006, 344). The fifth official biographer (Caldwell 2004, 317, n. 34; 2005, 56; 2008, 701–702) thrice repeated a malicious—and false—empirical ‘fact’ relating to the third, Bartley, provided to him by the first, Shenoy (Leeson 2013, 202). For her non-existent ‘Order of Liberty’ biography, Shenoy borrowed and—despite repeated requests—refused to return Hayek’s family heirlooms. At the 1975 Hartford conference, Shenoy presented a paper on capital theory to which Leland B. Yeager (who may have taught her at the University of Virginia) provided a ‘commentary,’

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something on the lines of: ‘This paper is not worth any comment.’ (Blundell 2014, 99)

But if an NYU ‘Professor of Economics’ were to describe Shenoy as a ‘very careful scholar,’ policy makers could feel justified in thinking that she had a ‘right to be heard.’ Ex ante, she obtained three decades of public funding on the back of special pleading by Hayek and the National Tertiary Education Union (of which she was a voluntary member). Ex post, NYU’s Rizzo (SHOE 13 May 2014)—one year after she had been exposed as an academic fraud—provided a recommendation: ‘I knew Sudha Shenoy and remember her as a very careful scholar.’ When pursuing tribal warfare, Austrians adopt a haughty pose. Horwitz—a ‘B-minus’ GMU graduate and (formerly) Charles A. Dana Professor of Economics, St. Lawrence University—described Nancy MacLean (2017) Democracy in Chains as a ‘travesty of scholarly standards.’57 Horwitz, who has ‘done public policy research on banking regulation for the Heartland Institute, Citizens for a Sound Economy, and the Cato Institute,’58 also provided a recommendation for Shenoy: ‘truly one of the founders of the Austrian revival.’59 Citing Horwitz’s recommendation, Wikipedia removed Shenoy’s entry because it ‘presents her as an academic’ although she ‘clearly fails to pass any of the criteria’ that Wikipedia has for such a listing.60 Rizzo attended the South Royalton, Hartford, and Windsor Castle revivalist conferences—and so presumably heard Yeager’s description of Shenoy’s intellectual ability. But Shenoy and Rizzo were both on the ‘Academic Advisory Board’ of the GMU Center for the Study of Market Processes61; and Rizzo was formerly Director of the CLS Fellowship Program, funded by the Schultz Foundation (Austrian Economics Newsletter 1978, 13). The Liberty Fund also provided ten scholarships ($2400 each plus travel expenses) for a CLS Summer Fellowship Program (Austrian Economics Newsletter 1979, 7). Kirzner nominated Ronald Nash of the Orlando Reformed Theological Seminary to be a guest at the 1992 MPS meeting—alongside two ‘free’ market zealots: Boettke and Rizzo.62 On his nomination form, Rizzo (2 March 1998) described himself as an NYU ‘Professor of Economics.’ But two decades later, his NYU website reports that he is ‘co-director’ of the NYU

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‘Austrian Economics Program,’ ‘lectures’ for IHS, is an ‘adjunct scholar of the Cato Institute’ and an ‘associate professor.’63 In ‘Economic perspectives against the welfare state,’ Rizzo (2010) told readers of the Christian Science Monitor that ‘Ancient Roman Senator Marcus Tullius Cicero spoke out against the welfare state, and ever since then politicians, economists and scholars have reeled against it’ because it is ‘immoral.’ Rizzo is funded by the ‘Sarah Scaife Foundation, Bradley Foundation, Earhart Foundation, SmithRichardson Foundation, Fred C. Koch Foundation, Pfizer, Inc., Chase Bank, Inc., and others.’ Documents on the University of California, San Francisco website led ‘Corporate Corruption of Science’ to conclude that the ‘cash-for-comment-economist,’ ‘Professor Mario Rizzo, New York University’ is on the Tobacco Institute’s ‘final list of economists’ who have ‘agreed to write op-ed articles and appear as witnesses in defense of public smoking.’64 Rizzo is the GMU’s ‘2017-2018 Hayek Distinguished Visiting Professor for the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics.’65 Rizzo (SHOE 21 May 2104) implied that he sought to make ‘the history of economic thought a respected part of economics again.’ Rizzo (10 October 1978) proposed the establishment of a Social ‘Science’ Fellowship named after a card-carrying Austro-Fascist: $6000 per annum to be awarded on the basis on a student’s interest in and ‘dedication’ to ‘libertarian’ principles (in addition to an undefined ‘general’ intellectual quality).66 The funded dissertations, Rizzo insisted, need not bear ‘any’ relation to libertarianism (or Austrian economics) because topics are ‘understandably’ often chosen with a view to getting the final product ‘approved.’ The Cato-sponsored ‘Ludwig von Mises Memorial Essay Contest’ was judged by Hazlitt, Haberler, Kirzner, Richard Wagner, former Treasury Secretary William Simon, and the editor of The Wall Street Journal editorial page, Robert Bartley.67 In ‘The Total Demolition of Milton Friedman,’ LewRockwell.com reproduced an illustration of Rothbard’s (1971) career-long vendetta against the person he calls the ‘Establishment’s Court Libertarian.’68 Is ‘free’ market promotion anything other than a fund-raising scam? Rothbard (24 March 1981) then appealed to the Scaife Family Charitable Trusts: ‘The Mises, the Hayeks, the Friedmans, and the

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Kirzners of the future must be supported now [Rothbard’s emphasis] if society is to inherit the legacy of their scholarship.’ The Scaife Family Charitable Trusts awarded $135,000 (1981), $60,000 (April 1982) and $100,000 (July 1982) to these Mises Fellowships; and another $40,000 was raised from Master Chemical Company and elsewhere. Ebeling produced the CLS Interim Report on the Employment of Scaife Funding.69 The CLS (31 December 1976) announced that it had obtained IRS recognition as a tax-exempt charity.70 Founded by Rothbard and Burton Blumert (2008, 327), it had bad luck with its Executive Directors. One was lost in a tragic suicide, and his successor — the CLS board would sadly learn — was a partially recovered member of Gambler’s Anonymous. Some months later, Richard — let’s call him — disappeared, and two fellows with hand-painted ties, representing a garbage disposal company from New Jersey, came to CLS’s offices looking for him. (Today, they could audition for ‘The Sopranos.’)

Margit Mises recommended Ebeling to the first CLS Executive Director, Grinder (18 February 1977); in turn, Grinder (13 December 1977) appointed Mrs. ‘Joan’ Ebeling to be her research assistant.71 In 1978, Grinder (1978, 8) was replaced by J. Phillip Sykes; ‘Joanne’ Ebeling became Sykes’ administrative assistant; and Richard Ebeling became CLS Projects Director. Two years after obtaining a seven-year undergraduate degree, Ebeling was described as one of the best-read ‘young academics’ in the libertarian movement. John J. Mahoney III (13 February 1986), of the Citadel Military College, expressed to Feulner his ‘sincerest’ hope that he be invited to join the MPS. He described his credentials: he had been identified with the Reagan revolution before it was so-called; and he was a Life Member, Republican National Committee, and a Member of the Mises Institute Entrepreneurial Council, the National Advisory Board of the National Centre for Privitisation and a Public Policy Expert at the Heritage Foundation.72 Somewhat impatiently, Mahoney (18 May 1978) made a second attempt to recruit Hayek as a CLS Speaker. Ebeling (10 August 1978)

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finally replied, describing Hayek as one of the leading spokesman for a ‘free’ society. Shortly afterwards, Ebeling was described—by the third CLS Executive Director, William M.H. Hammett (5 January 1979), as having ‘returned’ to his studies and no longer working for the CLS.73 In 1978, Casey and Fisher founded the International Center for Economic Policy Studies, which in 1981 changed its name to the Manhattan Institute for Policy Research. According to soucewatch, the Institute sought and received funding from tobacco companies: an R.J. Reynolds memo reveals that the Manhattan Institute was targeted as an independent third party to help reduce the public’s perception of danger associated with exposure to secondhand smoke.74 In a Manhattan Institute third annual Walter B. Wriston Lecture in Public Policy, Rupert Murdoch (1990) described ‘The War on Technology’ in Hayekian terms: ‘we were encouraged by Mrs. Thatcher’s victory in the miners’ strike and by signs that authorities were prepared to protect private property from the actions of massed pickets … The war between new technology and outmoded social institutions continues. At stake is the very idea of human progress … The great truth, which being an immigrant perhaps I can see more clearly than the average citizen, is this: Modernization is Americanization. It is the American way of organizing society that is prevailing in the world … The decision to rely on market forces is the essence of modernization. Yet technological change often provokes atavistic, authoritarian responses. The real danger of the present technological revolution is that we may be panicked by future shock into regressive schemes of regulation … The immediate result of our victory was greater freedom and flexibility, and higher profits, for News Corp. But the Battle of Wapping also ushered in a silver age of British newspaper journalism.’75 In 1980, Hammett was recruited to serve as President of the Manhattan Institute. In 1982, he was nominated for MPS membership by Charles Brunie, Chair of Oppenheimer Capital Group.76 Casey became Reagan’s CIA Director (1981–1987); and Hammett was replaced as CLS Executive Director by Richard Seiden. CLS Vice President, Joseph Peden (11 January 1982), apologised to Robert Nozick for Seiden’s ‘character’ and Hammett’s behaviour.77 Don Lavoie (15 June 1982) resigned from the CLS’s Austrian Economic Newsletter Board because of its ‘bad faith’ (irregular production decisions).78

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Immediately upon foundation, CLS offered to fund ‘academic’ work produced by the American Petroleum Institute79; it was also funded by Merrill Lynch, Kentucky Fried Chicken, the Master Chemical Corporation, Utah Power and Light, Freedom Newspapers, Chase Manhattan Bank, Pfizer and others.80 Edward Littlejohn, Pfizer’s Vice President for Public Affairs, attended the 1984 MPS meeting81; and his successor, Robert Shafer, was invited to attend the 1986 meeting.82 According to research undertaken at the University of California, San Francisco, at the Manhattan Institute, Hammett (20 August 1986) sought funding from Brown & Williamson Tobacco Corporation, a subsidiary of British American Tobacco.83 Hammett—‘once an investment banker’ who serves as the Manhattan Institute’s ‘ringmaster and fund-raiser’—told the New York Times: For most New Yorkers, politics is about little more than jobs; what we care about are ideas. The commitment of New Yorkers to ideas does not, to say the least, run very deep. What New York is about is amassing money, acquiring influence and power. Whose law firm is up and whose is down. Which developer is in, which is out. That’s how this city runs. But when the new people come in, without fresh ideas they’ll be dead. (cited by Redburn 1993)

This New York Times report concluded that with Giuliani about to become Mayor of New York, the ‘conservative Manhattan Institute should be riding high. The iconoclastic research group has seen some of its favorite ideas – selling city hospitals to private groups, cutting local business taxes, curbing the excesses of multicultural education – adopted as pillars of Mr. Giuliani’s campaign’ (Redburn 1993). Ebeling (2010) began his ‘undergraduate studies at California University, Sacramento.’ In 1975, Ebeling was an IHS Hayek Fellow attached to ‘Sacramento State University.’84 His CLS employment is not mentioned on his Citadel Military College cv; and he claims to have a ‘B. A. in Economics (1976)’ from California State College/University and either an ‘M.S.’ or an ‘M. A. in Economics (1980), Rutgers University, New Jersey.’85 In the November–December 1976 issue of

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Libertarian Review, Ebeling is described as part of the NYU ‘graduate program’86; and in the March–April 1977 issue, he is described as ‘studying under Profs. Ludwig Lachmann and Israel Kirzner.’ In July 1977 (according to the by-line of his ‘The Revival of Austrian Economics’), Ebeling (1977, 42) was still a ‘graduate student in economics at New York University’; and four years later (according to the by-line of his ‘The Stockholm School of Economics: An Annotated Bibliography’), Ebeling (1981, 12) was ‘currently writing a PhD dissertation (at University College, Cork, Ireland) on the contributions to economics of Ludwig Mises.’ The only activity that Ebeling lists on his Citadel Military College cv for the five-year gap (between his 1976 B.A. and his ‘Lecturer in Economics (1981–1983) National University of Ireland at Cork, Ireland’) is ‘Adjunct Instructor in Economics (1979–1981) Rutgers University.’ He also claims to have studied for and obtained a ‘PhD in Economics (2000), Middlesex University, London, England,’ whilst working 6000 kilometres away as ‘Ludwig von Mises Professor of Economics, Hillsdale College.’87 Coincidentally, perhaps, David Conway (1990) of Middlesex Polytechnic/University is a contributor to the Austrian Economics Newsletter and the author of ‘Liberalism, Classical’ in Cato’s The Encyclopedia of Libertarianism (2008), A Farewell to Marx: An Outline and Appraisal of His Theories (1987), Classical Liberalism: The Unvanquished Ideal (1995) and In Defence of the Realm: The Place of Nations in Classical Liberalism (2004) which J.C. Lester (2006) writing in the Journal of Libertarian Studies ‘would recommend’ as ‘going in the right direction as far as most people are concerned.’ Hammett told Reason: Our ideas have to be of a much higher quality than those of our opponents. They will be looked at much more critically because they come from a minority point of view. (cited by Fund 1986)

Grinder’s (1977, 8) worldview appears to be dominated by paranoia—‘the byzantine network of statist intervention and aggression continues to wrap its tentacles around mankind and thus impedes the peaceful pursuits

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of people around the globe.’ After Koch funding was withdrawn from Rothbardians, Cato and ‘the other organizations’ were denigrated by Miseans as being in the grip of ‘the Kochtopus’ (Gordon 2013). Ebeling (2014) complained about ‘those who wish to use the power of the state for their own advantage, who are unable to attain the economic status they desire through the open competition of the market place. They want government to place barriers in the way of their competitors or for government to give them subsidies to cover their cost inefficiencies that prevent them from earning the profits they desire. They want the government to redistribute other people’s wealth to them, which they are not able or willing to earn on their own in the arena of peaceful, free [emphasis added] competition.’ At the publically-funded University of Angers, the ‘Possible’ doctoral topics that Hülsmann ‘would be ready to supervise’ including ‘Christian Economics According to Gary North’—a public stoning theocrat.88 Hülsmann (2008, 188; 2007, 761, n. 6) complained that in the (non-Austrian) Welfare State ‘people develop a more than sloppy attitude toward their language. If everything is whatever it is called, then it is difficult to explain the difference between truth and lie. Inflation tempts people to lie about their products, and perennial inflation encourages the habit of routine lying … Fiat inflation seems to spread this habit like a cancer over the rest of the economy.’ He also asserted: A fine point to notice: the treatment of epistemology came after the definition of action, because science and epistemology are themselves instances of action. Another fine point: In Human Action, Mises adopts the pragmatist definition of truth (‘that which works in practice’) and maintains this definition throughout all later writings.

Yet another fine point: where can the phrase ‘that which works in practice’ be found in Human Action (1998 [1949])? One ‘free’ market promoter, the pharmaceutical fraud, Martin Shkreli, told an ‘investor who had not graduated from college that he had not finished college either, according to testimony. To an established Texas investor, he said he had graduated young from Columbia. He told another investor, in an email chain about Steve Jobs, a

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college dropout, that he had dropped out of Columbia’ (Clifford and Moynihan 2017). Under a section entitled ‘The Moral Hazard of Being Honest,’ Leube (2003 [2001], 10, 15–16) reflected about ‘considerations of reputation and especially peer pressure’: there were times when it ‘becomes senseless and even stupid to remain honest … situations are often faked to capitalise on any legal or semi-legal opportunity to exploit the collective system.’ Under Californian law ‘TITLE 7. OF CRIMES AGAINST PUBLIC JUSTICE [92 - 186.3 CHAPTER 4. Forging, Stealing, Mutilating, and Falsifying Judicial and Public Records and Documents [112 - 117]’: 1. Every person who knowingly procures or offers any false or forged instrument to be filed, registered, or recorded in any public office within this state, which instrument, if genuine, might be filed, registered, or recorded under any law of this state or of the United States, is guilty of a felony. 2. Each instrument which is procured or offered to be filed, registered, or recorded in violation of subdivision (a) shall constitute a separate violation of this section. 3. Except in unusual cases where the interests of justice would best be served if probation is granted, probation shall not be granted to, nor shall the execution or imposition of sentence be suspended for, any of the following persons: (a) Any person with a prior conviction under this section who is again convicted of a violation of this section in a separate proceeding. (b) Any person who is convicted of more than one violation of this section in a single proceeding, with intent to defraud another, and where the violations resulted in a cumulative financial loss exceeding one hundred thousand dollars ($100,000).89 When CSU Hayward/East Bay abruptly changed his status from full Professor of Economics to Professor Emeritus, Leube told the university magazine: ‘I have never claimed a PhD or similar in any way, nor was there any deliberate act of deception or the slightest attempt to mislead anyone … the reasons for this vendetta … are not known to me’ (cited by Coleman 2002, 1).

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Two years later, the ‘outstanding specialist in economics and historian, Dr. Kurt Leube,’ a ‘disciple of Nobel laureate Friedrich Von Hayek,’ visited Chile to talk about ‘the unintended consequences of the European welfare state’: ‘Recognized as one of the leading authorities in the tradition of the Austrian School of Economics, he is a professor at Stanford University, academic director of the Von Hayek Institute in Vienna and dean of the Executive MBA of the Swiss Management Center.’90 ‘Dr.’ Leube contributed to Ebeling and Lissa Roche’s (1999, ix, 51–67) Hillsdale College version of The Age of Economists: from Adam Smith to Milton Friedman. The MPS Secretary (1976–1988), Maximilian Graf von Thurn-Valassina, nominated ‘Dr’ Leube for funding for the 1980 MPS meeting91; ‘Dr.’ Leube ‘accepted’ MPS membership in 198092; and was awarded $1500 to attend the 1984 MPS meeting at Stanford University (it was explained that he had five children and needed as much tax-exempt funding as possible).93 During the Guatemalan Civil War, the MPS chose Guatemala’s Manuel Ayau as President (1978–1980). Ayau (1984) insisted that land reform must lead to ‘violence’ (Chapter 3, above). A future MPS President (12 May 1980) told Thurn that the presence of Pinochet’s officials at the 1984 MPS meeting would not be appreciated because ‘Stanford, California is the hotbed of pro-Allende – that is procommunist – sympathy in the United States … This is a sensitive subject which I hate to put in writing.’ Earlier, the same person told Count Thurn: ‘Let us hope and pray for the best in Rhodesia’ (29 February 1980).94 Thurn delivered an address to the 1980 MPS meeting on ‘The Underground Economy’95; and from GMU, Leonard Liggio (24 December 1985) expressed his delight to Martino at the ‘­flourishing’ ‘Subterranean Economy.’96 From The Ritz Hotel in Piccadilly, Nishiyami (10 September 1982) thanked Feulner for a cheque for $5000 plus $200 cash.97 In 1988, MPS Board members were paid in cash: Becker ($700), Hartwell ($3800) and Martinio ($2800).98 ‘Dr Kurt R. Leube’ (1976–1977) is an authority on ‘Hayek’s Perceptions of the “Rule of Law”’99; and ‘Dr. Kurt Leube’ (1984) is the author of the one-page ‘Essay: Hayek, Orwell, and The Road to Serfdom’ in

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Prometheus, the Journal of the Libertarian Futurist Society … founded in 1982 to recognize and promote libertarian science fiction. The LFS is a tax-exempt nonprofit group with an international membership of libertarians and freedom-loving science fiction fans who believe cultural change is as vital as political change in achieving freedom. After all, imagination is the first step in envisioning a free future – and the peace, prosperity and progress that can take humankind to the stars … People come to libertarianism through fiction.

Nymeyer (29 May 1970) asked Davenport: where had the ‘free’­ market prevailed where ‘ancient ETHICS’ had not ‘masterfully dominated’ society—and answered: ‘nowhere.’100 In ‘A Heartening Message from Youth,’ Davenport (1976) described an emergency plus a solution: Capitalism, in short, still lacks a comprehensive and comprehensible moral philosophy. In this situation it is news, and good news of the first order, that there is a rising generation of young academic thinkers who understand that capitalism is something more than an ‘incredible bread machine,’ important as that is, and who have the wit and learning to articulate a deeper faith. Confirmation of this new and immensely hopeful development is to be found in a slim volume of essays titled Free Enterprise—An Imperative, published in 1975.

Davenport lectured on ‘The Moral Basis of Economic Progress’101; and ‘Economics and the Moral Order’ to the 1977 ‘Role of Business in Society’ Intercollegiate Studies Institute (ISI) ‘Summer Institute at Stanford University,’ where (according to his notes) he told his students: ‘Fascism is Socialism.’102 The devout Roman Catholic and MPS associate, Paul Bede Johnson (1988, 2), posed some questions about secular Enlightenment Intellectuals: ‘How did they run their own lives? With what degree of rectitude did they behave to family, friends and associates? Were they just in their sexual and financial dealings? Did they tell and write the truth? And how have their own systems stood up to the test of time and praxis?’ Johnson concluded that a ‘disregard for truth and [a] preference for ideas over people … marks the true secular intellectual … One thing which emerges strongly from any case-by-case study of

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intellectuals is their scant regard for veracity.’ The fallacy of Argumentum ad hominem invites a negative-sum-game counter-examination. Inconspicuous religion can provide both personal comfort and social benefits: if ‘God’ is watching, those with an optimizing, infinite time horizon (heaven or hell) may have an incentive to be more truthful. In contrast, religiosity can be a front behind which to pursue an ulterior secular agenda. According to Boettke (2001, 267): ‘Wealthier is healthier.’ The post1974 ‘free’ market has delivered an ‘hourglass’ income distribution plus an obesity epidemic.103 How did Boettke (2014) rise to the top of the ‘free’ market food chain? Why is he so apprehensive about what he calls ‘digging up dirty’? According to his GMU CV, Boettke won ‘1st Prize, International Paper Competition on the Legacy of F.A. Hayek, Mont Pelerin Society, 1994.’ But what—in an essay bearing its founder’s name—would the MPS reward other than ‘sycophancy’ and ‘deference’ (Buchanan 1992, 130)? Boettke (2012) asserts: ‘I won the best dissertation in the United States Award’: he was (according to his CV) ‘Winner of the Omicron Delta Epsilon Graduate Student Paper Competition, 1988.’104 But there appears to be no such competition. According to Omicron Delta Epsilon website, ‘The Irving Fisher Article Award is bestowed upon the best article submitted by a graduate student or a recent recipient of a doctorate in economics.’ Far from any claim of this being the ‘best dissertation in the United States Award,’ Omicron Delta Epsilon emphasize that it is a members-only, self-nomination award (‘with a supporting letter from a faculty member’).105 Boettke’s name is not on the list of Irving Fisher Article Award winners provided by Omicron Delta Epsilon.106 The award consists of a ‘cash prize of $1000, and submission of the paper to The American Economist (at the option of the author)’—but Boettke’s (1988) thesis was not published in The American Economist but in Critical Review. According to Boettke (2001, xv–xvi), ‘I was affiliated with the Austrian Economics Program at New York University from 1990 to 1998 … The reality of those eight years far exceeded my expectations.’ According to information provided by Boettke, he taught for about four years at NYU. Also according to Boettke (2007): ‘I taught at New York

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University for roughly ten years.’ And according to his CV, Boettke was employed at ‘New York University 1990–1997.’107 Boettke (2009) claims that he ‘was a research fellow at Boston University’; but according to his CV, he was a ‘Summer Faculty Member on Economy and Culture, Institute for the Study of Economic Culture, Boston University (1992).’ Boettke (2009, 2010b) claims that he ‘completed a post-doc fellowship at Stanford’; and held ‘visiting professorships at Stanford’—but according to his CV, he was ‘National Fellow, Hoover Institution’ (1992–1993) and ‘Visiting Scholar, Hoover Institution’ (1995)—neither of which are ‘post-doc’ fellowships or ‘visiting professorships’; and neither of which require academic approval from Stanford University.108 After retiring from the University of Chicago in 1976, Friedman initially attended the Hoover Institution regularly (and participated in 3.30–5 p.m. Senior Commons sessions). But by the early 1990s, with the advent of the personal consumer, he typically worked from his Sea Ranch holiday home (overlooking the Pacific Ocean) or from his San Francisco apartment (overlooking Alcatraz)—he took the hour-long drive from San Francisco to Hoover primarily for meetings and official functions.109 In 1995, Friedman was hospitalized for a life-threatening heart condition: the co-editor of The Collected Writings of Milton Friedman (Leeson and Palm 2016) saw him only in San Francisco (where he walked around his apartment with the help of a wheeled mobility device).110 What the ‘free’ market denigrates as ‘the “nonconcept” of education’ (Chapter 6, below) is designed to facilitate intellectual independence. But the middle-aged Boettke (2012) was still a ‘cheerleader’: ‘after my time in Stanford I spent a year [emphasis added] with Milton Friedman (in 1995). One time we have a debate about chart legalization policy and in the middle of the debate Friedman turned to me and said, what do you think? And I just said the same as you. Friedman loved debate and so when I said that he was like, you’re a pain in the ass. So I lost the opportunity to engage him. Now I was like a cheerleader and that was a big mistake.’111 Davenport lectured to the 1983–1984 Foundation for Free Enterprise (FFE)/Jersey City State College (now New Jersey City

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University) for-credit course on ‘Understanding American Business.’ The first (‘Costs and Choice’), middle (Profit and Loss’) and last (‘The Economics of Property Rights’) lectures were given by Ebeling, who was described as a ‘Participating Academician’ and ‘Post Doctoral Fellow, Department of Economics, New York University.’112 But in 1983–1984, Ebeling was still seventeen years away from completing the Ph.D. that he had begun in 1976. There are three alternatives. In a future Archival Insights into the Evolution of Economics volume, Boettke and Ebeling should either • produce the evidence that they were post-doctoral fellow at NYU and Stanford, respectively; or • provide an ‘innocent’ explanation for their falsehoods; or • confess that assertions made on behalf of the ‘free’ market are a species of self-promoting fraud. Ebeling’s and Davenport’s lectures were delivered in the ‘Free Enterprise Hall of Fame.’ In 1975, FFE was established by the Commerce and Industry Association of New Jersey to promote an ‘understanding and appreciation of the free market economic system.’113 According to its ‘Philosophy’: FFE ‘works hard to be certain people understand how markets create a climate of opportunity that enable people to reach their full potential, and the human spirit to thrive.’114 Fifteen years before Ebeling received a Ph.D., The Wall Street Journal columnist, Peterson, nominated ‘Dr. Richard Ebeling of Dallas’ for an MPS Earhart Fellowship115; but MPS President James Buchanan (14 April 1986) blackballed him because he was a ‘total fool.’116 But according to Boettke (2016), Ebeling is ‘one of the most articulate spokesman for the Austrian school of economics … He has been that teacher both in the concrete and in the abstract for so many economists that have dedicated their lives to advancing the awareness and the teachings of the Austrian school of economics as teachers, scholars, public intellectuals and citizens.’ ‘Professor Ebeling of the University of Dallas’ told a 1986 GMU conference on Hermeneutics that the reader

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must look for ‘intentionalities’ by looking at the text as a narrative, empathizing with the author … as market participants we specialise in gathering knowledge of the particulars of time and circumstance; this process entails building appropriate ideal types of others. (cited by Thommesen et al. 1986)

Ebeling was building an ‘ideal type’ of himself: he was ‘Assistant Professor of Economics (1984-1988) University of Dallas.’117 Ebeling (2017) finds non-‘free’ market promoters incomprehensible: like interacting with people from a different planet whose ‘logic’ was different from normal human beings.

How do ‘normal human beings’ allocate ‘free’ market jobs? Rothbard was ‘not pleased when Cato hired David Henderson, who leaned toward the Chicago School.’ But Roy Childs (editor of Libertarian Review ) and Henderson were ‘friends, and Henderson secured his post largely through Childs’s recommendation’ (Gordon 2013). As Bill Gates, Mark Zuckerberg et al. dropped-out of Ivy League universities for entrepreneurial motives, so Austrian ‘businessmen’ dropped-in to teach about entrepreneurship, ethics and the ‘free’ market. As FEE President, Mark Skousen (2008) gave Buckley a copy of The Making of Modern Economics. Shortly afterwards, John Whitney, Chairman of the W. Edwards Deming Center for Quality Management and Professor of Professional Practice [emphasis added] at the Columbia Business School, telephoned and, a few months later, arranged for Skousen to take over his courses: ‘I immediately accepted. I will be eternally grateful to William F. Buckley, Jr., for opening this door to my career.’ Is GMU a ‘free’ market employer of last resort—a sheltered workshop? According to his CV, Boettke (in his ‘away’ decade) was employed at ‘Oakland University 1988–1990,’ ‘New York University 1990–1997,’ and ‘Manhattan College 1997–1998.’ But of his seven years at NYU, two were spent at the Hoover Institution and a third was, apparently, spent as ‘Visiting Professor, Central European University, Prague, Czech Republic 1993’ and ‘Visiting Scholar, The Institute for International Political and Economic Studies, Russian Academy of Sciences, Moscow, 1993.’ Gaining tenure usually involves a balancing act between research

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and preparing and teaching new courses. But for almost half his time at NYU, Boettke was apparently free of teaching duties to pursue ‘research.’ At NYU, Boettke (3 October 1996) offered celebrity endorsements (e.g. this book illustrates the ‘enduring truth’ of the Austrian ‘approach’) for what Hayek described as a ‘propaganda’ set-up (Chapter 1, above)—adding that his words could be edited (embellished?) as the author ‘saw fit.’118 According to The Wall Street Journal, after being deemed unworthy of tenure at NYU, a private university, a ‘friend’ arranged for Boettke to be hired by a public university, GMU (Evans 2010). Boettke (2012) reflected ‘I lost a job at Boston University’ in 1996 which was ‘hard for me to swallow.’ So hard it seems, that his Boston University job is not mentioned on his CV.119 He ‘will be happy when I am the Ludwig von Mises Professor at the F.A. Hayek Centre for Advanced Studies at Princeton University. Then I will be happy.’ According to FEE, Ebeling is a ‘long-time and prolific scholar of liberty’ whose ‘list of academic and popular publications runs 35 pages’ and who is ‘universally recognized as the premier scholar’ of the life and works of Mises (Ideas on Liberty 2003). These ‘academic and popular’ articles have appeared in the Moonies’ ‘Washington Times, Investors Business Daily, the Boston Globe, Detroit News, National Review Online, The Freeman, Freedom Daily, The Daily Bell, and Advances in Austrian Economics, the International Journal of World Peace, and Political Studies’ and ‘EpicTimes.’120 Many, if not most, are highly opinionated expressions of outrage at ‘Soviet Fairy Tales’ (2016) and externalities—Pigou’s supposed ‘disinterested analysis and policy prescriptions’ was a Fairy Tale: ‘he was,’ according to Ebeling (1994), a ‘Soviet secret agent.’ Mark Skousen signs his emails ‘A.E.I.O.U.’ which comes from the tombstone of Frederick III, the first Hapsburg emperor. Many believe it is Latin or German for ‘Austria will rule the world.’ For me, it means, ‘Austrian Economics Is Overall Universal.’121

In the Mises Institute’s Free Market, Rockwell (1989) complained that ‘Big government spends billions of dollars to tell us how wonderful it is.

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Too bad the truth-in-advertising laws don’t apply, for this is one of the great frauds of American history.’ Skousen’s 2017 Freedomfest celebrated ‘Trump’s commitment to cut waste, fraud and taxpayer abuse.’122 And in ‘The Coming Trump Biotech Explosion Turn Every $500 Investment Into $58,022’ on MarkSkousen.com, Roger Michalski, the publisher of Skousen’s Eagle Financial Publications, asserted: ‘we expect Dr. Skousen’s biotech to have the chance to jump up to 110-fold. I don’t want you to look back and regret missing the massive boom coming in biotech. Remember, all the risk is on our shoulders. So what are you waiting for? Click the button below now to get started.’123 Mark Skousen (1997) and Ebeling may have only one academically refereed publication between them—but Buckley told Skousen (2008): ‘I keep your economics book at my bedside and tell all my friends to read it!’ Buckley was referring to The Making of Modern Economics, in which Skousen (2009, 338–339) uncritically repeated ‘Deacon’ McCormick’s fraud: It’s difficult to say at what point Pigou shifted views and became an underground supporter of revolutionary causes … there is considerable evidence that he had been an underground agent for revolutionary causes much earlier in his career. According to British agent Richard Deacon (a pseudonym), in 1905 Pigou attended a clandestine meeting of the Russian Social Democrats in London and decided to become a secret agent, committed to developing a British spy network and arranging payments for arms shipments to Russia. He even kept a diary that year written entirely in code (Deacon 1989: 44-45) … he allegedly met with the Soviet Secret Service to provide strategic information concerning the location of airfields and squadrons in the Cambridge area. He also helped recruit young men to join the ring of Soviet spies in Britain. He would invite them on hiking trips or to his lakefront home … At one point, Pigou approached Friedrich Hayek, who had transferred from London to Cambridge during the war. Hayek, like Pigou, was an avid mountain climber whom Pigou invited to stay at this lakefront home and go hiking. According to Hayek, Pigou was interested in the names of people who could cross frontiers. But Pigou suddenly dropped Hayek, who was singularly unsympathetic to Pigou’s cause. (Hayek 1994: 136–137)

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As the assets of the former Soviet Empire were being transferred to oligarchs through Austrian-promoted ‘privatisation,’ Mark Skousen (1991, 153, 155, 212) speculated: ‘Perhaps one reason that mainstream economists are reluctant to discuss the increasing popularity and success of privatisation is that it replaces the theory of market failure with that of government failure.’ Citing Coase’s assault on Pigou, Skousen concluded: ‘The case of the lighthouse is a classic example of how economists often make assertions without checking facts or doing any comprehensive research.’ Before The Road to Serfdom, Hayek’s major contribution to world history had been the promotion of the deflation that facilitated Hitler’s rise to power. He miscalculated: the Great Depression created a one-term Republican President (1929–1933) and two decades of Democratic Presidents (1933–1953). The 1935 National Labor Relations Act (the Wagner Act) guaranteed the rights of private sector employees to organize into labour unions and to take collective action, including strikes. After 1945, the Welfare State expanded throughout the economically developed world. According to Grinder (1978, 10, 11), the ‘first wave of Austrian economics came early on, in the works of Phillip Wicksteed [1844-1927] and William Smart [1853-1915], only to be pushed aside with the rise of the Marshallian system. Austrian economics again reigned supreme [emphasis added] during the years 1930-1935 when Hayek was the acknowledged intellectual leader … Let us hope that the current resurgence is more secure and attains a longer longevity. Although Hayek reigned at the LSC [sic] during the early 1930s, his influence waned during the late 1930s and 1940s, until he left for the University of Chicago - and ever since there has been no Hayekian influence at the LSC [sic].’ In his Memoirs, Hoover (1952, 29–32) attributed his one-term status to the Austrian-style advice offered by his (one-handed) Treasury Secretary, Andrew Mellon: Two schools of thought quickly developed within our administration discussions. First was the ‘leave it alone liquidationists’ headed by Secretary of the Treasury Mellon, who felt that government must keep its hands

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off and let the slump liquidate itself. Mr. Mellon had only one formula: ‘Liquidate labor, liquidate stocks, liquidate the farmers, liquidate real estate.’ He insisted that, when the people get an inflation brainstorm, the only way to get it out of their blood is to let it collapse. He held that even a panic was not altogether a bad thing. He said: ‘It will purge the rottenness out of the system. High costs of living and high living will come down. People will work harder, live a more moral life. Values will be adjusted, and enterprising people will pick up the wrecks from less competent people.’

After Hitler’s defeat, the ‘International Right’ regrouped—the ‘fusion’ of traditionalist social conservatism with political and economic right libertarianism that Buckley, M. Stanton Evans and Frank Meyer promoted (Leeson 2017). Buckley was a Roman Catholic; Meyer was an ex-communist convert to Catholicism; and at The Wall Street Journal (5 May 2012 Journal Editorial Report), editor Paul Gigot reflected to deputy editor, Dan Henninger, ‘Dan, we’ll put it on the table, we are all Catholics here, grew up with Catholic social teaching’; to which Henninger replied: ‘Right.’124 According to David Frum (2003), the Philadelphia Society (where Hayek was a ‘Distinguished Fellow’) was a forum where the various factions sought unity: ‘libertarians who believed that parks should be sold to private industry, traditionalists who regretted the collapse of the Habsburg monarchy, and — most recently — neoconservatives.’ At the Philadelphia Society in 1986, another MPS member, Stephen Tonsor (a University of Michigan academic and employee of the Relm and Earhart Foundations125), described the ‘paleoconservative’ part of this ‘fusion’: ‘true’ conservatives were ‘Roman Catholic at root, or at a minimum Anglo-Catholic. They studied literature, not the social sciences.’ While he was ‘very glad to see that some non-religious social scientists were now arriving at conservative conclusions, they should understand that their role in the conservative movement must be a subordinate one.’ In ‘Hayek and the Angels,’ M.J. Sobran Jr. (1975) reported that Hayek had told the Philadelphia Society that it had ‘gotten to the point’ where ‘we speak not of preserving but of returning [emphasis in original] to the free society.’

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Trilling (2008 [1950], xv) famously stated that ‘it is the plain fact that nowadays there are no conservative or reactionary ideas in general circulation. This does not mean, of course, that there is no impulse to conservatism or to reaction. Such impulses are certainly very strong, perhaps even stronger than most of us know. But the conservative impulse and the reactionary impulse do not, with some isolated and some ecclesiastical exceptions, express themselves in ideas but only in action or in irritable mental gestures which seek to resemble ideas.’ After 1974, it appeared that the reverse was true—Buckley’s ‘fusion’ played a major role in this transformation. And according to a seeker of ‘higher spiritual verities,’ Hayek had provided salvation—‘one of the few authentic intellectual heroes of our time’ who had helped facilitate the ‘fusion’ (Davenport 1985). With fusion goes fission. Skousen’s tenure as FEE President was abruptly terminated following his decision to invite Rudy Giuliani as keynote speaker to FEE’s annual ‘Liberty Banquet.’ When the FBI and the SEC began investigating Lincoln Savings and Loans, Charles Keating hired the MPS member, Greenspan (soon to be Chairman of the Federal Reserve), who compiled a report praising a ‘seasoned and expert’ management—Lincoln’s depositors faced ‘no foreseeable risk’ (cited by McFadden 2014). In contrast, as U.S. Attorney for the Southern District of New York, Giuliani had interfered with the ‘free’ financial market. The insider trader, Ivan Boesky, traded testimony against his former collaborators for leniency from Giuliani (a three-anda-half year prison sentence plus a $100 million fine). The ‘shopped’ junk bond trader, Michael Milken, then traded ten years inside prison for two years by ‘shopping’ others (he was fined $600 million and permanently barred from the securities industry by the SEC). Because of abuses, the 1934 SEC Act was strengthened by the 1968 Williams Act (which sought to require ‘full and fair’ disclosure to protect stockholders). Rothbard (1992) was outraged: ‘The genius of Michael Milken was to find a way to make the free market work, a way around the roadblock of the Williams Act’; he was ‘the most creative financial innovator of our time. And so, Michael Milken is in jail, and now suddenly everyone wonders why American industry can’t compete

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with the Japanese. Let us liberate Milken and look instead to New York City and Washington for the causes of our economic ills.’ In the Austrian Economic Newsletter, Thomas DiLorenzo (1999) also expressed outrage: Recall that Rudolph Guiliani [sic], as U.S. attorney, had ‘inside traders’ handcuffed, chained, and dragged down Wall Street. Why? These people were simply operating in the free market in an entrepreneurial fashion. But he turned them into criminals. This catapulted him into the mayoral position, and now he is running for the Senate.

In defence of Ayn Rand, Greenspan explained what the ‘free’ market means: ‘Parasites who persistently avoid either purpose or reason perish as they should’ (cited by Rubin 2007). Rothbard (1994, 5) defended both the corrupt ‘spoils system’ and the ‘victimless crime’ of insider trading: Suppose I have a tip that there’s going to be a merger of two companies. I buy the stock. You sell me the stock – you haven’t got the tip. Well, so what? You haven’t lost anything. You were going to sell the stock anyway. If I didn’t have the tip, you would have sold it to somebody else, a third guy. Well, the third guy would have had a windfall profit when it came out that the merger was going on. The other way, I get the profit because I knew what was going on [emphases in original]. (cited by Sublett 1987)

The corruption (price-manipulating investment ‘pools’) that fuelled the 1928–1929 Wall Street bubble legitimized the Utopian Left critique of all markets. According to Buckley and Leo Brent Bozell (1954, 160, n. 50–51), Senator Joseph McCarthy’s ‘first important blow’ against supposed communists in the U.S. State Department was reported the following day in only two newspapers—one of which was the Chicago Tribune. The Tribune produced what Herbert Simon (1991, 121) regarded as a ‘thick stream of bile’ in its battle to save what it regarded as the American way of life against the New Deal. According to Rexford Tugwell (1972, 169), the Tribune continued to print stories that were ‘straight Hoover. It might have been culled from the Memoirs.’

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The Tribune fanned anti-communist flames and the Illinois State Senate established a committee to investigate subversive influences in the educational system (Schlesinger 1960, 88, 94, 529, 604, 607; Stigler 1988, 157; Ickes 1953, 368, 376). In 1936, the founder of the largest drug retailing chain in the United States, Walgreens, withdrew his niece from the University of Chicago because he believed that she was being corrupted by free love and communism. The Chicago Tribune stirred up the case and the Illinois legislature set up an investigating committee. Walgreen, who was persuaded that his observation was wrong, donated $500,000: after 1958, Stigler (1988, 157) held the ‘princely salary’ and ‘luxuriously upholstered chair, the Charles R. Walgreen Professorship of American Institutions.’ McCarthy received financial backing from Tribune ’s publisher, Colonel Robert McCormick (Revere 1959, 115). According to Samuel Francis (1995, 65), Rothbard was an adviser to McCormick, Charles Lindbergh (who in 1941 sought a neutrality pact with Nazi Germany), and ‘Senator Robert A. Taft … who best represented what Rothbard believed was the real American tradition of small and limited government at home and an America First foreign policy abroad.’ Eleven days before the announcement of Hayek’s Nobel Prize, FEE’s Chamberlain (1974a, ‘May we borrow the crystal ball?’) reported on that year’s MPS meeting for the Chicago Tribune: Shenfield (then at Rockford College, IL) was ‘undeniably right’ to declare that British unions were ‘trying to milk the tottering English economic system for more than it can yield.’ Chamberlain revealed the quality of ‘free’ market ‘knowledge’: Hayek had ‘tangled’ with Keynes’ disciples who justified their intervention in economic matters on the grounds that the long term damage done to the free market didn’t matter, for as Keynes put it, ‘in the long run we are all dead.’

Hayek (1983) told the Cato Policy Report that Keynes ‘admitted publicly that he had always been an amoralist. And that involved the famous statement—in the long run we are all dead. Now the great merit of traditional morals is that they have evolved and developed by long-run

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effects which people never foresaw and understood. And the merits of the institution of private property and of saving are that in the long run those groups that adhered to them prospered.’ In the first volume of his Collected Works, Hayek (1988, 78–79) repeated this misrepresentation of Keynes’ (1923, 79–80) famous dictum about the long run and short run effects predicted by the quantity theory of money: ‘But this long run is a misleading guide to current affairs. In the long run we are all dead. Economists set themselves too easy, too useless a task if in tempestuous seasons they can only tell us that when the storm is long past the ocean is flat again.’126 Hayek (1988, 57) asserted that Keynes—now described as an ‘immoralists’— was referring to his general belief in a management of the market order, on the grounds that ‘in the long run we are all dead’ (i.e., it does not matter what long range damage we do; it is the present moment alone, the short run – consists of public opinion, demands, votes, and all the stuff and bribes of demagoguery – which counts).

In promoting the end of compulsory ‘State-standardized’ education, Chamberlain (1974b, 501) also asserted that we are ‘fortunate in having a few independent foundations’ such as the IHS and the Center for Independent Education. Rothbard (2007, 145) reported that FEE’s founder, Read—who had a ‘mystical streak’—would treat newcomers to FEE with a one-hour monologue that began: ‘scientists tell me that if you could blow up an atom to the size of this room, and then step inside it, you would hear beautiful music.’ It is ‘widely whispered in the libertarian community’ that Read (1898–1983) ‘joined his friends,’ William Mullendore (1892–1983, President, Southern California Edison Company), James Ingebretson (1906–1999, Spiritual Mobilization) and Thaddeus Ashby (1924–2007, Assistant Editor of Faith and Freedom ) in ‘acid explorations’ (Doherty 2007, 279–280; Rothbard 2007, Chapter 11; North 1971; McVicar 2017). According to Rothbard (1990, 3), Luhnow (President of the Volker Fund) was Rushdoony’s disciple. Luhnow (1895–1978) told staffers that in 1962 he had received ‘direct and

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specific communication from God’ and expected that Baldy Harper would also receive Divine communication (Doherty 2007). According to Salerno (2002, 105, 112), the Volker Fund ‘made it possible for Mises, Hayek, Rothbard, and dozens of others to develop and advance libertarian views and in the midst of an ideological climate implacably hostile to their ideas’—it funded Rothbard’s (2001 [1962]) Man, Economy, and State, underwrote Mises’ NYU seminar and provided Hayek’s salary at the Committee on Social Thought at the University of Chicago (Vaughn 1994, 66). But in early 1962, ‘the organizational foundations of the tiny libertarian movement—such as they were—were shattered by the sudden and near-total collapse of the Volker Fund’ (Raimondo 2000, 151). According to Salerno (2002, 112), the IHS ‘succeeded’ the defunct Volker Fund as the ‘main institutional promoter of hard-core Austrian economic theory and libertarian political economy.’ For ‘free’ market promoters, ‘knowledge’ is transactional and has a pre-ordained function. Although the Old Testament states that heathen slaves ‘shall be your bondmen forever,’ in Disobedience and Defeat: An Economic Commentary on the Historical Books, North (2012, 83) rectified this to ‘10 generations’: The Hebrews understood ‘forever’ to mean 10 consecutive generations of covenant membership (circumcision).

North’s (1999) devotion to Cornelius Van Til saved him from taking sides in the factional infighting that emerged at the first Austrian revivalist conference. In 1974, he didn’t join any of the ‘camps’ at South Royalton because of his ‘commitment’ to Van Til, rather than Kant or Aristotle, who, he detected, were being embraced by his fellow Austrians. According to North, Van Til appealed to the doctrine of ‘creation’ to avoid the ‘dilemmas’ of Kant’s dualism. God, the Creator, is ‘omniscient.’ Although God created man as ‘His image,’ man cannot understand the creation ‘exhaustively’; man had a ‘hoped-for personal autonomy from determinism.’ Van Til, therefore, appealed to ‘covenant-keeping rather than covenant-breaking.’

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Boettke tells his GMU students that ‘Economics is a pair of glasses that we use to see the world more clearly’ (cited by Martin 2010, 130). Referring to an eye-for-an-eye public stoning theocrat, Boettke (2007) insists that his fellow Presuppositionist, North, is one of a ‘whole stew of people’ who have provide Austrians with ‘eyeglasses … really fantastic work.’ According to Ken Schmidt (2011, 454), two years before the 1974 Austrian revivalist conference, Van Til accused North of rectifying him: ‘I am frankly a little concerned about the political views of Mr Rushdoony and Mr North and particularly if I am correctly informed about some of the views Gary North has with respect to the application of Old Testament principles to our day. My only point is that I would hope and expect that they would not claim that such views are inherent in the principles I hold.’ Rushdoony, the founder of Chalcedon, was known as the ‘ayatollah’ and was (perhaps unfairly) suspected of seeking to turn the United States of America into Saudi Arabia with the House of Rushdoony replacing the House of Saud. Rushdoony ‘took notice of Nymeyer’s writing in the 1980s and personally requested multiple copies of his books for the Chalcedon library and for distribution. Even though Rushdoony did not always agree with Nymeyer, he appreciated Nymeyer’s basic respect for the Mosaic law as a law with modern relevance — a law of liberty’ (Terrell 2004). Chapter 6 documents the process by which Mises reconciled himself to the devout American Christians who were funding him. In FEE’s The Freeman, Boettke (1995), stated that ‘George Pearson, who had graduated from Grove City College and was then working with’ the IHS, ‘initiated the idea to bring together the three leading active scholars in Austrian economics—Israel Kirzner, Ludwig Lachmann, and Murray Rothbard—to present a series of lectures to young faculty and graduate students who had expressed an interest in Austrian economics to the Institute.’ Boettke neglects to provide some crucial information: Pearson was ‘then working for Charles G. Koch in Wichita, Kansas but spending several days a month helping IHS’ (Blundell 2014, 93); he was ‘Koch’s Wichita lieutenant in charge of libertarian programs’ (Gordon 2013). Pearson told Blundell (2014, 93):

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Whose idea was South Royalton? Charles [Koch] was very much interested in Austrian economics. He brought Mises to Wichita in the late ‘60s and Bob Love [another prominent Wichita businessman] brought Sennholz every year. Charles saw Rothbard as a ‘fertile mind’ and was interested in getting Murray’s input at IHS after Baldy [Harper] died in April 1973. Charles, Murray and I all wanted to push Austrian economics at IHS and Charles agreed to fund conferences and books.

Love and Charles Koch opened a John Birch Society bookstore with a special section reserved for Austrian economics (Schulman 2014). According to Jane Mayer (2010, 2016), the John Birch Society was the model for his ‘free’ market revolution. The Charles Koch Foundation became ‘actively involved in promoting Austrian economics’ by expanding and improving the ‘Studies in Economic Theory’ series and expanding the Austrian lecture series at the University of Chicago (Austrian Economics Newsletter 1977). Hundreds of millions of tax-exempt dollars have flowed from the ‘free’ market fossil-fuel industry to the Austrian School of Economics. Grinder (1977, 9) explained that all that was required was that he and his fellow Austrians should ‘share the load’ associated with spending these funds: the infrastructure of a meaningful movement for the attainment of liberty has been laid. There no longer is a trace of doubt in my mind that if each of us carries his full share of the load, we can look forward to victory for a free society based on private property and the voluntary exchange mechanism of the free market, at least within the borders of the United States, within the lifetime of my children, if not sooner.

In ‘Myth and Truth About Libertarianism,’ Rothbard (2012 [1979]) extolled the virtues of the ‘free’ market relative to government: ‘A free society, by not establishing such a legitimated channel for theft and tyranny, discourages the criminal tendencies of human nature and encourages the peaceful and the voluntary. Liberty and the free market discourage aggression and compulsion, and encourage the harmony of mutual benefit of voluntary interpersonal exchanges, economic, social, and cultural.’ And in ‘A World Without a [non-Austrian] Welfare State,’

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Ebeling (2015) asserted: ‘Confiscation of freedom through abridgements of individuals’ rights to their life, liberty and honestly acquired property also brings with it a less humane and civil society.’ Under the (pre-Christian) Roman Empire, Christians could be spared from execution if they accepted the authority of the State; and by becoming an Enemy of the State (Raimondo 2000), devotees could qualify for a job recommendation from Rothbard—who in Austrian circles is known as ‘Robhard’ (Skousen 2000). After one year as an ‘Instructor’ at City College of New York (1948–1949), Rothbard was unable to find academic employment until 1966 (at the Polytechnic Institute of Brooklyn). In between—with an unspecified gap (1948–1952)—he was ‘kept’ (employed) by the Volker Fund and other tax-exempt causes.127 For Volker’s benefit, Rothbard (2010 [1957], 254) denigrated the SEC/NYU Jules Backman a ‘kept economist who has no firm principles at all.’ One attendee of the 1974 revivalist conference regards ‘Murray Rothbard and […] as dishonest … But I do not think Murray Rothbard is more dishonest than […].’128

Notes 1. Hayek Archives Box 39.1. 2. For Hayek’s repeated use of the illegal’von’ see Leeson (2015a, Chapter 1). 3. Davenport Archives Box 23.7. 4. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 5. https://www.montpelerin.org/statement-of-aims/. 6. MPS Archives Box 76. 7. MPS Archives Box 122. 8. MPS Archives Box 47.9. 9. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/).

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10. Friedrich Hayek, interviewed by Earlene Craver date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 11. IHS Archives Box 11. 12. http://edition.cnn.com/2016/07/07/health/us-highest-crash-deathrate/index.html. 13. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 14. The 1865 Thirteenth Amendment (‘Neither slavery nor involuntary servitude, except as a punishment for crime whereof the party shall have been duly convicted, shall exist within the United States, or any place subject to their jurisdiction’) was ratified by Kentucky in 1976 and Mississippi in 1995 (both after rejection in 1865). The 1868 Fourteenth Amendment (‘No State shall make or enforce any law which shall abridge the privileges or immunities of citizens of the United States; nor shall any State deprive any person of life, liberty, or property, without due process of law; nor deny to any person within its jurisdiction the equal protection of the laws’) was ratified by Maryland in 1959 and Kentucky in 1976 (both after rejection in 1867). The 1870 Fifteenth Amendment (‘The right of citizens of the United States to vote shall not be denied or abridged by the United States or by any State on account of race, color, or previous condition of servitude’) was ratified by Oregon in 1959, California in 1962, Maryland in 1973, Kentucky in 1976 and Tennessee in 1997 (all after rejection in 1869–1870). 15. https://web.archive.org/web/20131218201335/http://www.innocenceproject.org/know/. 16. Friedrich Hayek interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 17. IHS Archives Box 11. 18. Hayek Archives Box 167. 19. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 20. Hayek Archives Box 167. 21. Hayek Archives Box 97.13.

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22. It would be useful to have full access to the relevant financial records—but this seems unlikely. 23. Haberler (1986, 431) noted that ‘many’ would regard Hayek’s proposal to denationalize money, ‘as utopian and I will not discuss it further, except to say that it is clearly inconsistent with Hayek’s earlier proposal for constant money and should be regarded as an interim measure to deal with an acute emergency.’ 24. http://public.econ.duke.edu/~bjc18/Caldwell_Vita2010-2016.pdf. Accessed 22 October 2017. 25. As Keynes (1936) circled before landing on Pigou as his ‘classical’ whipping boy, so ‘Deacon’ McCormick (1979) circled before landing on Pigou as the Fifth Man (Leeson 2015b). Jewkes was lucky not to have been picked instead of Pigou—and ‘exposed’ as a traitor in ‘Deacon’ McCormick’s (1979) British Connection: he was at Gresham’s School with the Soviet spy, Donald Maclean, and co-authored Moscow in the Making (2015 [1937]) with Ernest, 1st Baron Simon, Lord Mayor of Manchester, who co-authored the Liberal Party Yellow Book, which, according to Hayek (1995 [1952], 229), in 1928 converted the Liberal Party to a ‘semi-socialist program’ (Stocks 1963, 85). He was also the father of Brian Simon, who joined the Communist Party and travelled to a Moscow conference with Guy Burgess. Like Pigou, Jewkes had the perfect academic cover: Ordeal by Planning (1948) plus membership of Hayek’s MPS. 26. Hayek Archives Box 77.9. 27. http://www.hayek-stiftung.de/en/board-of-trustees.html. 28. http://www.hayek-stiftung.de/fileadmin/user_upload/hayek-stiftung. de/Presse/pressemitteilung-preisverleihung_2003.pdf. 29. Davenport Archives Box 38.5. 30. MPS Archives Box 72. 31. MPS Archives Box 122 ‘Expenses.’ 32. http://www.exxonsecrets.org/html/orgfactsheet.php?id=109. 33. MPS Archives Box 39.10. 34. MPS Archives Box 40.5. 35. Redmond (27 March 1959) to Hunold. MPS Archives Box 40.8. 36. MPS Archives Box 58.1. 37. MPS Archives Box 50.13. 38. MPS Archives Box 53.1. 39. MPS Archives Box 82.

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40. MPS Archives Box 85. 41. Shenfield (5 November 1977) to Arthur Kemp. MPS Archives Box 52.9. 42. MPS Archives Box 51.11. 43. MPS Archives Box 78. 44. MPS Archives Boxes 100 and 86. 45. MPS Archives Box 101. 46. MPS Archives Box 43.9. 47. The elevator may not actually have been built. MPS Archives Box 68. 48. MPS Archives Box 86. 49. MPS Archives Box 129. 50. MPS Archives Box 86. 51. http://www.cnbc.com/2017/05/22/wilbur-ross-says-saudis-did-notprotest-trump-but-misses-key-point.html. 52. MPS Archives Box 98. 53. MPS Archives Box 101. 54. MPS Archives Box 110. 55. Hayek Archives Box 20.1. 56. MPS Archives Box 2.7. 57. http://bleedingheartlibertarians.com/2017/06/maclean-nutterbuchanan-universal-education/. 58. https://fee.org/resources/dr-steven-horwitz/. 59. Horwitz told Carl Hall (1986) that Buchanan gave him a B-minus. 60. http://www.like2do.com/learn?s=Wikipedia:Articles_for_deletion/ Sudha_Shenoy%20Accessed%204%20June%202017. Accessed 4 June 2017. 61. Hayek Papers Box 97.14. 62. MPS Archives Box 101. 63. http://www.econ.nyu.edu/user/rizzom/. 64. ‘To his credit, Rizzo no longer appears in the tobacco archives, or in the cash-for-comment economists list. He must have had second thoughts.’ http://sciencecorruption.com/ATN182/01008.html. 65. https://ppe.mercatus.org/mario-rizzo. 66. The Ludwig von Mises Fellowships in the Social Sciences. 67. MPS Archives Box 4.7. 68. https://www.lewrockwell.com/2016/02/murray-n-rothbard/totaldemolition-milton-friedman/. 69. CLS Archives Boxes 1.1, 4.10, 4.11.

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70. CLS Archives Box 4.9. 71. CLS Archives Box 1.1. 72. MPS Archives Box 82. 73. CLS Archives Box 1.1. 74. http://www.sourcewatch.org/index.php?title=Manhattan_Institute_ for_Policy_Research. 75. http://www.city-journal.org/article01.php?aid=1631. 76. MPS Archives Box 75. 77. CLS Archives Box 1.1. 78. CLS Archives Box 5.1. 79. Joseph Kalt (10 August 1976) to Grinder. CLS Archives Box 1.5. 80. CLS Archives Box 4.9. 81. MPS Archives Box 22.8. 82. MPS Archives Box 82. 83. https://www.industrydocumentslibrary.ucsf.edu/tobacco/docs/#id= fknv0140. 84. IHS Archives Box 11. 85. http://www.citadel.edu/root/images/business_administration/2016_ faculty_cvs/ebeling_cv_2016.doc.pdf. Accessed 5 October 2017. 86. https://www.libertarianism.org/lr/LR7611.pdf. 87. http://www.citadel.edu/root/images/business_administration/2016_ faculty_cvs/ebeling_cv_2016.doc.pdf. Accessed 5 October 2017. 88. http://guidohulsmann.com/Doctoralstudies.html. Accessed 5 October 2017. 89. http://leginfo.legislature.ca.gov/faces/codes_displaySection. xhtml?lawCode=PEN§ionNum=115. 90. http://noticias.universia.cl/vida-universitaria/noticia/2004/03/15/349152/ destacado-economista-austriaco-visita-universidad.html. 91. MPS Archives Box 69. 92. MPS Archives Box 54.2. 93. 1981 and 1983 MPS Members Directory. Davenport Archives Box 23.3. MPS Archives Box 22.8. 94. MPS Archives Box 69. 95. MPS Archives Box 72. 96. MPS Archives Box 82. 97. MPS Archives Box 74. 98. MPS Archives Box 89. 99. Hayek Papers Box 119.5.

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100. Davenport Archives Box 4.47. 101. N.d. Davenport Archives Box 16.4. 102. Davenport Archives Box 14.3. 103. An ‘hourglass’ income distribution describes a trickled-up plutocracy, a shrinking middle class, and an expansion of the ‘lower orders.’ 104. https://www.peter-boettke.com/curriculum-vita/. Accessed 5 October 2017. 105. https://www.omicrondeltaepsilon.org/handbook.html#fisher. 106. Email to Leeson (9 October 2017). 107. https://www.peter-boettke.com/curriculum-vita/. Accessed 5 October 2017. 108. https://www.peter-boettke.com/curriculum-vita/. Accessed 5 October 2017. 109. His secretary, Gloria Valentine, regularly delivered mail to his apartment. 110. When Milton awoke after an operation, he asked Rose to help him sit up. She replied: ‘No – you must learn to do that yourself.’ Within a few months, Milton was able to walk again, unaided. 111. Boettke doesn’t explain what ‘chart legalization policy’ means. 112. Davenport Archives Box 2.64. 113. http://www.cianj.org/about-us/history/. 114. http://www.fffe.org/about-us/philosophy/. 115. MPS Archives Box 81. 116. To Feulner. MPS Archives Box 82. 117. http://www.citadel.edu/root/images/business_administration/2016_ faculty_cvs/ebeling_cv_2016.doc.pdf. Accessed 5 October 2017. 118. https://history.fee.org/publications/peter-j-bocttke-to-bettinabien-greaves-letter/. 119. https://www.peter-boettke.com/curriculum-vita/ Or was Boettke referring to a job that he applied for and didn’t get? Accessed 5 October 2017. 120. http://www.wju.edu/academics/bus/iscm/speaker1.asp. 121. https://www.markskousen.com/_/publications/investor-cafe/investor-cafe-faq/#13265. Accessed 1 August 2017. 122. https://www.markskousen.com/global-investing-giant-jim-rogerswarns-of-cyclical-downturn-soon/. Accessed 1 August 2017. 123. https://www.markskousen.com/offer/fs-biotech/?source=FSBI11. Accessed 1 August 2017.

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124. http://www.foxnews.com/transcript/2012/05/07/bin-laden-braggingrights-should-president-obama-claim-credit.html. 125. MPS Archives Boxes 55.4 and 55.5. 126. Hayek (1978) asserted that Keynes had gazumped him: ‘it sounds almost ludicrous today that it shouldn’t have been generally known, but while I was working in America in ‘23 and ‘24, my first essay on monetary theory was never published because Keynes’s [1923] book came out–the one you mentioned, the Tract on Monetary Reform. But I had taken great pains to demonstrate what I thought was the new argument that he couldn’t at the same time have a stable price level and stable exchange rates, which was a completely new idea. But Keynes put it that way, and so there was no point in publishing my article. [laughter]’ Friedrich Hayek, interviewed by Armen Alchian 11 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 127. CLS Archives Box 1.2. 128. Letter to Friedman (18 June 1979). Friedman Archives Box 152.1.

References Archival Insights into the Evolution of Economics (and Related Projects) Leeson, R. (2000). Inflation, Disinflation and the Natural Rate of Unemployment: A Dynamic Framework for Policy Analysis. The Australian Economy in the 1990s (pp. 124–175). Sydney: Reserve Bank of Australia. Leeson, R. (2003). Ideology and the International Economy: The Decline and Fall of Bretton Woods. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). 2013. Hayek: A Collaborative Biography Part I Influences From Mises to Bartley. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2015a). Hayek: A Collaborative Biography Part II Austria, America and the Rise of Hitler, 1899–1933. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2015b). Hayek: A Collaborative Biography Part III Fraud, Fascism and Free Market Religion. Basingstoke: Palgrave Macmillan. Leeson, R. (2017). Hayek: A Collaborative Biography Part IX The Divine Right of the ‘Free Market. Basingstoke: Palgrave Macmillan.

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Leeson, R., & Palm, C. (2016). The Collected Writings of Milton Friedman. Hoover Institution Website. https://miltonfriedman.hoover.org/collections. McVicar, M. (2017). Christian Reconstructionism and the Austrian School of Economics. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part IX: The Divine Right of the ‘Free’ Market. Basingstoke: Palgrave Macmillan. Theroux, D. (2015). Hayek and Me. In R. Leeson (Ed.), Hayek: A Collaborative Biography: Part V Hayek’s Great Society of Free Men. Basingstoke: Palgrave Macmillan.

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Boettke, P. J. (2007). Boettke on Austrian Economics. EconTalk Episode with Pete Boettke Hosted by Russ Roberts. http://www.econtalk.org/ archives/2007/12/boettke_on_aust.html. Boettke, P. J. (2009, August 4). Setting the record straight. Coordination Problem. http://austrianeconomists.typepad.com/weblog/2009/08/settingthe-record-straight-on-austropunkism-and-the-sociology-of-the-austrianschool-of-economics.html. Boettke, P. J. (2010a, January 25). Exclusive Interview. Peter Boettke: The Transformative Rise of Austrian Economics By Anthony Wile. Daily Bell. http://www.thedailybell.com/exclusive-interviews/anthony-wile-peterboettke-the-transformative-rise-of-austrian-economics/. Boettke, P. J. (2010b). Scale, Scope and the Political Economy of the State. Coordination Problem 20. http://www.coordinationproblem.org/2010/10/ scale-scope-and-the-political-economy-of-the-state.html. Boettke, P. J. (2012). Interview with Peter Boettke. Rationality Unlimited. https://rationalityunlimited.wordpress.com/2012/04/02/interview-withpeter-boettke/. Boettke, P. J. (2014, June 7). Robert Leeson, Hayek and the Underpants Gnome. Coordination Problem. http://www.coordinationproblem.org/2014/06/robertleeson-hayek-and-the-underpants-gnomes.html. Boettke, P. J. (2016, September 1). Richard Ebeling and FFF’s Austrian Economics Project. Coordination Problem. http://www.coordinationproblem.org/2016/09/richard-ebeling-and-fffs-austrian-economics-project.html. Brulle, R. J. (2014). Institutionalizing Delay: Foundation Funding and the Creation of U.S. Climate Change Counter-Movement Organizations. Climatic Change, 122(4), 681–694. Buchanan, J. (1986, October 26). Why Governments ‘Got Out of Hand.’ The New York Times. Buchanan, J. (1992). I Did Not Call Him ‘Fritz’: Personal Recollections of Professor F. A. v. Hayek. Constitutional Political Economy, 3(2), 129–135. Buckley, W. F., Jr., & Bozell, L. B. (1954). McCarthy and his Enemies: The Record and its Meaning. Chicago: Henry Regnery. Bump, P. (2016, January 29). In 1927, Donald Trump’s Father Was Arrested After a Klan Riot in Queens. Washington Post. https://www.washingtonpost. com/news/the-fix/wp/2016/02/28/in-1927-donald-trumps-father-was-arrested-after-a-klan-riot-in-queens/?utm_term=.8e701522912f. Caldwell, B. (2004). Hayek’s Challenge: An Intellectual Biography of F.A. Hayek. Chicago: University of Chicago Press.

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Hayek, F. A. (1962, July 1). The Moral Element in Free Enterprise. The Freeman. https://fee.org/articles/the-moral-element-in-free-enterprise/. Hayek, F. A. (1975). Face the Press. https://mises.org/library/ hayek-meets-press-1975. Hayek, F. A. (1976a). Law, Legislation and Liberty: Volume II The Mirage of Social Justice. Chicago: University of Chicago Press. Hayek, F. A. (1976b). Choice in Currency a Way to Stop Inflation. London: Institute of Economic Affairs. Hayek, F. A. (1977, September). An Interview with Friedrich Hayek. By Richard Ebeling. Libertarian Review, 10–18. Hayek Archives Box 109.14. Hayek, F. A. (1978). Oral History Interviews. Centre for Oral History Research, University of California, Los Angeles. http://oralhistory.library. ucla.edu/. Hayek, F. A. (1980). This Month’s Interviews. The American Council Economic Report, 1–11. Hayek, F. A. (1983, February). Interview with F.A. Hayek. Cato Policy Report. http://www.cato.org/policy-report/february-1982/interview-fa-hayek. Hayek, F. A. (1984, May–June). Exclusive Interview with F.A. Hayek. Cato Policy Report. https://www.cato.org/policy-report/mayjune-1984/ exclusive-interview-fa-hayek. Hayek, F. A. (1988). The Fatal Conceit The Errors of Socialism. The Collected Works of F.A. Hayek (W. W. Bartley III, Ed.). Chicago: University of Chicago Press. Hayek, F. A. (1994). Hayek on Hayek an Autobiographical Dialogue. Supplement to the Collected Works of F.A. Hayek (S. Kresge & L. Wenar, Eds.). Chicago: University of Chicago Press. Hayek, F. A. (1995). Contra Keynes and Cambridge The Collected Works of F.A. Hayek (B. Caldwell, Ed.). Chicago: University of Chicago Press. Hayek, F. A., Read, L., Hazlitt, H., Harper, F. A., & Velasco, G. (Eds.). (1971). Towards Liberty Essays in Honor of Ludwig von Mises (Vol. 2). Menlo Park: Institute for Humane Studies. Hoover, H. (1952). The Memoirs of Herbert Hoover, Vol. 3: The Great Depression 1929–1941. New York: Macmillan. Hülsmann, J. G. (2007). Mises: The Last Knight of Liberalism. Auburn, AL: Ludwig von Mises Institute. Hülsmann, J. G. (2008). Ethics of Money Production. Auburn, AL: Ludwig von Mises Institute.

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Hunold, A. (Ed.). (1961a). Freedom and Serfdom: An Anthology of Western Thought. Holland: Springer, the Netherlands. Hunold, A. (1961b). How Mises Changed My Mind. Mises Daily. https:// mises.org/library/how-mises-changed-my-mind. Hunold, A. (1962). How the Mont Pelerin Society Lost it’s Soul. Mimeo. Zurich. Hayek Archives Box 129.10. Ickes, H. L. (1953). The Secret Diary of Harold L. Ickes: The First Thousand Days. New York: Simon & Schuster. Jewkes, J. (1948). Ordeal by Planning. London: Macmillan. Johnson, P. B. (1988). Intellectuals. New York: Harper. Keynes, J. M. (1923). A Tract on Monetary Reform. London: Macmillan. Keynes, J. M. (1936). General Theory of Employment, Interest and Money. New York and London: Harcourt, Brace. Koether, G. (2000). A Life Among Austrians. Austrian Economics Newsletter, 20(3). https://mises.org/system/tdf/aen20_3_1_0.pdf?file=1&type=document. Lal, D. (2009). The Mont Pelerin Society: A Mandate Renewed. Mont Pelerin Society Presidential Address. http://www.econ.ucla.edu/lal/MPS%20 Presidential%20Address%203.5.09.pdf. Lester, J. C. (2006). Review of Conway, D. In Defence of the Realm: The Place of Nations in Classical Liberalism Journal of Libertarian Studies, 20(3). Leube, K. R. (1976–1977). Hayek’s Perceptions of the ‘Rule of Law.’ Intercollegiate Review, 105–110. Leube, K. R. (1984, July). Essay: Hayek, Orwell, and the Road to Serfdom. Prometheus, 2(3). http://www.lfs.org/index.htm. Leube, K. R. (2003). Some Remarks on Hayek’s The Sensory Order. Laissez Faire 12–22. http://laissezfaire.ufm.edu/images/7/79/Laissezfaire18_2.pdf. MacLean, N. (2017). Democracy in Chains: The Deep History of the Radical Right’s Stealth Plan for America. New York: Viking. Markowitz, M., & Rosner, D. (2001). Deceit and Denial: The Deadly Politics of Industrial Pollution (California/Milbank Books on Health and the Public). Berkeley, CA: University of California Press. Martin, A. (2010, September). The Analects of Boettke. Journal of Private Enterprise, 26(1), 125–141. Mayer, J. (2010, August 30). Covert Operations: The Billionaire Brothers Who Are Waging a War Against Obama. New Yorker. https://www.newyorker. com/magazine/2010/08/30/covert-operations. Mayer, J. (2016). Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. New York: Penguin.

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McCormick, D. (1976). Taken for a Ride: The History of Cons and Con-men. London: Hardwood Smart. McCormick, D. (pseudonym: Deacon, R.) (1979). The British Connection Russia’s Manipulation of British Individuals and Institutions. London: Hamish Hamilton. McFadden, R. (2014, April 2). Charles Keating, 90, Key Figure in ’80s Savings and Loan Crisis, Dies. New York Times. https://www.nytimes. com/2014/04/02/business/charles-keating-key-figure-in-the-1980s-savingsand-loan-crisis-dies-at-90.html. Meier, B. (1996, August 25). Herbert Cornuelle, 76, Dies; Youngest Dole Co. President. New York Times. http://www.nytimes.com/1996/08/25/us/herbert-cornuelle-76-dies-youngest-dole-co-president.html. Mises, L. (1951 [1932]). Socialism: An Economic and Sociological Analysis (J. Kahane, Trans.). New Haven: Yale University Press. Mises, L. (1956). The Anti-Capitalist Mentality. Canada: D. Van Nostrand Company. Mises, M. (1984). My Years with Ludwig von Mises (2nd ed.). Cedar Falls, IA: Center for Futures Education. Mises, L. (1985 [1927]). Liberalism in the Classical Tradition (R. Raico, Trans.). Auburn, AL: Mises Institute. Mises, L. (1998 [1949]). Human Action A Treatise on Economics the Scholars Edition. Auburn, AL: Ludwig von Mises Institute. Mises, L. (2007 [1958]). Mises and Rothbard Letters to Ayn Rand. Journal of Libertarian Studies, 21(4), 11–16. Montes, L. (2015). Friedman’s Two Visits to Chile in Context. http://jepson.richmond.edu/conferences/summer-institute/papers2015/LMontesSIPaper.pdf. Murdoch, R. (1990). The War on Technology. City Journal. Manhattan Institute Third Annual Walter B. Wriston Lecture in Public Policy. http:// www.city-journal.org/article01.php?aid=1631. North, G. K. (1971). Reason, Neutrality and the Free Market. Modern Age, 138–142. http://www.mmisi.org/ma/15_02/north.pdf. North, G. K. (1986). Editor’s Introduction to Robert L. Thoburn’s the Children’s Trap the Biblical Blueprint for Education. Tyler, TX: Dominion Press. https:// www.garynorth.com/freebooks/docs/pdf/the_children_trap.pdf. North, G. K. (1999, August/September). Recollections of the 1974 South Royalston Conference on Austrian Economics. Biblical Economics Today, 21(5). http://www.garynorth.com/BET-Aug1999.PDF.

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North, G. K. (2010). It all began with Fred Schwartz. In W. Block (Ed.), I Chose Liberty: Autobiographies of Contemporary Libertarians. Auburn, AL: Ludwig von Mises Institute. North, G. K. 2012. Disobedience and Defeat: An Economic Commentary on the Historical Books. Dallas, GA: Point Five Press. https://www.garynorth.com/ DisobedienceAndDefeat.pdf. Orwell, G. (1933). Down and Out in Paris and London. London: Victor Gollancz. Raimondo, J. (2000). An Enemy of the State: The Life of Murray N. Rothbard. New York: Prometheus Books. Redburn, T. (1993, December 31). Conservative Thinkers Are Insiders; It’s Now Their City Hall, and Manhattan Institute Is Uneasy. New York Times. http://www.nytimes.com/1993/12/31/nyregion/conservative-thinkers-areinsiders-it-s-now-their-city-hall-manhattan-institute.html?pagewanted=all. Revere, R. H. (1959). Senator Joe McCarthy. London: Methuen. Rizzo, M. (2010, May 20). Economic Perspectives Against the Welfare State. Christian Science Monitor. https://www.csmonitor.com/Business/ ThinkMarkets/2010/0520/Economic-perspectives-against-the-welfare-state. Rockwell, L. H. Jr. (1989, November). The Mega-Economic Threat. Free Market, 7(11). Rothbard, M. N. (1971, February). Friedman Unravelled. The Individualist, 3–7. Rothbard, M. N. (1981, January–April). It Usually Ends with Ed Crane. Libertarian Foruml, 14(1–2). https://www.lewrockwell.com/1970/01/ murray-n-rothbard/it-usually-ends-with-ed-crane/. Rothbard, M. N. (1990). A Conversation with Murray N. Rothbard. Austrian Economics Newsletter, 2(2). https://mises.org/library/rothbard-reader/ html/c/368. Rothbard, M. N. (1992, March 3). His Only Crime Was Against the Old Guard. Los Angeles Times. https://history.fee.org/publications/his-onlycrime-was-against-the-old-guard/. Rothbard, M. N. (1994, July). Revolution in Italy! Rothbard-Rockwell Report, 5(7), 1–10. http://www.unz.org/Pub/RothbardRockwellReport1994jul-00001. Rothbard, M. N. (2001 [1962]). Man, Economy and State, with Power and Market: Scholars’ Edition. Auburn, AL: Ludwig von Mises Institute. Rothbard, M. N. (2007). Betrayal of the American Right. Auburn, AL: Ludwig von Mises Institute.

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Rothbard, M. N. (2010). Strictly Confidential: The Private Volker Fund Memos of Murray N. Rothbard (D. Gordon, Ed.). Auburn, AL: Ludwig von Mises Institute. Rothbard, M. N. (2012 [1979]). Myth and Truth About Libertarianism. https://mises.org/library/myth-and-truth-about-libertarianism. Rubin, H. (2007, September 15). Ayn Rand’s Literature of Capitalism. New York Times. http://www.nytimes.com/2007/09/15/business/15atlas.html. Salerno, J. (2002). The Birth of Austrian Economics—In Light of Austrian Economics. The Quarterly Journal of Austrian Economics, 5(4), 111–128. https:// pdfs.semanticscholar.org/243e/a7297ce00a52d97e570254d25e86a757f443.pdf. Schlesinger, A. M. (1960). The Politics of Upheaval. Boston: Houghton Mifflin. Schmidt, K. M. (2011). Not Afraid to Tell the Truth: Exposing Apostasy and Conspiracy of Silence in the Last Days. Bloomington: Xlibris ebook. Schulman, D. (2014). Sons of Wichita: How the Koch Brothers Became America’s Most Powerful and Private Dynasty. New York: Grand Central Publishing. Shenfield, A. 1983. Myth and Reality in Anti-Trust. Fourteenth Wincott Memorial Lecture, delivered at St John’s, Smith Square, London SW1, Thursday, 20 October 1983. Occasional Paper 66. London: Institute of Economic Affairs. Shenfield, A. (1988 [1968]). On the State of Bad Economics. London: Libertarian Alliance. http://www.libertarian.co.uk/lapubs/econn/econn012.pdf. Shenoy, S. (2003). An Interview with Sudha Shenoy. Austrian Economics Newsletter, 1–8. http://mises.org/journals/aen/aen23_4_1.pdf. Simon, H. (1991). Models of My Life. New York: Basic Books, Sloan Foundation Series. Simon, E., Simon, S., Robson, W. A., & Jewkes, J. (2015 [1937]). Moscow in the Making. London: Routledge. Skousen, M. (1991). Economics on Trial: Lies, Myths and Realities. Homewood, IL: Business One Irwin. Skousen, M. (1997). The Perseverance of Paul Samuelson’s Economics. Journal of Economic Perspectives, 11(2), 137–152. Skousen, M. (2000, December). Dr. Jekyll and Mr. Robhard. Inside Liberty, 14(12), 52–53. http://mises.org/journals/liberty/Liberty_Magazine_ December_2000.pdf. Skousen, M. (2008, February 28). Bill Buckley and Me a True Story. Human Events Powerful Conservative Voices. http://www.humanevents. com/2008/02/28/bill-buckley-and-me-a-true-story/.

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Skousen, M. (2009). The Making of Modern Economics: The Lives and Ideas of the Great Thinkers (2nd ed.). London: M.E. Sharpe. Sobran, M. J., Jr. (1975). Hayek and the Angels. National Review. Hayek Archives Box 167. Stigler, G. J. (1988). Memoirs of an Unregulated Economist. New York: Basic Books. Stocks, M. D. (1963). Ernest Simon of Manchester. Manchester: University of Manchester Press. Sublett, S. (1987, July 30). Libertarians’ Storied Guru. Washington Times. MPS Archives Box 45.7. Terrell, T. D. (2004, June 1). Fredrick Nymeyer: A Pioneer of Christian Libertarianism. Chalcedon. https://chalcedon.edu/magazine/frederick-nymeyer-a-pioneer-of-christian-libertarianism, https://mises.org/system/tdf/The%20 Economics%20and%20Ethics%20of%20Frederick%20Nymeyer. pdf?file=1&type=document. Thommesen, S., McCallie, J., & Shah, D. (1986). Hermeneutics a Conference Report. Austrian Economics Newsletter. https://mises.org/system/tdf/aen6_ 3_1_0.pdf?file=1&type=document. Trilling, L. (2008 [1950]). The Liberal Imagination Essays on Literature and Society. New York: New York Review of Books. Tugwell, R. (1972). In Search of Roosevelt. Cambridge, MA: Harvard University Press. Vaughn, K. (1994). Austrian Economic in America. Cambridge: Cambridge University Press. Vidal, J. (2000, November 14). Biopirates Who Seek the Greatest Prizes. The Guardian. https://www.theguardian.com/science/2000/nov/15/genetics2? INTCMP=SRCH. Wheeler, T. (1975, September 26). Mont Pelerin Society: Microeconomics, Macrofellowship. National Review. Wright, T. C., & Oñate, R. (2005). Chilean Diaspora. In C. R. Ember, M. Ember, & I. Skoggard (Eds.), Encyclopedia of Diasporas: Immigrant and Refugee Cultures Around the World (Vol. II, pp. 57–65). New York: Springer.

5 ‘Consistent Doctrine,’ ‘The Morals of the Market,’ and the ‘Filthy Load of Pinks’

Blundell, the President of the Charles G. Koch Charitable Foundation, attended the 1992 MPS meeting in Vancouver accompanied by ten Koch Fellows—including James Akiakpor (CSU Hayward/East Bay) and the post-graduate student and editor of The Collected Works of F.A. Hayek: The Fortunes of Liberalism, Peter Klein (Hayek 1992a).1 Feulner (7 July 1992) awarded ‘Dr’ Leube $1000 for a Roe Fellowship for the 1992 MPS meeting (Leube had self-nominated).2 Also in attendance was the Indian-born Shyam Kamath who set up CSU’s Transnational Executive MBA programme.3 A decade later, Leube was abruptly removed from the CSU payroll after their Viennese MBA partner, IMADEC, had asked to see evidence that he had any of the post-­ secondary that had underpinned his full Professorship and ‘legal’ US immigration status (Coleman 2002). In ‘From Isolation, Through Courage To Immortality,’ Harris and Seldon provided a Randian eulogy to the 1992 MPS meeting: ‘In prime justification of markets Hayek put the moral claims of liberty above the material benefits of economic progress.’4 The previous year, Feulner (19 November 1991) told Hayek that he had attended the White House ceremony to witness his in absentia award of the Presidential © The Author(s) 2018 R. Leeson, Hayek: A Collaborative Biography, Archival Insights into the Evolution of Economics, https://doi.org/10.1007/978-3-319-77428-2_5

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Medal of Freedom: what a ‘great’ joy it must have been for Hayek to see his ideas ‘conquer’ the world.5 In 1947, as Hayek sought tax-exempt funding for his post-­ ‘bootleg’-divorce lifestyle, the MPS Statement of Aims declared: ‘The central values of civilization are in danger … Believing that what is essentially an ideological movement must be met by intellectual argument and the reassertion of valid ideals, the group, having made a preliminary exploration of the ground, is of the opinion that further study is desirable inter alia in regard to the following matters: The analysis and exploration of the nature of the present crisis so as to bring home to others its essential moral and economic origins.’6 The crises of the Ancien Regime (feudalism and then neo-feudalism) had economic origins: how to extract resources from the Third Estate without the taxpayer’s representatives extracting concessions and heads (e.g. 1649 and 1793). The ‘free’ market turns the environment into an externality-generating open sewer—Hayek’s genius (like Rand’s) was to puff-up polluters by persuading them that they were morality promoters. As Rothbard (2010 [1958], 390) explained: Romantic fiction has been denounced as ‘escapism,’ meaning that the housewife or the tired businessman is trying to escape from his daily cares into a world of enjoyment. But far from being philistinism, we have seen that such ‘escape’—the experiencing of a world where one’s values have come true—is precisely the noblest function of fiction. And since Atlas Shrugged is our day’s most striking example of important romantic fiction, we may say that just as Ayn Rand’s explicit moral, political, and economic philosophy redeems the tired businessman from the weight of guilt he has long suffered for his productiveness and profit seeking, so her aesthetic principles redeem him from his ‘sin’ of seeking in literature for values in action that he can admire and applaud—including noble heroes who vanquish villains and achieve their goals. In short, Miss Rand, by the construct of her novel, is saying that the modern intellectuals are just as wrong in condemning the tired businessman’s ‘philistinism’ as they are in attacking his method of livelihood.

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Atlas Shrugged allows the reader to jump from romantic fiction to ‘free’ market public policy promotion—it presents very clearly a world that not only ought to be, but can be, and its concrete relation to our world is evident. Hence, Miss Rand’s own label for her aesthetics of ‘romantic realism,’ or perhaps, ‘realistic romanticism. [Rothbard’s emphases]’

Hayek also solved the ‘optimal extraction’ problem from the tax-exempt donor class (many of whom were ‘self-made’ men) by making them feel—in return for their donations—that they had been co-opted into the Second Estate (through MPS membership). This may be the subtext of Friedman’s (1970) ‘Social Responsibility of Business’: ‘there is one and only one social responsibility of business–to use its resources and engage in activities designed to increase its profits so long as it stays within the rules of the game, which is to say, engages in open and free competition without deception or fraud.’ In the Wall Street Journal, Chamberlain (1974) noted that MPS membership had risen to 300 ‘with many more than that now clamouring to get in.’ In 1972, Friedman had tried to close the MPS down—he then told Pat Buchanan that he had ‘long believed that there is no justification for tax exemption for churches, for universities, for educational foundations, for charitable foundations, or what-not’ (2 October 1973).7 He continued to object to the ‘voyeurs’ and ‘tourists’ who increasingly polluted the atmosphere at MPS meetings (Chapter 1, above). Hayek (1962) promoted ‘The Moral Element in Free Enterprise.’ And at the Cato Institute, Hayek (1984) explained that he had ‘come to the conclusion that we have been able to form what I now call the extended society, an order far exceeding our vision and knowledge because of the evolution of another gift quite distinct from intelligence. That’s the gift of our morals, particularly the institutions of property and the family, which we have never invented, which have succeeded because the groups who practiced them—without understanding why—expanded more than others.’

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After promoting the deflation that facilitated Hitler’s rise to power, Hayek reinvented himself in America on a 1945 Road to Serfdom promotional tour: I had no idea how to give popular lectures. I got there, and stood up and began ‘Ladies and Gentleman, no doubt you all know …’ Of course, I had no idea what they knew. But I discovered I could do it! I had the actor’s gift. (cited by Allen 1983)

In September 1945, Hayek (1945) published ‘The Use of Knowledge in Society’ in the American Economic Review. How ‘moral’ are morality-promoters? In ‘The Mises We Never Knew,’ Rothbard (2005 [1978]) reported that Mises had lied to him: ‘Please, I am not yet old enough to write an autobiography.’ Referring to the Mises University, Richard Vedder (1999) exclaimed: ‘I wish we could have a whole university that operates this way.’ And at ‘Mises University at Stanford,’ Rothbard (1990b) lied to his audience: with respect to Mises’ reputation for ‘abrasiveness,’ he ‘never saw it.’ Simultaneously, Rothbard (1990a) recalled that after a comment about monopoly theory, Mises called him a ‘Schmollerite. Although nobody else in the seminar realized it, that was the ultimate insult for an Austrian.’8 Vedder (1999)—noting that ‘You can support any theory of economics you want to depending on how you manipulate the data’—reported that Rothbard ‘would always say to me, if you can tell the Austrian story with regressions, go ahead and do it.’ According to Craig Freeman (2003): ‘In the eleven years that George Stigler [1947–1958] laboured at Columbia University he had exactly one dissertation student.’ According to Rothbard (23 November 1946), Stigler—a year before he arrived at Columbia—was supervising his Columbia Ph.D.—which subsequently took eleven years to complete. The explanation offered by martyr-mythology is that Rothbard had ‘offended’ Burns, who was ‘horrified by Rothbard’s anti-central bank and pro-gold standard position’ (Rockwell 2007). Friedman—and maybe Burns as well—was convinced that Rothbard’s use of the surrender values of insurance policies as part of the money supply was (to put it mildly) idiosyncratic. In Rothard’s

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lectures on economic history, Gene Epstein (2011) ‘caught him in a rare moment of hypocrisy. While he blasted the use of price indexes in his writings, he never hesitated to use a price index to prove a point about historical trends. He was of course quite right to criticize the pseudoscience of price indexes. But he might have acknowledged more explicitly that they sometimes come in handy as a rough approximation of price trends.’ But then Epstein added: ‘Those who read and love Rothbard would be cheating themselves if they did not also read Mises’s many books.’ Between January 1979 and 1982, Rothbard, Crane and Ed Clark (the 1980 Libertarian Party Presidential candidate—David Koch’s running mate) raised funds for the Center for Libertarian Studies (CLS) through the Libertarian Supper Club of Orange County, whose donors subscribed to what appears to be a well-heeled cult: ‘we’ are engaged in a ‘mutual’ search for ‘truth.’ They were ‘devoted’ to the principles of ‘individual liberty and personality responsibility,’ and sought the ‘proper’ application of those principles in their ‘own’ lives.9 The funds raised from such activities were used to pay, for example, $250 to the academic fraud Shenoy to make an oral presentation at the CLS Stanford University symposium on ‘Monetary Crisis from an Austrian School Perspective’ plus an additional $250 if she wrote-up her remarks in publishable form.10 What does the ‘free’ market look like? As the MPS broke-up into what its resigning President Röpke (1962) called ‘internal warfare,’ Hunold (1962) complained that he had been out-manoeuvred by Jewkes’ offer of ‘free board and lodging’ and ‘travel expenses’ to the next MPS meeting. What, he asked, were the ‘sources of these enormous funds’? In January 1960, the Mont Pelerin Society Quarterly announced that Otto the Habsburg Pretender had been ‘elected’ as a member.11 Hunold (n.d.) then complained to Morley about the subversive activities of the ‘Habsbourgian group.’12 The ‘free’ market is a magnet for homosexuals seeking liberation from discrimination, and theocrats who seek to publically stone them to death. Three (and, including Kresge, possibly four) ‘free’ market biographers struggled over monopoly rights. Bartley won the first round; Shenoy and Leube the second (the ‘Obergurgl document’); before Bartley

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(and, after his death, Kresge) won the third. Caldwell inherited these monopoly rights from Kresge (Leeson 2013, Chapter 9). The Mainichy Daily News reported on Hayek’s visit to Tokyo: ‘Nobel Laureate Says Society Overdependent On Intelligence.’13 After five years of studying undergraduate economics, Shenoy was awarded a lower-­ second class degree in economic history—below the conventional cutoff score for entry into graduate school. She obtained lifetime tenure not through rules-constrained competition but through the ‘free’ market—special pleading by Hayek and the National Tertiary Education Union (of which she was a voluntary member). Shenoy (3 September 1997) faxed a letter to Feulner supporting Ebeling’s application for MPS membership because he would make a ‘genuine’ and ‘stimulating’ contribution. Presumably aware that Ebeling was regarded as a ‘total fool,’ Shenoy offered to lobby on his behalf (see below). George Roche III (27 March 1997) also told Feulner that he couldn’t think of a ‘scholar’ more suited to MPS ‘aims’ than his employee, Ebeling.14 At the MPS, Mises wallowed in sycophancy (Buchanan 1992, 130); and according to Robert Anderson (1999), similar attributes were required to survive at Roche’s Hillsdale College: All of us knew of his hidden and extraordinary temper, in stark contrast to his public image. You learned quickly the futility of ‘arguing with George’ or even disagreeing with him. One hundred percent approval and agreement were required.

Shenoy (31 August 1990) sent a fax (‘My Dear Ed’) asking Feulner to telephone her in Australia. Shenoy (30 August 1990) then sent Feulner (MPS Treasurer and future President) a statement about Cubitt having been involved in a ‘lesbian’ relationship with a younger woman. Kresge and Bartley, she stated, had had a ‘homosexual’ relationship; and after Bartley’s premature death, Kresge ‘cries every night.’15 When Laurence Hayek (10 May 1999) nominated Kresge as an MPS guest—for the second time—he added that the second general editor of The Collected Works of F.A. Hayek had last time received an invitation far too late for him to be able to attend.16

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According to Mises (2009/1978 [1940], 18–19), an ‘experienced adviser to the police considered houses for single men breeding grounds for homosexuality. It was on these grounds that I could not support their funding … Adolf Hitler was living in one at the time.’ The pan-Germanist Freiheitliche Partei Österreichs (FPÖ) had been founded in 1956 by Anton Reinthaller, a Nazi who had been jailed after their failed July 1934 Putsch. Reinthaller then sought to form a Nazi Pact with the Austro-Fascist Vaterländische Front (Fatherland Front)—and thus would have become Mises’ ally. When the FPÖ leader (1986–2000), Jörg Haider, entered Wolfgang Schüssel Österreichische Volkspartei (Austrian People’s Party) governing coalition, several countries imposed diplomatic sanctions on Austria—but Haider and the vice-chair of his Austrian Freedom Party were welcomed as guests at the 1998 MPS meeting.17 In ‘free’ market homophobic circles, homosexuality is synonymous with paedophilia—Kresge was routinely described as ‘the boy’ despite being Bartley’s age. His name was crossed out with a red line on the list of 1998 accepted MPS nominations with an accompanying note—‘Exception: Stephen Kresge.’18 What motivated Feulner (1997)—a devout Roman Catholic— to devote his life to the ‘free’ market? He closed his MPS Presidential address, with a quote from Pope John Paul II: We must not be afraid of the future. We must not be afraid of man. It is no accident that we are here. Each and every human person has been created in the ‘image and likeness’ of the One who is the origin of all that is. We have within us the capacity for wisdom and virtue. With these gifts, and with the help of God’s grace, we can build in the next century and the next millennium a civilization worthy of the human person, a true culture of freedom. We can and must do! And in doing so, we shall see that the tears of this century have prepared the ground for a new springtime of the human spirit.

According to the Think Tanked blog, Heritage paid Feulner $947,999 in 2008.19 In neoclassical terms, this is justified (his marginal revenue product exceeds his wage): Heritage has an annual budget of more than $80 million and a financial base of more than 600,000 donors (Miller 2013).

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Alive, Hayek had been a fund-raising asset; and his for-­ posthumous-consumption oral history interviews are being suppressed by his disciples (Leeson 2015a, Chapter 2). Dead, Mises is marketed as a martyred saint; but alive he had been a liability—a ‘problem child,’ as Fritz Machlup (14 March 1941) complained to Hayek.20 At NYU, Reisman (2001) and his fellow Austrians ‘all knew’ it was an ‘outrage’ that he didn’t have a ‘bigger academic position. But it was obvious why [emphasis added]. He was the greatest defender of capitalism in a time of rampant anticapitalism. Still, the injustice of it all is striking.’ For Reisman, Mises was the ‘model teacher and person.’ What Reisman (2010, 279) was ‘acutely aware of was that here, just a few feet away from me, was one of the outstanding thinkers in all of human history.’ The (non-Austrian) classical liberal Economist reviewed Mises’ (1956) Anti-Capitalist Mentality (‘Liberalism in Caricature,’ 13 April 1957): ‘This is a sad little book, from which admirers of its author—and these are many, even among those who radically disagree with his political conclusions—should be warned away. Professor von Mises has a splendid analytical mind and an admirable passion for liberty; but as a student of human nature he is worse than null and as a debater he is of Hyde Park standard … To find an equal dogmatism coupled with an equally simpliste view of the springs of conduct, an equal propensity for propping up dummies and knocking them down, an equal contempt for human facts coupled with an equally vituperative style, one would have to turn to the less sophisticated Marxists … The case for freedom needs making and re-making, tirelessly and ingeniously; but its cause is ill served by such stuff as this.’21 Although he denies it, Rockwell is widely suspected of being the co-author of the racist and homophobic Ron Paul Newsletters (Leeson 2017). But when pursuing tribal warfare, Rockwell (1996) professes great respect for scholarly standards: there can be ‘no excuse for errors of fact’ or ‘posthumous invention.’ Buckley (1996)—whose obituary of Rothbard is ‘error-ridden, confused, and dishonest’—‘was wrong to feign an interest in scholarship, make-up facts to suit his bias, and use them to defame a dead man whose life was devoted to the highest academic ideals.’

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According to Rockwell’s (2007) Truth: At a time when every second-rate European Marxist was getting a ­professorship at Harvard or Princeton, Mises was blackballed by U.S. universities as ‘too right-wing.’ Eventually Hazlitt and [Lawrence] Fertig were able to persuade NYU—where Fertig was a trustee—to allow Mises to be an unpaid visiting professor.

The evidence suggests that Mises’ personality and mode of discourse rendered him unwelcome in most, if not all, university departments: unlike many of his former students and associates, Mises had been unable to obtain a ‘suitable’ position at one of the major universities: Schumpeter, Haberler, Herbert von Beckerath, Goetz Briefs and Georg Halm were employed at Harvard; Machlup was at the new Rockefellerfunded University of Buffalo, and Oskar Morgenstern was at Princeton: apparently they were all unwilling or unable to obtain a position for Mises in their department (Hülsmann 2007, 846). Even public stoning theocrat was taken aback at Mises’ refusal to answer ‘irreligious’ questions. In Biblical Economics Today, North (1999; 1992, 57), the Mises Institute ‘Rothbard Medal of Freedom’ holder, recalled that Harper had pressed Mises to defend his system ethically. Harper told me that he asked Mises, ‘If socialism were found to be more efficient than capitalism, would you still oppose it?’ To which Mises answered: ‘But it isn’t more efficient than capitalism.’ Harper said Mises would not go beyond this statement; Harper repeated the question, and Mises repeated the answer.

Hayek (1978a) told Robert Bork that the ‘good scientist is essentially a humble person.’22 In the Preface to Mises’ Memoirs, Hülsmann (2009, x) insisted that Mises had a ‘deep-seated humility.’ And in his Memoirs, Mises (2009/1978 [1940], 78, 88) described German social scientists as ‘characterless imbeciles’: Keeping company with these men made it clear to me that the German people could no longer be saved; these characterless imbeciles were

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already an elite few, chosen from the best. The field they taught at the universities was the most critical to a political education. The educated, as well as the masses, treated them as ambassadors of the science. What was to become of a youth with such teachers?

Mises also sneered at the three University of Vienna Professors of Economics: ‘Spann was barely acquainted with modern economics,’ Count Ferdinand Degenfeld-Schonburg was ‘poorly versed in the problems of economics; the level of his instruction would have barely sufficed at a trade school of low rank,’ and Mayer was ‘without a facility for criticism, had never expressed an original thought, and had never really grasped what economics was all about.’ Mises had a tendency to make stark—and false—predictions. Newspapers reports of the 1923 Ludendorff and Hitler Bavarian Putsch stated that as a prelude to a march on Berlin, ‘Hitlerites stormed through the town and invaded first-class restaurants and hotels in search of Jews and profiteers’ (Walsh 1968, 289). Two years later, Hitler (1939 [1925], 518) asserted in Mein Kampf: ‘At the beginning of the war, or even during the war, if 12,000 or 15,000 of these Jews who were corrupting the nation had been forced to submit to poison gas … then the millions of sacrifices made at the front would not have been in vain.’ According to Hülsmann (2007, 560, n. 67), Mises ‘Presciently’ understood ‘Fascism.’ Having declared that the ‘victory of Fascism in a number of countries is only an episode in the long series of struggles over the problem of property,’ Mises (1985 [1927], 51) then belatedly discovered that ‘Fascism’ was a conveyor belt along which Jews like himself had their property confiscated: according to The Last Knight of Liberalism, he was ‘completely’ taken by surprise by the victory of Fascism and could ‘hardly believe’ what he read in the newspapers. According to his official biographer, this was the ‘only’ time he was ‘ever wrong’ in forecasting an important political or economic event (Hülsmann 2007, 750–751). In ‘Deception of Government Intervention,’ Mises (1964) told Christian Economics readers: ‘The intellectual and moral faculties of man can thrive only where people associate with one another peacefully. Peace is the origin of all human things, not—as Heraclitus said—war.

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But as human nature is, peace can be established and preserved only by a power fit and ready to crush all peacebreakers.’ Referring to those with whom he sought to form a Nazi-Austrian School Pact, Mises (1985 [1927], 48–49, 51) also asserted: ‘As soon as the first flush of anger had passed, their policy took a more moderate course and will probably become even more so with the passage of time. This moderation is the result of the fact that traditional liberal views still continue to have an unconscious influence on the Fascists.’ In his mendacious Memoirs, Mises (2009/1978 [1940], 55) took the high moral ground: How one carries on in the face of unavoidable catastrophe is a matter of temperament. In high school, as was custom, I had chosen a verse by Virgil to be my motto: Tu ne cede malis sed contra audentior ito (‘Do not give into evil, but proceed ever more boldly against it’). I recalled these words during the darkest hours of the [‘Great’] war.

Mises wrote these words from the safety of neutral Manhattan—he had abandoned Europe to the ‘Fascists’ he asserted ‘had saved European ­civilization’ and whose merits ‘will live on eternally in history’ (Mises 1985 [1927], 51). Hayek (1978a) told James Buchanan that the spontaneous order would have to be reconstructed by ‘several experiments in new amendments in the right direction, which gradually prove to be beneficial, but not enough, until people feel constrained to reconstruct the whole thing.’23 In ‘The Errors of Constructivism,’ Hayek (1978b [1970], 34) described early communists as being ‘dizzy with success’ in their efforts to subject ‘our human environment to the control of a human will.’ Ebeling (2016) was outraged by post-Communist Russia: Vladimir Putin’s annexation of Crimea, instigation of and participation in a virtual civil war in eastern Ukraine, and his recent military adventure in Syria all suggest that he, too, has imperial dreams to restore Russia to the ‘glory’ and super-power status that Stalin had left to the Soviet Union that Putin had served so loyally as a member of the KGB before the demise of the communist regime in 1991.

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Ignorance was one of the five ‘Giant Evils’ identified by the 1942 Beveridge Report.24 Two years later, in The Road to Serfdom, Hayek (2007 [1944], 88) perceptively noted that the market could not be trusted to prevent fraud: ‘Even the most essential prerequisite of its proper functioning, the prevention of fraud and deception (including exploitation of ignorance), provides a great and by no means fully accomplished object of legislative activity.’ Rothbard orchestrated ‘free’ market economists to chant ‘We want externalities’ (Blundell 2014, 100, n. 7); for Ebeling et al. ‘Deacon’ McCormick’s (1979) fraudulent The British Connection: Russia’s Manipulation of British Individuals and Institutions appears to resemble divine revelation—an anti-externalities bible. ‘Deacon’ McCormick (1934, 162; 1956, 158, 211) expressed ­stereotypical attitudes about ex-colonial Americans: the ‘immaturity of the American mind’25; he also planned to write a sequel, ‘The AngloAmerican Connection Russia’s Manipulation of American Individuals and Institutions’ (Leeson 2013, 192). Ebeling (1977) described the ‘IHS Sponsorship of Austrian Economics’—the revivalist meetings in South Royalton (1974), Hartford (1975), Windsor Castle (1976), Delaware (1977) and NYU (1978). In ‘Austrian Economics at New York University,’ Don Lavoie (1977) described the revival of Mises’ seminar and Rizzo’s appointment as a Post-Doctoral Fellow; and in ‘Austrian Economics at Rutgers University,’ the Austrian Economics Newsletter (1978) announced that Rutgers had ‘initiated a very promising undergraduate programme in Austrian economics,’ which Fink, Block, and Salerno had been recruited to teach. Ebeling became the Hillsdale College Ludwig von Mises Professor of Economics on the back of a seven-year ‘B. A. in Economics (1976)’ from California State College/University and an ‘M.S.’ or an ‘M. A. in Economics (1980), Rutgers University, New Jersey’—but, apparently, no non-Austrian-­ referred publications. His Ph.D. (1976–2000) took twenty four years (spread over three institutions) to complete. According to James Buchanan (14 April 1986), Ebeling was a ‘total fool.’26 Salerno (1996) saw the lack of non-Austrian-refereed publications as a strength: ‘The current Austrian boom is massive and international, and encompasses literally thousands of students, faculty and professors the world over. Thanks to this, we are experiencing another explosive

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burst of creative energy.’ Salerno related its mission not to ­disinterested scholarship but to ‘truth’ as a tool to ‘change history’: ‘Progress does not mean acceptance; it means the propagation and advancement of the truth. Austrian articles are appearing in mainstream journals, but this is a byproduct [Salerno’s emphasis] of our growing presence in the academic world. We shouldn’t crave acceptance by the mainstream; we should seek to displace it.’ Blundell (1990) told the Heritage Foundation that the ‘story’ of Hayek, Luhnow, Read, Harper and Fisher is a ‘story of heroes. Their courage and persistence are inspiring … They built a solid base. As long as we are not duped into believing either that the battle is won, or that we can now employ shortcuts, the future for a society of free and responsible individuals is indeed bright.’ Their ‘story’ was: ‘Be Utopian and believe in the power of ideas.’ In ‘Before Modern Collectivism: The Rise and Fall of Classical Liberalism,’ Ebeling (2014b) celebrated Mises and Hayek who argued that if the cause of liberty is to prevail once again, it is necessary for friends of freedom to not be afraid of being radical in their case for classical ­ ­liberalism—even ‘utopian’ in a right meaning of the term. To once more make it a shining and attractive ideal to imagine a world of free men who are no longer slaves to others, whether they be monarchs or majorities. What the advocates of unlimited modern democracy blurred in this conception of society as a ‘club’ is that clubs are normally considered to be voluntary associations of people who may share one or a variety of common interests and goals, but from which the individual may withdraw and resign if he comes not to share those goals or purposes any longer or decides that he disagrees with the means the other club members have chosen to try to achieve them.

In this Free-Market Liberalism essay, Ebeling (2014b) connected Utopia with the defining obsession of tax-funded Austrians: The modern ‘democratic club of society’ is one from which the individual cannot easily withdraw. Indeed, even if he strongly disagrees with the ends and/or means that the majority may have decided upon concerning

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some ‘social issue’ he is compelled to partly pay for it through compulsory taxation. He is also made to conform to what the political ‘club’ imposes under threat of fine, imprisonment and even physical harm if he resists.

In 1947, professional baseball had ‘gone negro’—to use Hayek’s phrase about banks. Jackie Roosevelt Robinson (1919–1972)—the grandson of a slave—broke the colour line when he was signed by the Brooklyn Dodgers (since the 1880s, racial segregation had forced AfricanAmerican to play in the ‘Negro leagues’). In 1948, Hubert Humphrey unintentionally provoked Senator Strom Thurmond’s Dixiecrats to walk out of the Democratic Party convention: ‘My friends, to those who say that we are rushing this issue of civil rights, I say to them we are 172 years late. To those who say that this civil rights programme is an infringement on states’ rights, I say this: The time has arrived in America for the Democratic Party to get out of the shadow of states’ rights and to walk forthrightly into the bright sunshine of human rights.’27 In the 1948 Presidential election, the Dixiecrats won South Carolina, Alabama, Louisiana and Mississippi. In a letter to ‘States Rights Democrats Jackson, Miss,’ Rothbard (11 May 1949) explained that his support for the Dixiecrats in the 1948 Presidential election ‘had not been ‘extremely enthusiastic, because, although I agreed wholeheartedly with the platform and Thurmond’s campaign speeches, I felt that it was keyed too much to purely Southern interests … I have always felt that it is imperative for the States Rights movement to establish itself on a nation-wide scale … Obviously, we are now living in a one-party system, a party of Socialists in fact if not in name, and only courageous Southern Democrats in Congress have so far blocked their programme … If things go on as they are, it is only a question of a few years for the socialist programme to go through and destroy this land of liberty … You, gentlemen, can be a means of succour for these millions—and not only these, but America itself.’28 Those members of Rose Friedman’s family who had not emigrated ‘all died in the Holocaust. We have never learned where or how.’ In 1950, while Milton worked on the Schuman Plan, Rose experienced trauma: it was very difficult for her to let their two children ‘run freely as they were accustomed to do at home because always there was the

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nagging fear that they might suddenly disappear. Of course I knew that they would no Nazis in the park that somehow there was always in my subconsciousness those terrible stories about what happened to Jewish children during the Nazi era. That trip to Germany haunted me for many years’ (Friedman and Friedman 1998, 3, 180). When Rothbard, Shenoy, Block, Fink, North, Ebeling (1974) et al. initiated the Orwellian-named ‘Institute of Humane Studies’ Austrian revival, one of the conference highlights was baiting Milton and Rose in person with the accusation that their son detected ‘latent fascist tendencies’ in his father: ‘Murray Rothbard made the whole affair fun’ (Shenoy 2003). The ‘Fascist’ or ‘Nazi’ label is a standard component of the discourse of ‘free’ market promoters. For example, the boss of Murdoch’s Fox News, Roger Ailes, described National Public Radio executives: ‘They are, of course, Nazis. They have a kind of Nazi attitude. They are the left wing of Nazism. These guys don’t want any other point of view. They don’t even feel guilty using tax dollars to spout their propaganda. They are basically Air America with government funding to keep them alive’ (cited by Kurtz 2010). ‘Lt. Col. Ebeling, PhD’ (2017b) also describes National Public Radio journalists as Nazis: ‘National Socialist Radio’; and in 1949, Rothbard assured the Mississippi States Rights Democrats that ‘National Socialism has always meant poverty, tyranny and war. America is slipping down the road and has already gone far; it must be restored to the right path if the great dream of our forefathers of a nation dedicated to liberty is not to vanish from the earth. Yours can be that mission.’29 When Rothbard read the first edition of Human Action (1949), the ‘whole thing just slipped into place, because everything made sense’ (cited by Hülsmann 2007, 894). Rothbard (1994) later defended Byron De La Beck with Jr., the Klu Klux Klan assassin of the Jackson, Mississippi, voter registration activist, Medgar Evers, because he had been convicted for being politically ‘incorrect.’ Rothbard was the first person Raico (2013) had met who defended ‘a fully voluntary society—nudge, nudge.’ In A Business Man Looks at Communism, Fred Koch (1960, 29), stated that the ‘colored man looms large in the Communist plan to take over America’; integration was a communist plot to ‘enslave both the white and black man.’

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According to Tim Dickinson (2014), Charles Koch fell under the sway of Robert LeFevre, a charismatic radio personality and founder of the Freedom School, a ‘whites-only libertarian boot camp.’ And according to an FBI dossier, in 1973 Fred Trump ordered an employee to ‘get rid of blacks’ from an apartment building and to avoid renting flats to them (Lusher 2017). James Buchanan complained that (the non-white) Professor M.P. Bhatt had attended too many MPS meetings as a guest. Richard Ware (22 February 1992) agreed with Buchanan: Bhatt—the Director of the State Bank of India—was ‘not up to snuff’ for MPS membership and should be excluded.30 When confronted with the prospect of having to deal with African-Americans, Hayek (5 March 1975) informed Neil McLeod at the Liberty Fund that he wished to find an alternative to his ‘gone negro’ Chicago bank.31 In 1975, Buchanan noted to MPS Secretary Harris that if Thomas Sowell were ‘elected’ to the MPS this would be a ‘first’ because ‘Sowell is, as you perhaps know, a black’ (cited by Schmelzer 2010, 34). To avoid offending Hayek’s sensibilities about seeing ‘the animal beneath the facade of apparent civilization’ when forced to watch ‘dancing negroes’ (Cubitt 2006, 23), were Sowell (and later Walter Williams) prevented from participating in MPS post-dinner festivities? The dancefloor was the place where ‘sensitive’ MPS issues were raised: Lord Harris (the son of a tramways inspector) committed a ‘faux pas’ by handing out flowers to all the ‘women working’ on the 1983 meeting—including Sally Pipes, who seemed a ‘bit upset’ because she was Assistant Director of the Fraser Institute and not just one of the ‘women.’ James Buchanan had ‘noticed it also & mentioned it to’ a future MPS President ‘on the dancefloor.’32 Ware worked for Loren Miller’s Citizens Research Council (1946– 1956) and then the Earhart and Relm Foundations (Secretary 1951–1970, trustee and president 1970–1984); and was ‘active in Republican Party activities, particularly during the 1964 presidential campaign of Barry Goldwater when he served as a policy analyst.’ Ware was also Nixon’s principal deputy assistant secretary of defense for international security affairs (1969–1970) and consultant in the office of the assistant secretary of defense (1970–1973).33

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Presuppositionalism is a school of apologetics that asserts that Christian faith is the only basis for rational thought—it presupposes that the Bible is divine revelation and that knowledge derived from other sources is fundamentally flawed. How reliable is divine revelation? According to Boettke (1995), Hayek ‘appeared to have lost interest in economic theory long ago.’ In stating that he wished ‘the ­economics profession was more Hayekian in nature,’ Boettke concluded: ‘But was Hayek a major figure in twentieth century scientific economics? OF COURSE [Boettke’s emphasis]. Hayek is the leading representative of mainline economics in the second half of the twentieth century (Mises and Buchanan being the others).’34 James Buchanan asked a declassed member of the outlawed Second Estate if the First Estate was required to maintain ‘free’ market outcomes: ‘you don’t see a necessity for something like a religion, or a return to religion, to instill these [Austrian] moral principles?’ Hayek (1978a) replied: ‘Well, it depends so much on what one means by religion. You might call every belief in moral principles, which are not rationally justified, a religious belief. In the wide sense, yes, one has to be religious. Whether it really needs to be associated with a belief in supernatural spiritual forces, I am not sure. It may be. It’s by no means impossible that to the great majority of people nothing short of such a belief will do.’35 Employers have a private incentive to avoid both the ‘higher power’ of full-cost pricing (Pigouvian taxes in the presence of externalities) and higher wages (in the presence of labour unions). Much of Hayek’s (1978a) career was devoted to fermenting war against labour unions and intellectual war between the (anti-Pigouvian) Austrian and (largely Pigouvian) British branches of the neoclassical school: ‘I believe there is a chance of making the intellectuals proud of seeing through the delusions of the past. That is my present ambition, you know. It’s largely concerned with socialism, but of course socialism and unlimited democracy come very much to the same thing. And I believe–at least I have the illusion–that you can put things in a way [emphasis added] in which the intellectuals will be ashamed to believe in what their fathers believed.’36 As Hayek founded the MPS, other Cold War ‘International Right’ institutions were also set up—usually by Crozier or the Habsburg

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Pretender (1912–2011); many were funded by oil companies and the CIA. The beneficiaries of the ‘unscrupulous methods’ of this global activism included Reagan (1911–2004), Franz Joseph Strauss (1915–1988), Pinochet (1915–2006), the Shah of Iran (1919–1980), and Thatcher (1925–2013). In the sequel to this volume, David Teacher (2018a, b) focuses on four Hayek-related operatives: the Habsburg Pretender, Strauss, Crozier and Robert Moss, Thatcher’s speech writer, and author of the pro-coup Chile’s Marxist Experiment (1973). Pinochet’s Junta purchased 10,000 copies of Chile’s Marxist Experiment for free distribution among Western ‘opinion makers.’ For posthumous purposes, Hayek acknowledged the Austrian origins of Nazism (Cubitt 2006, 17, 51). And according to Chamberlain (1982a, 90), Willi Schlamm was ‘keenly aware of the meaning of Hitlerism long before the Nazis took over in Germany and forced the Anschluss with Austria. After all, Hitler, too, had come out of Vienna, and had soaked up the peculiarly virulent anti-Semitism of the Hapsburg [sic] capital.’ Schlamm was a Senior Editor at Buckley’s National Review before becoming Associate Editor of the John Birch Society journal, American Opinion (Bjerre-Poulsen 2002, 35, 205, n. 64). But the prospectus for the proposed tax-exempt 1996 MPS general meeting described Vienna as the city of ‘Hayek, Popper, Mozart and Mises, of Freud, Klimt, Beethoven and Wittgenstein, of Hundertwasser, Schiele and Schubert, just to mention a few … The splendour of Vienna is legendary.’ The Austrian President (1986–1992), Kurt Waldheim, had a murky Nazi past; but his successor, Thomas Klestil (1992–2004), would provide a ‘Free of Charge’ reception for MPS members; as would the Mayor of Vienna. The opening and/or closing MPS banquet would be held in the Imperial Castle of Schoenbrunn, the Habsburg’s ‘monumental summer residence.’ A ‘special’ tour of ‘Imperial Vienna’—the ‘splendour capital of the Holy Roman Empire’—would include a visit to the ‘Kaisergruft,’ the tomb of both the Habsburg and the Leube families37; an ‘all day trip along the mythical River Danube’ would take in the ‘thousand year old monastery of Melk (it became famous recently, again, through Umberto Eco’s The Name of the Rose )’; and an ‘old paddle steamer’ would take the

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MPS tourists to the village of Duernstein where Richard the Lionheart was imprisoned in 1190 after his return from the Crusades.’ The MPS meeting would be hosted by the International Institute of Austrian Economics; and Feulner would have a private meeting with the Austrian President, plus a ‘private dinner at the home of a former president of one of the biggest banks in Austria.’38 In 1988, among those ‘clamouring to get in’ to the MPS was ‘Dr. Gail Frey (Guest of Dr. Kurt Leube),’ ‘Head of Department,’ CSU Hayward.39 Friedman ‘entered the Washington political scene through association with the American Enterprise Institute’ (Friedman and Friedman 1998, 344). Before a sympathetic AEI audience, Hayek (9 April 1975) nuanced aspects of his promotion of the deflation that facilitated Hitler’s rise to power and which led to the liquidation of Rose Friedman’s family (Friedman and Friedman 1998, 3). Mises’ (1985 [1927]) defined and praised ‘Fascists’—and Pinochet fitted that description. Friedman (21 April 1975) advised Pinochet to adopt an eight-point plan to tackle Chile’s ‘twofold’ problem: ‘inflation and the promotion of a healthy market economy.’ Pinochet (16 May 1975) replied: ‘Distinguished Mr. Friedman, I am pleased to acknowledge receipt of your courteous letter in which you gave me the opinion you formed about the situation and economic policy of Chile after your visit.’ Friedman’s proposal corresponded with his own ‘National Recovery Plan.’ Pinochet concluded: ‘Along with reiterating my gratitude for your personal contribution to an analysis of the economic situation of my country, I am also taking this occasion to express my highest and most respectful regard for you’ (cited by Friedman and Friedman 1998, 591–594). Friedman’s 1976 Nobel Prize in Economic Sciences stirred an international debate about his involvement with the Chilean Junta—which Pinochet must have followed closely (Ravelli and Bull 2018). Obsessed with his international image, in September 1976 Pinochet (or one of his ‘free’ market associates) launched a terrorist attack on Washington to silence a critic, Orlando Letelier—which Reagan told Crozier he approved of (Leeson 2018a). Hayek arrived in Chile in November 1977, fourteen months after the Junta’s terrorist attack on the United States. According to Caldwell and Montes (2014a, 21, 52; 2014b; 2015a, 279, 305), when the recipient

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of the 1974 Nobel Prize in Economic Sciences arrived, Pinochet would ‘barely’ have known who his official visitor was: ‘We have presented ­evidence that Hayek’s ideas were little known in Chile in the 1970s. As such, it is very unlikely [emphasis added] that they played a role in the creation of the 1980 Chilean Constitution.’ After Hayek left Chile, Carlos Cáceres (28 April 1978) told him: ‘In [sic ] several occasions, the President of the Republic as well as the members of the economic committee, have made public statements acknowledging your comments about the Chilean economy’ (cited by Caldwell and Montes 2014a, 23, n. 71; 2014b; 2015a, 280, n. 71). Hayek’s (1944, 1960) Road to Serfdom and Constitution of Liberty were Crozier’s (1979, 22) authoritative sources in The Minimum State: Beyond Party Politics; and the following year, Crozier (1993, 157) spent ‘several days closeted with the dictator’ for whom ‘I had drafted in Spanish fifteen clauses’ for his ‘Constitution of Liberty’: ‘fourteen of them were in the final document.’ Hayek (2 August 1977) informed readers of The Times that his authoritative voice was partly derived from that fact that ‘I have lived since before the [labour] trade unions were granted special legal privileges.’40 (Hayek was seven when the 1906 Trade Disputes Act became law.) Hayek’s (21 July 1977) authority for his letter to The Times on ‘Trade Union Immunity Under the Law’ was ‘Mr Robert Moss’ who, he declared, was probably right when in his recent book he writes that ‘the Liberals who blithely passed a Bill drawn up by the first generation of Labour MPs in keeping of an electoral promise quite literally had no idea what they were doing.’41

In The Freeman, Earl P. Holt III (1982, 209) described Moss as an ‘internationally-respected journalist’ who reported that in Britain, ‘public opinion polls since 1958 revealed that have consistently indicated majority support for even such harsh measures as banning all [Holt’s emphasis] strikes.’ Moss’ (1975) The Collapse of Democracy was one of Hayek’s (1979, 177, 184) authoritative sources in Law, Legislation and Liberty: The Political Order of a Free People—a section of which

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(‘Model Constitution’) Hayek suggested to Pinochet should be used to construct his Junta’s ‘Constitution of Liberty.’ Two-thirds of a century after his family’s Empire collapsed and the use of his titles became a criminal offense, ‘Archduke von’ Habsburg (1986, vii–viii) smelt counter-revolution: ‘people read Somary … his memory is coming back to life.’ He was referring to Felix Somary (1881–1956), ‘one of Switzerland’s leading bankers and certainly his time’s outstanding expert on economic crises … His roots were in the old Austro-Hungarian Empire with its great supranational tradition and its remarkable Vienna school of economics … His memoirs are marked by his great modesty … We all too often lack the universal person … Let us hope that those responsible for our fate [emphasis added] will follow the path which he traces for us.’ Much Cold War ‘knowledge’ was constructed for ideological purposes—some of it was transparent fraud (Leeson 2015b). According to Salerno (1996), ‘the truth’ sometimes ‘requires sacrifice. Menger sac­ rificed, as did Mises, and Rothbard, and many other seekers of truth in political economy.’ Two Cold War frauds—Mises and Hayek—­ rectified ‘knowledge’ about the reason for Menger’s withdrawal from both the Austrian School and academia. Reisman (2002, 26) ‘once heard’ Mises ‘compare Böhm-Bawerk to the Sphinx, who never slept and saw everything.’ According to Mises (2003 [1969], 17), ‘Menger, Böhm-Bawerk and Wieser looked with the utmost pessimism upon the political future of the Austrian Empire.’ Mises projected his own depressive tendencies onto ‘all sharp-sighted Austrians.’ Troy was both a factual and a legendary city. Mises compared Menger—and, implicitly, himself—to King Priam and the fall of Troy: ‘Menger barely had the first half of his life behind him when he recognized the inevitability of the demise of his own Troy. This same pessimism consumed all sharpsighted Austrians. The tragic privilege attached to being Austrian was the opportunity it afforded to recognize fate [emphasis added].’ Hayek insisted that Menger was working on ‘wider and wider’ material but was defeated by old age (Leeson 2015c, Chapter 3). The Hayek Archives tell a different story: according to Hayek, Menger, in his early sixties, fathered an illegitimate son, Karl Menger (1902–1985).42 According to Eugen Maria Schulak and Herbert Unterkofler (2011, 32),

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the mother was a journalist, Hermine Andermann (1869–1924), who was twenty-nine years his junior; and according to J. Herbert Fürth, Karl’s mother was Menger’s Jewish housekeeper. Menger got his son legitimized by Imperial decree—but Karl never forgave his father for not marrying his mother.43 According to Schulak and Unterkofler (2011, 32), fathering an illegitimate child violated Viennese social conventions: in 1903, Carl was forced into early retirement and withdrawal from public life. Austrian School economists maintained the ‘esprit de corps ’ posture that he had taken voluntary retirement for the sake of further studies: a ‘true Viennese secret’—which everyone in Vienna knew but did not talk about in public.

‘Free’ market knowledge appears to have been constructed and disseminated for propaganda and fund-raising purposes. Henry Simons’ apparent suicide was known about but not openly acknowledged (Friedman and Friedman 1998, 155; Van Horn 2014). According to the American Economic Review (1950, 585), the foundation MPS member, F.D. Graham, died ‘from a fall’ after a football game; but according to Hayek (3 September 1977), he had fallen into depression and killed himself.44 Hayek (1994, 130–131) was open about his own suicidal depressions—which Caldwell and Montes (2015b, 87) rectified (Chapter 2, above). And Hayek’s for-posthumous-­ consumption oral history interviews have also been rectified—through ­suppression (Leeson 2015a, Chapter 2). Robert Chitester encouraged Hayek to penetrate beneath the veil of the ‘free’ market religion that he had constructed: That’s fascinating because one of the things that has occurred to me—it’s an irritant, a frustration—because of my own personal desires to com­ municate certain precepts, is that the sense that motivates the ‘religious’ person is something that is very powerful. In a way, if one could find a way to use that motivation as a basis of support and understanding for, say, the precepts of a liberal free society, it could be extremely effective.

Hayek (1978a) side-stepped the question: ‘In spite of these strong views I have, I’ve never publicly argued against religion because I agree

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that probably most people need it. It’s probably the only way in which certain things, certain traditions, can be maintained which are e­ ssential.’ Chitester tempted Hayek with a rephrase: ‘Do you get questions about religion? I would assume a lot of people confuse your interest in a ­moral structure with religion.’ Hayek replied by referring to the thirtyfive-year-old Shenoy: Very rarely. It so happens that an Indian girl, who is trying to write a biography of myself, finally and very hesitantly came up with the question which was put to Faust: ‘How do you hold it with religion?’ [laughter] But that was rather an exceptional occasion. Generally people do not ask. I suppose you understand I practically never talk about it. I hate offending people on things which are very dear to them and which doesn’t do any harm.

Chitester pushed further: ‘Doesn’t your thinking in terms of a moral structure—the concept of just conduct—at least get at some very fundamental part of religious precepts?’ Hayek then described the religious structure of his ‘knowledge’: ‘Yes, I think it goes to the question which people try to answer by religion: that there are in the surrounding world a great many orderly phenomena which we cannot understand and which we have to accept. In a way, I’ve recently discovered that the polytheistic religions of Buddhism appeal rather more to me than the monotheistic religions of the West. If they confine themselves, as some Buddhists do, to a profound respect for the existence of other orderly structures in the world, which they admit they cannot fully understand and interpret, I think it’s an admirable attitude.’45 After years if not decades of psychiatric supervision plus, presumably, drug-based ‘treatment,’ Hayek reflected: ‘it seems that it was through psychiatry that I somehow got to the problems of political order.’46 On 7 June 1968, he delivered what he described as ‘some half-baked ideas’ on ‘The Primacy of the Abstract’ to the Alpbach Symposium. In what appears to be a justification for deference to the spontaneous order, Hayek (1978b [1969], 35, 37, 45, 49) sought to overcome the ‘barrier built up into the language which we have to employ’ so as to ‘have a liberating effect on one’s thinking.’ Psychology and ‘the theory of knowledge’ had frequently started at ‘the wrong end.’ He asserted that we

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are ‘tempted’ to describe as ‘hierarchies’ the ‘stratification or layering of the structures involved’; as an alternative he promoted ‘bisociation’ and ‘intuitive knowledge’—which rather than being described as ‘sub-­ conscious’ should really be described as ‘super-conscious,’ because they ‘govern the conscious process without appearing in them.’ According to a Professor of Philosophy (who insists on ­anonymity to avoid recriminations from what he calls the ‘Popper Church’), Bartley gave a ‘plenary session’ lecture at an Alpbach European Forum in Austria (which Hayek may have attended) which was full of Californian ‘New Age’ rubbish about how hallucinogens can break down the ‘bicameral mind’ and put you in touch with your ‘true self.’ (see also Theroux 2015)

After Goldwater’s defeat, Mises (1993 [1964], 36) saluted Hazlitt while bemoaning: ‘Every friend of freedom may today, in this post-election month, be rather pessimistic about the future. But let us not forget that there is rising a new generation of defenders of freedom. There is a real resurrection of the idea of liberty on the campuses. There is a steadily growing organization, Young Americans For Freedom, on the advisory board of which we both, you and I, and some of our friends present in this room are serving. Let us hope that these young men will succeed where we in our generation failed.’ After 1974, one-handed economists colonized several university departments and military academies; and after 2010, the ‘free’ market began to create only one-handed politicians. According to its Executive Director, Young Americans for Freedom played a pivotal role in founding Citizens United (Thorburn 2010, 489–498). In 2010, the Supreme Court ruled 5-4 in favour of deregulating campaign spending by organizations (Citizens United v. Federal Election Commission). In 1962, Young Americans for Freedom planned to present awards to Mises, Hoover, Evans, Thurmond, Richard Weaver, John Wayne, Roger Milliken and General Edwin A. Walker (who the previous year had been dismissed as commander of the 24th infantry division in Germany for spreading right-wing propaganda to his troops). To avoid being associated with Walker, Hoover declined the award and Goldwater refused to attend the ceremony (Bjerre-Poulsen 2002, 175).

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In April 1969, the middle-aged Rothbard joined Young Americans for Freedom on the California State College at Long Beach campus in what became, for some, a ‘drug-fuelled anarchist frenzy’ (McVicar 2017). It is ‘widely whispered in the libertarian community’ that FEE’s founder, Read ‘joined his friends,’ Mullendore (President, Southern California Edison Company), Ingebretson (Spiritual Mobilization), and Ashby (Assistant Editor of Faith and Freedom ) in ‘acid explorations’ (Doherty 2007, 279–280; Rothbard 2007, Chapter 11; North 1971; McVicar 2017). Like Read, Ingebretson was a MPS member47; and in California, Mullendore had been Herbert Hoover’s Executive Secretary (Blundell 1990). Spiritual Mobilization had been established by James Fifield in 1940; Mises ‘enthusiastically’ welcomed its monthly publication, Faith and Freedom (Hülsmann 2007, 855); and Rothbard contributed 13 articles (1950–1956), in addition to a monthly column, under the p ­ seudonym ‘Aubrey Herbert’—an example of his ‘tactical willingness to make allies in the cause of liberty wherever he could find them’ (Casey 2013, 7). Rothbard (2010, 25–35) also composed articles for himself (‘To: Aubrey Herbert’): ‘Are Libertarians “Anarchists”?’ and ‘In Defence of Demagogues.’ When Chitester asked about the ‘intellectual who is working theoretically and the one who essentially sells himself to the political process,’ Hayek (1978a) outlined his ‘principle’: Well, of course, there is a limit. You see, I’m very interested in politics; in fact, in a way I take part. I now am very much engaged in strengthening Mrs. Thatcher’s back in her fight against the unions. But I would refuse to take any sort of political position or political responsibility. I write articles; I’ve even achieved recently the dignity of an article on the lead page of the London Times on that particular subject. I’m represented in England as the inspirer of Mrs. Thatcher, whom I’ve only met twice in my life on social occasions. I enjoy this, but on the principle that I will not ask, under any circumstances [emphases added], what is politically possible now. I concentrate on what I think is right and should be done if you can convince the public. If you can’t, well it’s so much the worse, but that’s not my affair.48

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But Hayek was a party political operative who advised Thatcher which ‘wet’ cabinet members to sack (Leeson 2017). In his Memoirs, Mises (2009/1978 [1940], 40–41) described his ‘principles’: The economist must deal with doctrines, and not with men. It is for him to critique errant doctrine; it is not his charge to uncover the personal motives behind heterodoxy. The economist must face his opponents under the fictitious assumption that they are guided by objective considerations alone. It is irrelevant whether the advocate of a false notion acts in good or bad faith; what matters is if the stated notion is true or false. [emphases added]

It was up to ‘others to reveal corruption’ and ‘enlighten the public’: ‘I have held fast to these principles throughout my life.’ Mises had ‘known much, if not all, about the corruption of the interventionists and socialists’ with whom he had dealt but had ‘never’ made use of this information. Although he had been supplied with ‘ample material on the corrupt practices of these socialist leaders’ and was ‘well schooled in the moral decadence of the party,’ he had ‘graciously declined offers to prove fraud and embezzlement on the part of my opponents, admissible in courts of law.’ Hülsmann (2007, 433, n. 40) unintentionally revealed that Mises’ ‘principles’ were self-promotional: ‘corruption’ plagued the ‘disastrous’ implementation of anti-trust policies (Mittelstandspolitik )—and so Mises ‘obtained information’ from Hofrat Pösendeiner, the civil servant responsible for implementing industrial policy and sought to ‘persuade’ him to publicize his experiences. Through his repeated use of the fallacy of argumentum ad hominem, Mises (1951 [1932], 87, 104, n. 1) revealed that—by his own professed standards—he was not an economist: Waking and dreaming man’s wishes turn upon sex. Those who sought to reform society could not have overlooked it. This was the more to be expected since many of them were themselves neurotics suffering from an unhappy development of the sexual instinct. Fourier, for example,

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suffered from a grave psychosis. The sickness of a man whose sexual life is in the greatest disorder is evident in every line of his writings; it is a pity that nobody has undertaken to examine his life history by the psycho-analytical method. That the crazy absurdities of his books should have been circulated so widely and won the highest commendation is due entirely to the fact that they describe with morbid fantasy the erotic pleasures awaiting humanity in the paradise of the ‘phalanstère.’

Outrage unites ‘free’ market ‘scholars’: those who knew Rothbard can still fondly recall his indignant squeal of ‘Monstrous!,’ a c­ haracteristic response to the latest outrage, often a deviation from the Rothbardian ideological line du jour. (Steele 2000)

Like Hayek, Mises sought not to ‘reform’ society but to reconstruct a neo-feudal version of it. Pornography, however—like its kissing-cousin arousal, outrage—may not be the socially optimal prism through which to promote or examine public policy. Five years before his proposed Pact with ‘Fascists,’ Mises (1922, 410; 1932, 389; 1951 [1932], 416, 420) complained: The only reason why Jesus does not declare war against the rich and preach revenge on them is that God has said: ‘Revenge is mine’ …

As the Nazis were closing in on power, in his Preface to the second German edition of Sozialismus, Mises (1951 [January 1932], 17, 24) complained: ‘The incompatible success of Marxism is due to the prospect it offers of fulfilling those dream-aspirations and dreams of vengeance which have been so deeply embedded in human soul from time immemorial. It promises a Paradise on earth, a land of Hearts’ Desire full of happiness and enjoyment, and—sweeter still to the loser’s in life’s game—humiliation of all who are stronger and better than the multitude [emphases added].’ By the time Greenspan (2008, 52) joined Nixon’s 1968 Presidential campaign, he had ‘long since decided to engage in efforts to advance free-market capitalism as an insider, rather than as a critical

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pamphleteer.’ He and Rand ‘remained close until she died in 1982, and I’m grateful for the influence she had on my life.’ According to Yaron Brook, President of the Ayn Rand Institute and MPS member, Rand understood that ‘somebody’s need is a claim against our wealth.’ The last fifty years have been an ‘orgy of placing need above wealth creation, above personal pursuit of happiness. I think we are seeing the consequences of that today.’ Brook is ‘struggling to change a popular perception’ that the Global Financial Crisis was ‘caused by deregulation and the fiscal policies of a top Rand disciple: Alan Greenspan, the former Federal Reserve chairman.’ According to Brook, the problem wasn’t deregulation, but ‘misregulation.’ It was ‘unfortunate’ that Greenspan ‘continues’ to be associated with Rand (Martin 2009). For the eight years of the Nixon-Ford White House, the Chair of the Council of Economic Advisers (CEA) were MPS members: Paul McCracken (1969–1971), Herbert Stein (1972–1974) and Greenspan (1974–1977); and another MPS member, William Fellner, served on the CEA (1973–1975). Three MPS members or fellow travellers were Chairs of Reagan’s CEA Chairs: Murray Weidenbaum (1981–1982), Martin Feldstein (1982–1984)49 and Beryl Sprinkel (1985–1988); three CEA members were also MPS members: Jerry Jordan (1981–1982), William Niskanen (1981–1984) and Thomas Gale Moore (1985–1988). Jordan became President of the Cleveland Fed (1992–2003); and another MPS member, Homer Jones, became Research Director and then Senior Vice President of the St. Louis Fed. The St. Louis Fed sponsors the annual Homer Jones Memorial Lecture Series whose speakers have included R. Glenn Hubbard (2013), a former CEA Chair, and Alan Blinder (2010), former Vice-Chair of the Greenspan’s Fed. Like Burns in 1969,50 Greenspan ‘resigned’ from the MPS ‘to join the Fed’ (he hadn’t paid dues since 1986 and his name was removed in 1989).51 Greenspan (2008, 52) became CEA Chair on 4 September 1974, one month before the announcement of Hayek’s Nobel Prize: ‘It did not go without notice that Ayn Rand stood beside me as I took the oath of office took the oath of office in the presence of President Ford in the Oval Office.’ Her philosophy posthumously influenced the White

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House (via President Trump 2017–). According to her fictional hero, John Galt, the best thing bureaucrats could do is ‘get the hell out of my way’—Trump told USA Today that Rand’s Fountainhead ‘relates to business (and) beauty (and) life and inner emotions. That book relates to … everything.’ He specifically identified with the novel’s ‘hero,’ Howard Roark, who designed skyscrapers and raged against the establishment (Powers 2016). According to Ray Dalio, the founder of Bridgewater Associates (the world’s largest hedge fund), the Trump ‘administration hates weak, unproductive, socialist people and policies, and it admires strong, can-do, profit makers. It wants to, and probably will, shift the environment from one that makes profit makers villains with limited power to one that makes them heroes with significant power.’ The ‘shift from’ Barack Obama’s administration to Trump’s will ‘probably be even more significant than the 1979–1982 shift from the socialists to the capitalists’ in the UK, US and Germany, when Thatcher, Reagan and Helmut Kohl ‘came to power’ (cited by Levy 2016). Rand (1964) told Playboy that the dollar is the ‘symbol … of free trade and, therefore, of a free mind. A free mind and a free economy are corollaries. One can’t exist without the other. The dollar sign, as the symbol of the currency of a free country, is the symbol of the free mind.’ What does the ‘free mind’ and the ‘free economy’ look like? According to Charles Koch the ‘key to business success … lies in reliance on initiative from below rather than on rigid control from the top. Yet at Cato all important decisions were made only in consultation with Koch: Crane was constantly on the telephone to him in Wichita’ (Gordon 2013). The Rand devotee, Travis Kalanick, was obliged to resign from Uber because under his leadership the company had ‘fostered’ a workplace culture that tolerated sexual harassment and discrimination, ignored legal constraints, stole intellectual property from Google’s self-­ driving car, and used technology to evade law enforcement. The hedge fund manager, Edward S. Lampert, who reportedly applied Rand’s Objectivist principles, succeeded in driving Sears and Kmart ‘close to bankruptcy.’ As chief executive of CKE Restaurants (whose private equity owner, Roark Capital Group, is named after the architect-hero

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of Rand’s Fountainhead ), Andrew Puzder was obliged to ­ withdraw his nomination as Trump’s Secretary of Labor after allegations that his companies used sexist advertising and mistreated employees (Stewart 2017). According to the CEO of the Cato Institute, Rand’s Atlas Shrugged is ‘extraordinarily relevant to today’s cultural environment and, although a novel, is the best book ever written on political economy’ (Allison 2015, 173). In private celebration of Atlas Shrugged, ‘von’ Mises (2007 [1958], 11) told Rand: ‘You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you.’ Mises also applied a one-handed version of Walrasian competitive equilibrium to the labour market: ‘If the policies of nonintervention prevailed—free trade, freely fluctuating wage rates, no form of social insurance, etc.—there would be no acute unemployment. Private charity would suffice to prevent the absolute destitution of restricted hard core of unemployables’ (cited by Peterson 2009, 9). This conclusion was derived not from economic analysis but from a common Austrian School prejudice: ‘it remains undeniably true that the welfare state has done only harm to society, it violates rights, and hence it ought to be abolished’ (Block 2014). Tibor Machan wrote an MPS paper on ‘The Morality of the Market Process.’52 In the 1950s, Charles Keating founded the Catholic-based Citizens for Decent Literature; and (like Hayek and Roche III), became known as a ‘stern moralist’—in 1969, Nixon appointed him to serve on the President’s Commission on Obscenity and Pornography (McFadden 2014). In ‘Red Light States: Who Buys Online Adult Entertainment?’ Benjamin Edelman (2009, Table 2, 217, 219) found that there is a positive relationship between pornography consumption and the proportion of the population of a State that agrees with statements such as Even today miracles are performed by the power of God. I never doubt the existence of God. Prayer is an important part of my daily life. I have old-fashioned values about family and marriage. AIDS might be God’s punishment for immoral sexual behaviour.

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The faithful have a ‘come to Jesus moment’: their consumption of pornography falls on Sunday before rising again on Monday. With respect to European children, ‘Deacon’ McCormick (1980, 101; 1965, 127, 130, 158, 159, 162–163), was disgusted by ‘aged men with jaded and warped sexual appetites’ and referred to the ‘desperate need for protection of children from the deplorable exploitation by white slavers’ (the ‘evil … white slave trade among children … traffic in human souls … one of the worst blemishes on the social life of the times’). But he passed no judgement on sexual encounters with underage non-white girls in the colonies. ‘Deacon’ McCormick (1956, 115–116, 144–145) described watching a performing Arab girl—‘she couldn’t be more than thirteen’—and discussed having sex with her. One of his companions stated: ‘she is not too young. But naked she would be a disappointment. Too much bone. And that would ruin everything.’ As an illustration, a semi-naked photograph of ‘A child dancer’ was provided. In 1939 ‘the rape of Czechoslovakia’ energized ‘Deacon’ McCormick (1956, 15, 231): ‘Either you allow yourself to be caught up in the slipstream of events and become a useful if unimportant cog in those events, or you slip back into meaningless oblivion. I prefer to be a cog.’ ‘Deacon’ McCormick then recounted his befriending of a middle-aged Frenchman who had ‘rescued’ a twelve year old servant girl from a brothel: ‘he made no attempt at love-making although he was unable to sleep for thinking about her.’ He then ‘married’ her two years later. ‘Deacon’ McCormick’s wife, Sylvia, found the child-bride to be a ‘lovely doll. She is docile, affectionate, still a child.’ In Egalitarianism as a Revolt Against Nature, Rothbard (2000 [1970], 169) insisted that ‘at the hard inner core of the Women’s Liberation Movement lies a bitter, extremely neurotic if not psychotic, man-­ hating lesbianism. The quintessence of the New Feminism is revealed.’53 Rothbard (2011 [1971], 911)—who motivated Austrian economists by orchestrating them to chant: ‘We want externalities!’ (Blundell 2014, 100, n. 7)—explained why they must oppose Pigouvian externality analysis: ‘whether Women’s Libbers like it or not, many men obtain a great deal of enjoyment from watching girls in mini-skirts; yet, these men are not paying for this enjoyment. Here is another neighbourhood

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effect remaining uncorrected! Shouldn’t the men of this country be taxed in order to subsidize girls to wear mini-skirts?’ Rothbard’s (1994) ‘hero’ of Italian ‘liberty,’ the boss of Lega Nord per l’Indipendenza della Padania (North League for the Independence of Padania, or Northern League), Umberto Bossi, would rouse crowds to a frenzy by telling them that the League ‘has a hard-on.’ (cited by Hooper 2012)

On the road to ‘The Rediscovery of Hayek’s Masterpieces,’ Toby Baxendale ‘used to go to Chelsea and sit in amazement on the Kings Road in the summer looking at all those fantastically beautiful girls/ women walking up and down with very little left to the imagination. I managed to talk my way into a private-members’ nightclub on the Kings Road called the 151 Club where a lot of these fabulously rich and good looking girls went. I got talking to the owner who said he was looking to sell it. In that instant, I knew I had to buy it!’54 At the IEA, Blundell (2008) reported that Shenoy was regarded as the original pin-up model of the ‘Austrian’ school of thought in economics,

who had been ‘elected’ to the MPS ‘aged just under 30 … A great talking point at that 1972 meeting was a recent Hobart Paperback publication A Tiger by the Tail—The Keynesian Legacy of Inflation by F. A. Hayek but compiled and introduced by Sudha. This publication had great influence in intellectual and scholarly circles at the time and proved to be very timely and very useful.’55 Hayek is remembered for making smutty and sexually charged remarks about other people’s wives (Leeson 2015a, Chapter 3); Boettke (2014), who tells his GMU students that ‘A supply and demand graph is the sexiest thing in the world’ (cited by Martin 2010, 130), supplies them (and others) with an ‘underpants’ video accompanied by a discussion of varieties of ‘masturbation’; Rizzo told Boettke: ‘I love the underpants link’56; and Rothbard’s (1994, 6, 9) ‘star politician’ of the Italian ‘neo-fascist’ National Alliance (NA) was the

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beauteous Alessandra Mussolini, granddaughter of Il Duce. Alessandra, niece of the illustrious Sophia Loren and who is a younger version of her aunt, is the paleo’s kind of ‘feminist,’ and just about the best thing in the N.A.

According to Rothbard (1994, 6–7), Irene Pivetti—who is ‘magnificent, the Paleos’ kind of female leader’—had been charged with ‘anti-­ Semitism’ because of a ‘spurious piece of evidence’: her ‘praise’ of Mussolini’s ‘policy on women,’ that is ‘his anti-feminism, and his belief that women’s place was as mothers in the home.’ Rothbard quoted Pivetti: while she was not pro-fascist, she could ‘see all the good things fascism did for Italy … Mussolini had the most advanced policy towards women,’ that is, anti-feminism.

Until age 53, Mises lived with his mother whom Margit Mises (1984, 23–25) never met, and heard little or nothing about from her son. However, he ‘never’ had a ‘word’ of criticism about her. Margit soon realized that Mises’ ‘silence was the result of a long and bitter struggle with himself.’ Mises must have ‘suffered in his youth,’ though he ‘never complained.’ Margit heard about Mises’ mother from others who told her that she was a highly intelligent woman with the ‘attitude of a general and a will of iron, showing little warmth or affection for anyone’ (except, perhaps, Richard Mises, her second son). Mises (1951 [1932], 87, 104, n. 1, 100–101) reflected: ‘To examine how far the radical demands of Feminism were created by men and women whose sexual character was not normally developed would go beyond the limits set to these expositions.’ However, the ‘radical wing of Feminism … overlooks the fact that the expansion of woman’s powers and abilities is inhibited not by marriage, nor by being bound to a man, children and household, but by the more absorbing form in which the sexual function affects the female body … the fact remains that when she becomes a mother, with or without marriage, she is prevented from leading her life as freely and independently as man. Extraordinarily gifted women may achieve fine things in spite of motherhood; but because the functions of sex have first claim upon woman, genius and the greatest achievements have been denied her.’

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Herman Finer (1945, 210) detected a ‘thoroughly Hitlerian c­ ontempt for the democratic man’ in Hayek’s (1944) Road to Serfdom; and in Sozialismus, Mises (1951 [1932], 98) expressed similar contempt: ‘Dully and apathetically,’ the ‘great mass of men … succumb to everyday life; they never think beyond the moment, but become slaves of habit and the passions.’ Read (1965) praised the ‘creative energies’ of the elite that allowed mankind to advance beyond Cro-Magnon status … These creative energies are everlastingly leaking through the porosity of destructive customs, taboos, edicts, laws. Manifestation is their destiny, and their power to escape constriction resembles lightning as it picks its way along lines of least resistance. Block it here and it goes there. ‘Thy will be done!’

Read (2011 [1973]) described a 1941 dinner party with Mises and at least a dozen of the best thinkers of our [emphasis added] philosophy in Southern California — such men as Dr. Benjamin Anderson, Dr. Thomas Nixon Carver, the business genius Bill Mullendore, and the like. We listened to Ludwig von Mises until midnight, and then a question was posed. ‘Professor Mises, we will all agree with you that we are in for parlous times. But suppose you were the dictator of these United States and could effect any changes that you think appropriate. What would you do?’ And quick as a flash came the answer: ‘I would abdicate.’

The United States has the world’s highest prison population rate (716 per 100,000); almost half of the world’s prison population (10.2 ­million) are in the US (2.24m), Russia (0.68m) or China (1.64m sentenced prisoners).57 In The Chickenshit Club: The Justice Department and Its Failure to Prosecute White-Collar Criminals, Jesse Eisinger (2017) highlighted an anomaly. Are there hints of the remnants of eugenics in this disparity? The term ‘Welfare Queen’ was first coined in 1974 (possibly by George Bliss of The Chicago Tribune ). In 1976, the phrase became part of Reagan’s effort to win the Republican Party’s nomination—it demonstrated what he thought was ‘wrong with welfare, Big Government and the United States’ (New York Times 1976).

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Two years after Hitler seized power, Carver sought solutions for the ‘palpably unfit’: Another is to segregate or sterilize the congenital defectives. This is one of the few rational things which have come out of Hitlerism. Another may be that Hitler is preparing his people to stand at Armageddon as the first line of defense against the inevitable Bolshevik invasion.

The Holocaust discredited eugenics—but not for Carver, who stated in 1945: It is sensible and humane to avoid bringing into the world ­congenital defectives and to discourage them from inflicting the curse of a burdensome life upon future generations of their own kind. In one respect, Hitler was more rational than most contemporary government ‘planners.’ He agreed with them that government should guarantee jobs or a livelihood to everyone. However, he saw, as they did not, that in order to make good on this guarantee, government must take over the corresponding responsibility for parenthood and decide who might or might not be born. His policy of sterilizing defectives is a logical part of a governmental policy of social security and ‘planned’ economy. (cited by Fiorito 2017)

Carver (1949, 241) reported that through the ‘influence of Messrs. Mullendore, Read, Watts and myself,’ the Los Angeles Chamber of Commerce became the ‘spearhead of an active crusade for the return to the principle of freedom of enterprise. That enterprise seems to have made an impression, since nearly everyone now (1947) talks in favour of free enterprise and against the police state. If I had something to do with starting Mullendore, Read and Watts on this crusade, it may turn out to be the most important work of my life.’ Hayek (1978a) described his cousin, Ludwig Wittgenstein, as ‘crazy young man,’58 his early mentor, Othmar Spann, as ‘semi-crazy,’59 and his donor, Harold Luhnow (William Volker’s nephew), as ‘completely crazy in the end’ (cited by Caldwell 2011, 306, n. 7). The evidence suggests that Hayek was more than ‘semi-crazy.’ Generally, those who suffer from mental illness now tend to be treated more sympathetically than previously (when the ‘sub-human’ label had frequently been

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attached). In the ‘Aryan’-obsessed Nazi regime that Hayek’s Austrian family supported, the mentally ill were amongst the first victims of the ‘purification’ Holocaust: Aloisia, one of Hitler’s cousins on his father’s (Schicklgruber) side, ‘told doctors she was haunted by ghosts and the presence of a skull.’ In 1940, she was murdered ‘in a room pumped full of carbon monoxide’ in the Vienna institution where she had ‘spent most of her time chained to an iron bed’ (Connolly 2005). Hayek told Seldon that ‘potential hereditary implications’ had deterred him from marrying his cousin, Helene (Ebenstein 2003, 253). On 4 August 1926, Hayek married a secretary in the Abrechnungsamt, the civil service Office of Accounts in which he worked, Helen (‘Hella’) Berta Maria ‘von’ Fritsch, because she bore some ‘superficial’ resemblance to Helene.60 Using one of his dissembling words, Hayek (1978a) told Armen Alchian: ‘Well, it’s a curious story, I married on the rebound when the girl I had loved, a cousin, married somebody else. She is now my present wife. But for twenty-five years I was married to the girl whom I married on the rebound, who was a very good wife to me, but I wasn’t happy in that marriage. She refused to give me a divorce, and finally I enforced it. I’m sure that was wrong, and yet I have done it. It was just an inner need to do it.’61 Catholics are not generally allowed to divorce—to facilitate a divorce, Hayek (1899–1992), who was the same generation as Aloisia (1891–1940), may have attempted to have his first wife certified as insane: a pseudo-scientific graphological (handwriting) analysis by Dr. Erika Smekal-Hubert concluded that Hella was ‘deeply inhibited, was slightly psychopathic, quarrelsome and was likely to have sudden emotional outbursts. She was a wayward, autistic person, who should live alone and was neither a good wife nor a good mother. The one for Hayek was couched in the most agreeable, even enthusiastic terms’ (Cubitt 2006, 141). The MPS sought methods of ‘re-establishing the rule of law and of assuring its development in such manner that individuals and groups are not in a position to encroach upon the freedom of others and private rights are not allowed to become a basis of predatory power.’62 According to a Caldwell-chosen editor of The Collected Works of F.A. Hayek: ‘One of the themes in Hayek’s works on political philosophy

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is the importance of the Rule of Law that gives security and certainty to people in their person and property’ (Ebeling 2014a). To avoid the British Rule of Law, Hayek directed his lawyer to go jurisdiction shopping to facilitate the abandonment of his wife and children. Robbins (who drafted the 1947 MPS Statement of Aims) became enraged by the inadequacy of the financial arrangements of what he described as Hayek’s ‘bootleg divorce.’ In 1950, he severed contact with Hayek and the MPS—he worried about the prospect of ‘damage to causes with which Hayek had been associated’ (Cubitt 2006, 67, 64). Two LSE colleagues also resigned: Arnold Plant (along with Robbins)63; and Frank Paish (executor of Hayek’s first wife) in 1965.64 Having re-joined the MPS, Robbins was obliged to hear from Hunold (29 March 1963) that he too had previously regarded Hayek as the ‘incarnation of justice, correctness, good morals and manners’ until he and Machlup became his ‘top enemies.’65 Hunold (23 January 1960) told Leoni that Hayek’s statements were ‘untrue.’66 Hayek (1978a) reflected that in 1931, Robbins ‘was half-Austrian already. [laughter]’67 Robbins (2012 [1931]) repeated Hayek’s fraud that he had predicted the Great Depression—although ‘there is no textual evidence for Hayek predicting it as a concrete event in time and place’; we lack ‘convincing evidence of a prediction that conformed to what Robbins suggested in his foreword’ (Klausinger 2012, 172, n. 10; 2010, 227). This fraud led to Machlup’s (1974) recommendation that Hayek be awarded the 1974 Nobel Prize for Economic Sciences (Leeson 2018b). Machlup (1980) promoted deflation: ‘Hayek was absolutely right. An attempt to keep the price level stable with a rising population, rising labour force, and rising productivity, and consequently increasing quantities of goods implies that, to keep the price level from failing, you have to create additional money; in creating money, you create distortions.’ Hayek’s analysis of what brought on the depression was ‘correct … absolutely. I have always accepted it. The stable price level during the early twenties was the beginning of our downfall; this was a period of particularly fast growth of total output and, to keep price levels from falling, one had to create a good deal of money which was all fed into investment and this high rate of investment turned out to be unsustainable in the long run.’

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Robbins must have known that Hayek was a rectifier—shortly after repeating his fraud, Robbins appears to have been alerted to his error by Frank Knight and/or Jacob Viner. This presumably played a part in the refusal of the University of Chicago’s Economic Department to even consider hiring Hayek in 1950 (Leeson 2018b; Mitch 2015, 2016). According to Hayek (1995 [1966], 240), in 1930–1931, Robbins was ‘looking for allies.’ In winter 1931, Hayek gave four lectures at the LSE which became Prices and Production (1931, 1935). Robbins (1971, 127) recalled that Hayek’s lectures were a ‘sensation.’ According to Hayek (1994, 66–67, 78), Robbins ‘pounced … this is the thing we need to fight Keynes at the moment. So I was called in for this purpose.’ He ‘expected nothing less’ than a job offer from the LSE. Presumably because of devotional incapacity, Boeetke (1992) asserted that publication of Hayek’s (1929) Geldtheorie und Konjunkturtheorie (later translated as Monetary Theory and the Trade Cycle ) ‘prompted an invitation from Lionel Robbins for Hayek to lecture at the London School of Economics.’ And in Duke University’s History of Political Economy (HOPE ), the fifth official Hayek biographer repeated this false narrative: In the spring of 1931 Robbins invited Hayek to the LSE to give four ­lectures … one of the principal reasons that Hayek initially came to England from Austria was, as one commentator has put it, ‘to provide a counter-attraction to Keynes’ (J. Robinson 1978, 2). Lionel Robbins was the person behind the scenes in this matter. Robbins probably first began thinking of Hayek as a candidate for ‘counter-attraction’ when he read the German version of ‘The “Paradox of Savings,” published in 1929. In the late summer of 1930, Keynes invited Robbins to join the Committee of Economists … Robbins soon found himself disagreeing with the others, both about the origins of the downturn and about appropriate remedies … He also tried, unsuccessfully, to get the committee to hear evidence from economists whose views were closer to his own. Hayek was among the names he had submitted. Very soon thereafter came the invitation for Hayek to lecture at the LSE. (Caldwell 1998, 548, 550)

But Hayek (1935, Preface, vii) had earlier explained that Prices and Production ‘owes its existence to an invitation by the University of

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London to deliver during the session 1930–31 four lectures to advanced students in economics.’ In December 1930, Robbins proposed to Beveridge, the LSE Director, that Viner be offered the vacant LSE chair—but Viner declined. Beveridge invited Hayek to give the University of London Advanced Lectures in Economics (27–30 January 1931). Robbins and Hayek first corresponded after Hayek had accepted the invitation: they first met in January 1931. Beveridge then proposed that Hayek be offered the vacant chair; Robbins consulted with his fellow LSE Professor, T.E. Gregory, and a formal offer was sent on 27 April 1931 (Howson 2011, 7; 2001, 369). Referring to ‘the Hayek-Robbins line,’ Brinley Thomas (1991, 390) recalled that at the inter-war LSE, the ‘ruling powers were passionate believers in freedom, and this included freedom to adjust the constraints within which freedom was exercised by non-favourites. The main type of adjustment was the postponement of tenure. In my own case I did not receive tenure until, on the advice of Sir Alexander CarrSaunders [LSE Director, 1937–1957], I moved from monetary theory to migration and economic growth.’ Maurice Dobb reflected that the LSE economics department was ‘firmly regimented under the Robbins-Hayek banner’ where academics were ‘mouthing old platitudes about the blessings of a price mechanism and the beneficence of capitalist speculators’ (Shenk 2013, 130–131). According to Nadim Shehadi (1991, 385–387), Hayek and Robbins ‘tried to restrict the divulgence’ of non-Austrian ideas: ‘the LSE at the time was described as a court where the favourites were the ones who adhered to Neoclassical principles and the non-favourites were those who had affinities to Keynesian ideas. The former got promotion, the latter were weeded out gradually.’ Paul Einzig (1937, 204) reported that at the LSE, Robbins and his collaborators ‘set up a cult of the Austrian economist, Professor Ludwig von Mises, with his fanatic belief in cutting down prices, and especially wages, as a remedy for all evil [in the Great Depression].’ Hugh Dalton (1953, 115) concluded that Robbins, his LSE colleague, became an ‘addict of the Mises-Hayek anti-Socialist theme’: ‘variety’ tended to disappear, and the LSE began to teach a ‘more uniform brand of right

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wing economics.’ In 1932, Dalton wrote to a friend that the ‘RobbinsHayek tendency (and they have several echoes on the staff) is very ­retrograde’ (cited by Pimlott 1985, 215). Having flip-flopped on Hitler, Mises (1944, 87) declared that ‘European totalitarianism is an upshot of bureaucracy’s preeminence in the field of education. The universities paved the way for the dictators.’ After a visit to Nazi Germany in spring 1933, Dalton noted that ‘Geistige Gleichschaltung [intellectual coordination] is the Nazi ideal in education. There is something of this to in the economics department of the [London] school of economics’ (cited by Durbin 1985, 103). According to the MPS Statement of Aims: ‘It aligns itself with no particular party.’68 Yet of the 76 economic advisers on Reagan’s 1980 campaign staff, 22 were MPS members (Peterson 1996).69 The archives also reveal that Hayek proposed to choreograph an election stunt for Reagan—despite what he alleged was his ‘strict’ rule not to take part in current political activities of a country of which he was not a ­citizen (17 June 1979).70 Despite also his low opinion of Reagan’s intelligence (Cubitt 2006, 144). Hayek (7 June 1980) suggested to Glenn Campbell that during his next trip to Hoover he would like Reagan to be cross-­ examined before the press by the Hoover Institution economists ­including himself: this would have allow Reagan to show his confidence and to demonstrate that he was taken seriously by economists. Hayek sought a specific role in winning the 1980 election: he wanted to tell the media his ‘joke’ that since Reagan was twelve years his junior, he was clearly ‘good’ for an unconstitutional third term.71 At the 1959 MPS meeting, Hayek referred to ‘our’ representative on President Dwight Eisenhower’s CEA.72 The July 1959 Mont Pelerin Society Quarterly announced that Brandt (a foundation member) had been recruited to serve on the CEA. Thus all three CEA members were MPS members or affiliates: Brandt, Henry Wallich, and the Chair, Raymond J. Saulnier (15 June 1959) who told Hunold: ‘How I wish I could’ attend the 1959 MPS meeting.73 The July 1959 Mont Pelerin Society Quarterly reported that Eric Lundberg had been ‘elected’ to the MPS.74 Lundberg later served as a member (1969–1975), Chair (1975–1979) and associate member (1980–1987) of the Nobel Prize in Economic Sciences Selection

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Committee. Bertil Ohlin was—at his own request—invited to attend the 1960 MPS meeting75; and became the foundation Chair of the Nobel Prize Selection Committee (1969–1974). Both must have known about Hayek’s suicidal depression (1969–1974)—the Nobel Press release (9 October 1974) reads oddly about someone who had largely ceased to be an economist: ‘Since the Economics Prize was inaugurated [in 1969] the names of two economists, whose research has reached beyond pure economic science, have always been on the list of proposed prizewinners: Gunnar Myrdal and Friedrich von Hayek.’76 According to two insiders, members of the Selection Committee had an intense dislike of Myrdal and—to aggravate him—had paired Hayek with his award because Hayek had paired with Myrdal’s wife in the 1930s (Leeson 2013, Chapter 1). Friedman told Davenport’s research assistant that at the University of Chicago, Henry Simons (1899–1946) did not believe that he could ‘push’ onto the public ideas on which there was no expert agreement— he had a ‘humility’ that ‘others’ did not have; he was not sure that his ideas were ‘correct’ and therefore did not feel that the government should ‘enforce’ them.77 In contrast, Hayek (1992b [1977]) described the MPS achievement: a ‘consistent doctrine and some international circles of communication.’ Did the Icelandic Chamber of Commerce know what was best for commerce in Iceland when they commissioned Frederic Mishkin to write a report on ‘Financial Stability in Iceland’ just prior to the collapse of the country’s financial sector (Chapter 6, below)? Mises—a full-­time lobbyist for the Austrian Chamber of Commerce—apparently knew that Credit Anstalt would collapse—but did nothing about it (Chapter 9, below). Using a television-watching analogy, Boettke (2011) observed ‘the men who sit in the seat of Adam Smith and demand our attention’ are Buchanan, Mises and Hayek, ‘and they are to be juxtaposed to the mainstream of economics which is what is currently fashionable in science and politics. To miss that, is to misunderstand what is fleeting and what is enduring in the history of the disciplines of economics and political economy.’78 After both Mises and Hayek were safely dead, James Buchanan (1992, 130) felt emboldened to mention how MPS

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‘consistency’ was maintained: there was ‘too much deference accorded to Hayek, and especially to Ludwig von Mises who seemed to demand sycophancy.’ As is reported in ‘American Economists Pay Homage to the Greatness of Ludwig von Mises,’ Mises was made a ‘Distinguished Fellow’ of the American Economic Association under the AEA Presidency (1969) of the Habsburg-born MPS member, William Fellner.79 Fellner left Hungary in 1939 to join University of California at Berkeley; and in 1940, may have been instrumental in arranging for a job offer to be made to Mises. But according to Hülsmann (2007, 790), Mises was told upon arriving in the United States that the school had ‘no budget to hire him’; and shortly afterwards, Howard Ellis wrote from Berkeley wishing Mises ‘good luck. And that was it for Berkeley.’ Mises told Margit (1984, 64) that ‘He soon decided not to go to Berkeley.’ Mirroring the Communist International, the MPS perpetuates intergenerational sycophancy. In The Law of Power, ‘von’ Wieser (1983 [1926], 226) reflected on the consequences of the ‘Great’ War: When the dynastic keystone dropped out of the monarchical edifice, things were not over and done with. The moral effect spread out across the entire society witnessing this unheard-of event. Shaken was the structure not only of the political but also of the entire social edifice, which fundamentally was held together not by the external resources of power but by forces of the soul. By far the most important disintegrating effect occurred in Russia. [emphases added]

For Hayek (1978a), Wieser ‘was for a long time my ideal in the field, from whom I got my main general introduction to economics’: he ‘floated high above the students as a sort of God’—‘I think it’s the only instance where, as very young men do, I fell for a particular teacher.’80 Hayek (1952 [1926]) had earlier swooned about Wieser—and laid down a swooning path for his own devotees. Four years after Mises (1922, 435) asserted that ‘The Lord of Production is the Consumer’ (‘Der Herr der Produktion ist der Konsument ’), Hayek (1952 [1926], 555, 567) gushed: Wieser

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inspired an admiration coming close to worship among all who came under the spell of his powerful personality. Readers of his work cannot fail to be impressed by his human greatness and universality … The form of exposition raises this favorite child of the great man [Menger] far above the rank of ordinary scientific literature. Wieser’s (1983 [1926]) last book is a fitting demonstration of the general truth that a work which is carried by a great idea assumes the characteristics of a great piece of art. Having as its architect a sovereign master of science, it reaches a towering height above all indispensable detail and becomes related to artistic creation. In this last work, where Wieser shakes off the fetters of specialization and disciplinary methods, his unique personality emerges in all its greatness, combining a universal interest in all fields of culture and art, worldly wisdom and experience, detachment from the affairs of the day, sympathy for the fellow-man, and freedom from narrow nationalism. In him the civilization of old Austria had found its most perfect expression. [emphases added]

MPS ‘consistency’ was also achieved through exclusion. In The Conservative Mind: From Burke to Santayana, Russell Kirk (1953) described what others have called the ‘Counter Enlightenment’ (a tradition to which Hayek belongs). The ‘three modern conservative thinkers’ who had the ‘greatest impact’ on Feulner’s (1991) ‘thought are Russell Kirk, Friedrich von Hayek and Milton Friedman.’ Kirk (14 January 1962) told Hunold that he had been ‘conferring’ with Goldwater (the likely 1964 Republican Party Presidential candidate); and Hunold (25 January 1962) told Kirk that when he had proposed him as an MPS member, Hayek had ‘categorically’ refused to even have him considered.81 On secretary-typed Hoover Institution memo, one Nobel Laureate (11 August 1994) told a future MPS President that it was ‘utterly unthinkable’ for Rita Ricardo-Campbell, the wife of the recently-deposed Hoover Institution Director, to become MPS President. He was happy to lobby anyone ‘personally and confidentially’ to achieve that outcome. The Hoover Senior Fellow, Roger Freeman, was initially blackballed from ‘election’ to the MPS because of an unproved assertion about an unpaid dental bill. Guy Sorman was blackballed from attending MPS meetings because (according to a future MPS President) he had written a book review in Reason which suggested that he ‘is not entirely on our side.’

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His nominator sent Sorman the letter—who then complained. In response, the MPS President told Sorman that the phrase ‘not entirely on our side’ was ‘Anglo-American jargon’ which as a Frenchman he had misunderstood. To no avail, Sorman’s nominator then c­ omplained about the Falstaffian behaviour of his fellow MPS Directors: ‘personal vetoes’ in a ‘star chamber’ were ‘not permissible in any free society.’82 In a letter to Read, Ayn Rand (1 August 1946) explained what the ‘free’ market required: whenever you have a chance to discuss the situation of intellectuals with any of your big business backers, you must drive relentlessly, at every opportunity, towards the goal of having them use their influence to clean up the Republican newspapers and magazines of their filthy load of pinks, and to hire the writers of our kind. That should be your purpose. This is the purpose for which I will fight by your side with everything I’ve got.83

Adding pomposity to these crude sentiments, the 1947 MPS Statement of Aims proclaimed: Even that most precious possession of Western Man, freedom of thought and expression, is threatened by the spread of creeds which, claiming the privilege of tolerance when in the position of a minority, seek only to establish a position of power in which they can suppress and obliterate all views but their own.84

Referring to Christ’s words, Mises (1951 [1932], 420) insisted: ‘More harm has been done, and more blood shed, on account of them than by the persecution of heretics and the burning of witches.’ One of Hayek’s McCarthyite associates was Frederick Nymeyer, who told Mises (12 October 1948) that he sat on some ‘important’ Boards of Directors and knew several of the ‘outstanding’ entrepreneurs in the United States. Nymeyer proposed to set up a ‘Liberal Institute’ under Mises’ leadership at the University of Chicago: Nymeyer was a ‘friend’ of the dean of the business school. In April 1949, the University of Chicago informed Nymeyer that they favoured ‘unrestricted’ gifts to be used with ‘academic

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freedom’—that is, they wished to select the staff of his proposed Liberal Institute—which, therefore, did not ‘materialize.’ But Nymeyer and his ‘friends’ probably exerted some influence in facilitating Hayek’s relocation from the LSE to Chicago and in the early 1950s; and Nymeyer played a significant role in raising funds for the MPS (Hülsmann 2007, 855–857). Hayek’s (1949) ‘The Intellectuals and Socialism’ was regarded by Richard Cornuelle as ‘like the Holy Bible’ (cited by Doherty 2007). To achieve ‘consistency,’ in 1950 (within weeks of arriving at the University of Chicago) Hayek—with Nymeyer’s assistance—began targeting academics for liquidation (Leeson 2017). In 1955, Lawrence Klein (the recipient of the 1980 Nobel Prize for Economic Sciences) appears to have been one of the ‘free’ market victims—he was denied promotion at the University of Michigan. Cult-consistency has a psychological dimension: the Austrian School of Economics, with their ‘united front’ with ‘Neo-Nazis’ (Block 2000, 40), have colonized the history of economics profession (Chapter 1, above). Ebeling (2017a)—Caldwell’s pick to edit The Collected Works of F. A. Hayek: Hayek and the Austrian Economists: Correspondence and Related Documents—has ‘never sensed any underlying racism or race prejudice in those leading libertarian writers in the middle decades of the twentieth century.’ But Hayek was at pains to point out and was to repeat this many times, that his family could not have Jewish roots … when I asked him whether he felt uncomfortable about Jewish people he replied that he did not like them very much, any more than he liked black people’ (Cubitt 2006, 51). The Jewish-born E. Roy Weintraub (SHOE 3 May 2014) told the community that had elected him their President: The entire episode [is] a tale with no Austrian/Hayekian/Mt. Pelerin-ian connection whatsoever … There was, in fact no successful ‘campaign’ against Klein.

Caldwell—the ‘free’ market monopolist of the Hayek Archives—did not come to Weintraub’s aid as his Duke University colleague illustrated the ‘tales’ that pass for evidence in Austrian-promoting circles.

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The Hayek Archives reveal that William A. Paton Sr. (11 February 1955) insisted that Hayek be allowed to ‘respond candidly’ to the proposed promotion. Just in case Hayek was unaware of the ideological dimension, Paton reminded him that the Jewish-born Klein was ‘completely’ in the ‘wrong camp.’ The University of Michigan formally invited Hayek to pass judgment on Klein. Hayek’s written reply (if he made one) is not in the Hayek Archives.85 Apparently in reward for his assistance in pursuing Klein, Paton Sr. was Hayek’s guest at the 1957 MPS meeting.86 Clare Griffin, the Fred M. Taylor Professor of Business Economics at the University of Michigan, was already an MPS member87; and W. Allen Spivey, also at the University of Michigan’s Business School, was invited to attend the 1959 MPS meeting.88 Koether (15 January 1960) was invited to deliver a lecture on ‘Free Markets and Free Press’ to the University of Michigan.89 In 1958, Paton was ‘elected’ to the MPS (along with Rothbard, Seldon, Lundberg and Campbell, AEI’s Director of Research and soon-to-be Director of the Hoover Institution)90; and contributed a chapter to Mises’ Towards Liberty Festschrift on ‘Recollections Re a Kindred Spirit (1971).’ To have unrestricted access to his cousin (whose cooking and con­ versation he could barely tolerate), one Cold War ideologue abandoned his wife and children (who grew-up with an absent and largely-­ unknown father); while two others, the spy Julius Rosenberg and his wife, Ethel, went to the electric chair (leaving two orphans) rather than ‘naming names.’ To Hunold, Dr. D.C. Renooij (19 January 1960) named the name of an ordained Baptist minister, Ira Latimer, a former communist who had attended the 1959 MPS meeting as an employee of the Conference of American Small Business Organizations. Hunold (12 February 1960) told Latimer’s employer, Harland Shaw, that Hayek had obtained a ‘confidential’ report from the FBI. Shaw (19 February 1960) replied that possession of such reports was ‘against the law.’ From whom did Hayek obtain these documents? The Salt Lake City Chief of Police, W. Cleon Skousen? According to Russ Bellant (1991, 33, 36), the ‘National Military Industrial Conference’ (1955–1961) was a forum through which elements in the Pentagon could interact with leaders of large corporation

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including United Fruit, Standard Oil, Honeywell, US Steel and Sears Roebuck; their Institute for American Strategy was established to conduct ‘cold war propaganda.’ Cleon Skousen (12 March 1960) told Latimer that he had been speaking at many Military Industrial Conferences and that he felt that the ‘tide’ was gradually rising. He appeared to relate the resulting ‘momentum’ to the upcoming election in which Eisenhower’s vice president, Nixon, faced Kennedy: ‘we’ may be able to make a significant ‘showing’ during 1960.91 According to his John Birch Society obituary, ‘during his tenure as an FBI agent Skousen was closely associated with J. Edgar Hoover (Skousen was one of two FBI agents authorized to speak about communism if Hoover could not address the topic himself ).’ His ‘friend,’ Cecil B. DeMille, the ‘famous movie director,’ suggested the title of Cleon Skousen’s (1958) The Naked Communist because it ‘stripped away communism’s facade, revealing the long-term goals of the communist agenda’ (Mass 2006). According to a 1962 FBI memo, Skousen was one of those who was ‘promoting their own anticommunism for obvious financial purposes’ (Zaitchik 2009). Ernie Lazar examined Cleon Skousen’s nearly 2000page FBI file and reported that one Bureau memo concluded that he has been making numerous speeches around the country in which he describes himself as a former ‘top aide’ to the Director. He did not hold such a position.

The FBI was equally scathing about another ‘professional ­anticommunist,’ Fred Schwartz, who is an ‘opportunist and we are not having anything to do with him and his activities … such people as Dr. Schwarz are largely responsible for misinforming people and stirring them up emotionally to the point that when FBI lecturers present the truth, it becomes very difficult for the misinformed to accept it.’92 Can the recruitment process into the Divine Right of the ‘Free’ Market provide insights into the recruitment process into Al Qaeda and their affiliates? In ‘It All Began With Fred Schwarz,’ North (2010, 240) described how this emotional stirring-up dominated his life: ‘My main academic interest in 1958 was anti-Communism.’ In 1956, he had

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been taken to ‘hear the anti-Communist Australian physician Fred Schwarz, when I was 14, in one of his first speaking tours in the United States. Shortly thereafter, I sent Schwarz’s Christian Anti-Communism Crusade $100 ($650 in today’s money), which were big bucks for me.’ Like Skousen’s nephew, Mark Skousen, North is an MPS member. In keeping with the purpose of the MPS—to preserve intergen­ erational entitlements—William A. Paton Jr. was a guest at the 1984 MPS meeting.93 Alfred Jesse Suenson-Taylor, 1st ‘Baron Grantchester OBE, MA’ (19 August 1960) complained about dilution of the MPS membership—he preferred the ‘old days’ when ‘suitable’ people were asked if they would like to join. But now-a-days, ‘particular’ groups had been ‘pushing’ their friends.94 In three successive British general election, Suenson-Taylor had been defeated in 1922 by the Old Etonian, Esmond Cecil Harmsworth, later 2nd Viscount Rothermere and press baron; in 1923 by Roundell Cecil Palmer (later 3rd Earl of Selborne), the grandson (on his mother’s side) of Robert Arthur Talbot GascoyneCecil, 3rd Marquess of Salisbury, the last British Prime Minister to lead from the House of Lords; and in 1924 by Sir James Augustus Grant (later 1st Baronet). He was most concerned that there appeared to be a delay in the ‘election’ of his daughter to the MPS.95 MPS membership has an unusual quality: according to Hayek (1973), it was planned as a ‘closed’ society of selected members which was to expand through approved ‘election.’ Others referred to this as being ‘co-opted’ or gaining an ‘appointment.’96 In 1959, Mises arranged for Koether to be invited to the MPS meeting97; Koether (8 August 1960) immediately moved to have his son and daughter invited for ­prospective MPS membership.98 Could Shenoy have obtained lifetime tax-payer support as a tenured academic had her father not been an MPS member? Tony Benn had to wait a decade to renounce his peerage; and when Michael Polanyi (19 October 1960) tried to leave the MPS, he had to wait until his resignation was ‘accepted.’99 Wilbur Katz (21 May 1956) complained to Machlup that he had tried to resign years ago but had been ignored.100 Brandt (8 January 1962) had sought to ‘liquidate’ the Society because it had been ‘poisoned’ by ‘multilateral vituperation’—and was ‘embarrassed’ to find that his name was still being used for promotional purposes.101 Robbins (9 July 1952),

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who had left in 1950 in protest at Hayek’s amorality, complained to W. Allen Wallis that he was still being invoiced for dues despite having alerted him over two years previously that he had resigned.102 In 1973, attempts were made to reconstruct the ‘spontaneous’ order in both Chile (11 September) and the United States (20 October). The first was approved of by those who organized the 1981 MPS meeting; the second—the Saturday Night Massacre—was undertaken by Bork, an MPS member. The Watergate investigation, Nixon hoped, had come to an end when he abolished the office of the Special Prosecutor and the ‘investigation’ turned-over to the Justice Department (Chapter 9, below). The idealized ‘chivalric’ code of the medieval Second Estate—the honour, piety and courtly manners that merged with an aristocratic warrior ethos—derives from the Old French term chevalerie (‘horse soldiery’). Caldwell (2009, 319) referred to Hayek’s lies using the ­ analogy of a horse’s orifice (Chapter 6, below); Samuel Finer (1988) wrote The Man on Horseback: The Role of the Military in Politics; and his brother detected in Hayek a ‘thoroughly Hitlerian contempt for the democratic man’ (Finer 1945, 210). In the same year that Hayek (1992b [1977]) hailed the MPS ‘consistent doctrine,’ he made his first visit to Pinochet’s Chile. In November 1981, the MPS met in the coastal city of Viña del Mar, Chile. Hayek (1978a) told James Buchanan that the spontaneous order would have to be reconstructed; and according to the MPS brochure: The year 1973 was a year of important change in Chile. The existing system came to an end amidst the chaos and inefficiency resulting from growing State intervention. The aim of the economic policy undertaken that year was to establish conditions that would permit the generation of a process of prosperity within the framework of liberty and justice. A significant aspect of the Economic Policy is the definition of the subsidiary role of the State [emphases added] which gives the private sector the freedom to assign productive resources on a competitive basis … The whole government program is designed to establish a political system based on personal freedom which makes it possible to achieve sustained growth within the framework of equal opportunity.103

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Pedro Ibanez was ‘elected’ to the MPS shortly before Allende was elected Chilean President.104 In 1981, he took his MPS guests to visit his ‘country estate’ with a stop en route to observe the source of Pinochet’s power—the Escuela de Caballeria, the ‘equestrian training grounds for the Chilean army’ (Brodin 1983). As one of Pinochet’s Senators, Ibanez (6 May 1981) organized the MPS conference and must have overseen (if not actually written) the brochure. He told Feulner that about fifty representatives of other Operation Condor countries (Argentina and Brazil) would attend; as would thirty ‘top’ Chilean businessmen—each of whom would pay $2,000.105 Pinochet’s Treasury Minister (Ministerio de Hacienda), Rolf Luders and Finance Minister, Sergio de Castro, were nominated by Cáceres in 1981, ‘elected’ to the MPS in 1982, and expelled in 1989 for non-payment of dues.106 In 2006, Pinochet’s wealth was estimated to be at least US$28 million—far in excess of what he could have acquired solely on the basis of his salary as President, Chief of the Armed Forces, and (immune-from-prosecution) Senator-for-Life (Rohter 2006). According to Chamberlain (1982b), ‘Chile is a living teacher of Mont Pelerin economic principles’; and according to Luders, the ‘strong Chilean tradition of entrepreneurship took over’ (cited by Sorman 2008). Also according to Luders, it was essential to have a ‘strong, just and impersonal government’ plus the ‘heightening of personal merit and effort as a moral principle’ (cited by Chamberlain 1982b). For the Chilean MPS meeting, $96,154 was raised from Chilean corporations, plus $60,000 from Chilean ‘guests,’ leaving the local committee a deficit of $8155. The Chileans had already received a $30,000 subsidy from MPS International: twice, Pedro Ibanez (11 January 1982; 16 April 1982) requested a bail-out from the MPS President—which was apparently approved in September 1982.107 ‘Free’ market religion appeals to the imagination of Utopians with a ‘T account’ bookkeeping mentality (Assets  = Liabilities, Supply = Demand). Luders promoted the let-them-eat-cake privatization of water: ‘From a strictly economic point of view, it’s rational to use water where it’s worth the most. It’s like potatoes or cars; water is not a special thing. It’s just another good. I don’t see the problem … If you really need it, you should be willing to pay for it.’ Privatization worked for land-owners like himself and therefore everyone could ‘buy it’:

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But if the value is higher making electricity than in the city, then it makes sense to keep it with the company. If the value is higher in the farms, he can buy it from Endesa (the energy company). Endesa will sell it—I’m sure. They’re not irrational … We need water, electricity, we need many other things. I actually have a farm close to Santiago, and we have had a problem with our water and Endesa, and they have agreed to use the water to make electricity, then pump it up to our canal. And it works fine. (cited by Saverin 2012)

At the 1981 MPS meeting, Luders also asserted that the ‘State should only undertake any economic activity or regulation if no lower organ is filling the need adequately (principle of subsidiary)’ (cited by Chamberlain 1982b). In Chile, the person most associated with concept of the ‘subsidiary role of the State’ was the admirer of Spanish ‘Fascism,’ Jamie Guzman (Cristi 2017). According to Caldwell and Montes (2014a, 30, n. 94, 29, 32; 2014b; 2015a, 286, n. 94, 285, 286, 288), the Junta Militar Act (13 September 1973) stated that ‘the promulgation of a new constitution is under study, and the work is led by Professor Jaime Guzman.’ The Junta’s ‘Constitution of Liberty’ left ‘President’ Pinochet in office for a further eight years, ‘strengthened property rights, increased economic freedoms and established the subsidiary role of the state.’ Influenced by Guzmán, Pinochet also called for an ‘autocratic and protected democracy.’ The ‘most important influences’ on Guzmán’s worldview were ‘Catholic Thomism’ and the ideas of the German jurist, Carl Schmitt. Hayek was introduced to the Austrian School of Economics via ‘Othmar Spann The Philosopher of Fascism’ (Polanyi 1934, 1935); and Schmidt was the ‘crown jurist of the Third Reich’ (Frye 1966). According to Mises Wire, the MPS member, Gottfried Dietze, was Hayek’s ‘personal friend … Prussian through and through,’ a ‘student and friend of Carl Schmitt,’ and a ‘Wehrmacht soldier and friend of Otto Skorzeny and it was probably these reasons that allowed him to emigrate to the USA’ (Noto 2006). Bork began his interview: ‘Dr. Hayek, you were trained as a lawyer, I understand.’ Hayek (1978a) replied: ‘At that time, you could study economics in Vienna only as part of the law degree; so I did a regular law degree, although only the first part in the normal way. Thus, I have

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a very good education in the history of law. But then I discovered that I could claim veterans’ privileges, and so I did the second part in modern law in a rush and forgot most of modern Austrian law. I was later again interested. In fact, in 1939, or rather in 1940, I was just negotiating with the Inner Temple people to read for a barrister there when I had to move to Cambridge; so the thing was abandoned.’ Hayek’s (1978a) interest in law related to the ‘spontaneous’ order: ‘I became so interested in the evolution of the law and the similarity between the evolution of Roman law and the later evolution of common law that I wanted just to know a little more about judge-made law.’ Bork asked: ‘When did you first begin to think about the relationship between legal philosophy and the problem of maintaining a free society?’ Hayek replied: ‘Well, that’s difficult to remember. I began to think about this problem in the late thirties in a general way, and I think it began with the general problem of the genesis of institutions as not designed but evolving. Then I found, of course, that law was paradigmatic for this idea. So it must have been about the same time that I wrote the counter-revolution of science thing, when I was interested in the evolution of institutions, that my old interest in law was revived—as paradigmatic for grown institutions as distinct from designed institutions.’108 Hitler’s political appeal was directly related to the policy-induced unemployment that Hayek and Mises promoted: the Nazis vote rose from 2.6% (1928) to 37.27% (1932). Nazi theories appealed to both of Hayek’s parents and at least one of his brothers (Heinrich). Hayek (1978a) reflected to Bork about ‘the causes of the intellectual appeal of the Nazi theories … take a man like Carl Schmitt, one of the most intelligent of the German lawyers, who saw all the problems, then always came down on what to me was intellectually and morally the wrong side. But he did really see these problems almost more clearly than anybody else at the time—that an omnipotent democracy, just because it is omnipotent, must buy its support by granting privileges to a number of different groups. Even, in a sense, the rise of Hitler was due to an appeal to the great numbers. You can have a situation where the support, the searching for support, from a majority may lead to the ultimate destruction of a democracy.’

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Hayek (1978a) connected Schmitt to the post-Hitler, political ­philosopher phase of his career: Perhaps I should explain this. You see, the reason why I ever wrote The Road to Serfdom—In the late thirties, even before war broke out, the general opinion in England was that the Nazis were a reaction, a capitalist reaction, against socialism. This view was particularly strongly held by the then-director of the London School of Economics, Lord Beveridge, Sir William Beveridge, as he was then. I was so irritated by this—I’d seen the thing develop–that I started writing a memorandum for him, ­trying to explain that this was just a peculiar form of socialism, a sort of middle-class socialism, not a proletarian socialism. That led first to turning it into an article and then turning it into that book, for which I was able to use material I had already accumulated for a book I had planned about the abuse and decline of reason, of which the ‘counterrevolution of ­science’ thing was to be the first, introductory, part.109

Chamberlain (1944, 1984) wrote both the Foreword to Road to Serfdom and the National Review summary of the 1984 MPS meeting: Karl Brunner said that the ‘Keynesian tradition typically attributes to government and its apparatus the attitude of a benevolent dictator.’ Hayek, from his own perspective as a refugee from Austrian and German Nazism, could hardly have been expected to take his chances that an English or an American dictator might providentially be good-hearted.

Yet six years earlier, Hayek (1978a) had explained to Rosten that democracy would lead to something like what [J. L.] Talmon [1960] has called ‘totalitarian ­democracy’–an elective dictatorship with practically unlimited powers. Then it will depend, from country to country, whether they are lucky or unlucky in the kind of person who gets in power. After all, there have been good dictators in the past; it’s very unlikely that it will ever arise. But there may be one or two experiments where a dictator restores freedom, individual freedom.110

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Shortly after Pinochet seized power, Hayek told Seigen Tanaka (1974): ‘It may be said that effective and rational economic policies can be implemented only by a superior leader of the philosopher-statesman type under powerful autocracy. And I do not mean a communist-dictatorship but rather a powerful regime following democratic principles.’ Cáceres (12 August 1997) successfully lobbied for the 2000 MPS general meeting to be held in Chile (for which private sector funding would, he insisted, be readily available): the Junta had sought to create a ‘free’ market economic system and a ‘free’ social order and had been obliged to overcome ‘many’ obstacles.111 The 1981 MPS brochure proclaimed that Chile’s ‘new system’ had led to ‘less than 3.5% of strikes.’112 In Chile in 1981, Hayek defended the ‘Chilean miracle’ for having avoided ‘trade union privileges of any kind.’ 3197 Chileans were murdered, 20,000 were officially exiled and their passports marked with an ‘L,’ and about 180,000 fled into exile—about 2% of the population (Wright and Oñate 2005, 57; Montes 2015, 7). Hayek was contemptuous of what he dismissed as Amnesty International’s ‘bunch of leftists’ who publicized evidence about Pinochet’s human rights abuses (Farrant and McPhail 2017); and was equally contemptuous of those who complained about Nazi concentration camps (Chapter 2, above). Hayek (1977, 14, 15) told Ebeling: ‘I think Americans have long been mistaken that propaganda [emphasis added] must be expensive because it must from the beginning be directed to the masses—now that is very expensive, and it’s also useless. The masses take their information, not from educational institutions, but from the daily press and the media. If you want to be successful you have to educate what I call the intellectuals—the makers of opinions. That ought not to be a very expensive business, but a very considerable intellectual effort.’ Abraham Lincoln’s election as President (6 November 1860) appeared to made secession and civil war (1861–1865) inevitable. In 1948, apartheid had forcibly seceded Africans: they ‘lived’ and voted in Bantustans even if they lived and worked in ‘white’ South Africa. After a referendum (5 October 1960), South Africa seceded from the British Commonwealth and became a Republic (31 May 1961); and Rhodesia declared a Unilateral Declaration of Independence (11 November 1965).

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Woodrow Wilson (1856–1924) was the last American President whose parents owned slaves—or rather, the Presbyterian Church and then the Presbyterian Church of the Confederate States of America rented slaves for them as part of his father’s salary package.113 In 1918, Wilson’s Fourteen Points doomed Habsburg neo-feudalism. By the 1980s, apartheid had become as friendless as the Habsburg neofeudalism had been—supported only by ‘free’ market cold warriors. On 2 October 1986, Congress overrode Reagan’s veto of the Comprehensive Anti-Apartheid Act. In 1988, Nelson Mandela became effectively free to begin negotiating the transition to democracy. According to Chamberlain (1987), Davenport died ‘without realizing that he was on course of winning a tremendous victory.’ As a ‘profound’ student of southern Africa, he had ‘battled manfully to save our government from the mistake of applying sanctions to the South African economy. He had warned that sanctions would cost black people their jobs without doing a thing to kill apartheid … if the inner history of American journalism is ever to be truly written, John Davenport will bulk large in it.’ To promote the ‘free’ market, Davenport uncritically consumed a vast amount of white supremacist government propaganda. He read and marked with a tick ‘This Is Rhodesia’—which began with ‘solemn’ words from Rhodesian Prime Minister Ian Smith: ‘We have struck a blow for the preservation of justice, civilization and Christianity, and in the spirit of this belief we have this day assumed our sovereign independence. God bless you all.’114 After the Carter Administration closed the Rhodesia Information Office in Washington, Davenport sought funding for a ‘free’ market replacement: a monthly ‘Rhodesia News Letter.’115 He also formulated a Chase-funded ‘PROPOSED CORPORATE AD CAMPAIGN’ to achieve a ‘higher level’ of ‘public understanding and support.’116 According to the World Bank, under Pinochet Chilean inflation (GDP deflator) was 678% (1974), 347% (1975), 247% (1976) and 101% (1977); and in the year of the coup: 414% (1973).117 The MPS brochure provided the consistent doctrine: Chilean inflation reached ‘1000% in 1973.’ According to Chamberlain (1982b) inflation ‘topped 1,000 per cent under Allende; and Caldwell and Montes (2014a, 9; 2014b; 2015a, 268) informed their Review of Austrian Economics readers

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that in August 1973, ‘the month before the military coup, inflation was running at an annualized rate close to 1,000%.’ For their less gullible Chilean readers, they reported that inflation was ‘606.1 percent in 1973, 369.2 percent in 1974, and 343.3 percent in 1975’ (Caldwell and Montes 2015b, 91). Chamberlain’s (1982b) defense of the ‘free’ market—‘Reaganism is a Success in Chile’—rested on government propaganda: Chile was ‘the place where the Communist international conspiracy took its first bad licking. The Communists, in 1973, thought they had the country firmly under control with their advisers telling Salvador Allende just what to do to ruin a middle class and capture a government by illegal finagling from within.’ In contrast, the CIA website reported that the source of this ‘free’ market ‘knowledge’ was fraud: CIA also received information on ‘Plan Z’—purportedly drawn up by Allende’s Popular Unity coalition in the late period of the Allende Government to assassinate important political and military persons opposed to its leftist agenda. When allegations of the existence of ‘Plan Z’ first surfaced, the CIA noted that it probably was disinformation manipulated by the Junta to improve its image and to provide justification for its activities.118

In ‘Blackwashing Allende,’ The Economist (28 January 1999) repudiated the editor of their Economist Foreign Report: ‘Twice’ they had sent Robert Moss for long visits. He wrote a six-page report in March 1972, one of five pages in October 1973, a month after the coup. The second time, our man clearly had free access to the regime and its evidence against Allende. But even in 1972 he talked widely to enemies of the Allende government. Both his reports damned it. Both produced mild versions of some charges now laid against Allende: for instance (1973), of Cubans training his personal guard, or guerrillas ‘tolerated’ by the government, (though the actual ones our reporter met were a fairly hopeless, partly Amerindian group, more like Mexico’s Zapatists than the strike force of revolution). But what did this ferocious critic of Allende’s regime say of its now alleged political tortures or killings? Not a word.

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The Economist concluded that the title of Moss’ (1973) ‘savagely ­critical’ Chile’s Marxist Experiment was in ‘fact overblown … The opposition press and parties carried on. So did elections, and even in March 1973 the regime could win only 44% of the vote for Congress.’119 But according to Caldwell and Montes (2014a, 7, 7, n. 23; 2014b; 2015a, 267, 267, n. 23), Allende was ‘Chile’s first Marxist President (and the first Marxist President democratically elected in the western world)’; and ‘Moss (1973) on the Marxist experiment’ was ‘well‐researched.’ For their Chilean audience—many of whom may have received complimentary copies of Moss’ (1973) book from the Junta and some of whom may have assisted in its writing—all references to Moss were deleted (Caldwell and Montes 2015b). On 11 September 1973, Pinochet (1991, 333–335) told Allende: ‘the plane is ready and he may go anywhere except to Argentina.’ Chamberlain (1982b) repeated this consistent doctrine’: ‘hungry housewives beating pots and pans in the street shamed the Chilean military into throwing Allende out of office and provoking him to commit suicide after he refused safe conduct out of the country.’ But a laughing and swearing Pinochet was also captured on radio informing his troops: ‘that plane will never land. Kill the bitch and you eliminate the litter’ (cited by Kornbluh 2013, 113). Crozier (1993, 110–111) used tax-exempt funds from ‘educational charities’ to help install Pinochet: the destabilisation of the Allende regime was probably the last successful covert action undertaken by the CIA before the disaster of Watergate. I played a modest part in it, willingly and in what I considered a good cause.

In ‘The Intellectuals and Socialism,’ Hayek (1997 [1949], 224) distinguished between ‘the real scholar or expert and the practical man of affairs’ and non-propertied intellectuals, who were ‘a fairly new phenomenon of history,’ and those whose low ascribed status deprived them of what Hayek regarded as a central qualification: ‘experience of the working of the economic system which the administration of property gives.’120 Pinochet administered ‘his’ property through fraud, tax-evasion, money laundering and shell companies (Rohter 2006).

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According to Chamberlain (1982b), the Junta ‘are proponents of a free economy and are prepared to defend it with arms.’ Also according to Chamberlain (1982c), ‘The story goes’ that Pinochet ‘took a copy of Prof. Paul Samuelson’s Keynesian textbook into the Santiago presi­ dential palace when he assumed office.’ But ‘Samuelson did not wholly satisfy him’ and so he turned to the Chicago version of the ‘free’ market. Shortly before he was detained in London, Pinochet told a journalist that ‘I’ve always been a very studious man … I read a lot, especially history’ (cited by Guardiola-Rivera 2013, 399). Pinochet (1982, 13, 38–39, 48, 163) ‘conscientiously’ studied socialism and Marxism: ‘for twenty years I went deeper and deeper into that ideology.’ Pinochet (1991, 125, 176) studied so hard that he had a nervous breakdown; he became ‘Professor of Geopolitics’ at the Military Academy (War College) and, with the assistance of his future torturer-in-chief, Manuel Contreras, authored five books on geopolitics and military history (O’Shaughnessy 2000, 20, 24).121 Pinochet (1991, 138–139) described his time as a student at the War Academy under the title: ‘Strategy, Tactics … and Marxism’. As a ‘Professor,’ he edited the Academy’s magazine, and ‘continued my studies on Marxism.’ The standard texts for someone of his ­ideological persuasion were—and remain—Mises’ Socialism (1922), Liberalism in the Classical Tradition (1985 [1927]) and Human Action (1949), plus Hayek’s Road to Serfdom (1944) and Constitution of Liberty (1960)— which were available to ‘Professor’ Pinochet in Spanish translations (Leeson 2018a). As a conspiratorial Professor/soldier devoted to these ‘free’ market causes, these texts must surely have figured in his studies and/or his teaching. The MPS brochure defined the subsidiary role of the State as ­having given the ‘private sector the freedom to assign productive resources on a competitive basis’; while Caldwell and Montes (2014a, 12; 2014b; 2015a, 271) asserted that the ‘increased competition’ that resulted from Pinochet’s coup had a ‘huge’ positive impact on the long-run efficiency and productivity of Chilean firms. But neither the MPS brochure nor Caldwell and Montes (2014a, b; 2015a, b) refer to the role that the Nixon Administration played in destabilizing the Chile. In 1970, the CIA’s deputy director of plans wrote in a secret memo: ‘It is firm

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and continuing policy that Allende be overthrown by a coup. … It is imperative that these actions be implemented clandestinely and securely so that the USG [the US government] and American hand be well hidden.’ That same year Nixon ordered the CIA to ‘make the economy scream’ in Chile to ‘prevent Allende from coming to power or to unseat him’ (Leeson 2018a).122 On 23 March 1982, General José Efraín Ríos Montt seized power in Guatemala and began an extermination campaign: at least 250,000 Guatemalan children were estimated to have lost at least one parent to the violence. In The Wall Street Journal, Manuel Ayau (1982), the MPS President (1979–1980), described the ‘consistent doctrine’: the ‘military in various Latin American countries have seen it as their obligation to attempt to rescue their disintegrating countries.’ When Montt seized power ‘the public mood was joyous’ because he is ‘accepted by the public as sincere and credible’ and those who ‘know him can vouch for his anti-communist views.’ But Ayau was outraged that the ‘US press and influential Congressmen blame the violence on indigenous social problems.’ This made ‘people in Guatemala more pessimistic.’ The Conquistadors seized Central and South America through ­violence and deception; Latifundias were then established by European monarchs who rewarded service with extensive land grants; and colonial law promoted the ‘free’ market—the forced recruitment of ­ local ­labourers. According to the conspiracy theorist, Reed Irving, the Reverend Moon’s Washington Times is one of the ‘few newspapers in the country that provides some balance’ (cited by Glaberson 1994). In the Washington Inquirer, Irvine (1982) cited Ayau (referred to as a ­‘distinguished Guatemalan economist’): United Fruit came down here and cleared land that was uninhabited. How could they get people to work here? They provided them with hospitals, stores selling goods at cost, higher wages, sanitary conditions, education for their children … Now I don’t think that’s exploitation.

In Guatemala in June 1954, land reform was halted when the CIA overthrew the democratically-elected President, Jacobo Árbenz, and installed the military dictatorship of Carlos Castillo Armas. According to Irvine

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(1982), the Archbishop of Guatemala issued an April 1954 pastoral letter which declared: ‘The people of Guatemala must rise as one man against this [communist] enemy.’ Property rights are institution-specific. If Hayek were to ennoble his library assistant with no post-secondary educational qualifications as ‘Dr.’ to illegally obtain for him ‘legal’ immigration status (a green card) plus a full Professorship at a North American public university—who ‘owns’ the property bought with the fraudulently-obtained proceeds? According to Hayek (1978a), the ‘robber baron was a very honoured and honourable person, but he was certainly not an honest person in the ordinary sense. The whole traditional concept of aristocracy, of which I have a certain conception—I have moved, to some extent, in aristocratic circles and I like their style of life. But I know that in the strict commercial sense, they are not necessarily honest. They, like the officers, will make debts they know they cannot pay.’123 Hayek described Pinochet as an ‘honourable general’ (cited by Caldwell and Montes 2014a, 38, n. 121; 2014b, n. 121; 2015a, 293, n. 121). Ayau (1982) concluded that although ‘most businessmen’ have a ‘fear’ of the ‘free market’: The people involved in Guatemala’s coup are recognized as sincere, honest, young officers who wish to retrieve the prestige of their profession, discredited by the previous government, and who are trustingly depending on private enterprise to solve the economic problems.

Most of Montt’s 75,000 murders occurred between April and November 1982. At the tax-exempt Hillsdale College, Ayau (1984) explained why such violence was inevitable if the ‘economic and e­ thical principles of the free society’ were violated: ‘Land reform has never worked and it cannot work because it allocates land not according to the law of comparative advantage … land reform turns governments into agents promoting the insecurity of rights, instead of the p ­ rotector of rights. It dispossesses some and gives rights to the same land to ­others. Violence is bound to occur.’ According to Ayau (1984), ‘The military usually take over a government as a measure of last resort, when generalized discontent begins to

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prevail and they anticipate the breakdown of law and order. This is the reason why most of the coups d’etat are well received by the ­people.’ Ayau asked: ‘Why is it not understood that freedom is a prerequisite for sound allocation of resources, for widespread incentives to exist, and even for morality to prevail?’ The ‘only solution is freedom: to allow people to peacefully solve their own individual problems’ because ‘freedom is just and efficient [Ayau’s emphasis].’ The enemy was • the ‘educational establishment;’ • those who didn’t understand that ‘Land concentration is a natural phenomenon … in the United States the natural outcome has been that 50% of the privately owned land is owned by 1% of the population’; and • those with ‘lofty international jobs’ whose ‘incomes’ are ‘not subject to taxes.’ According to Benjamin Valentino’s (2004, 215) Final Solutions: Mass Killing and Genocide in the 20th Century, Montt’s ‘guns and beans’ strategy consisted of telling peasants: ‘If you are with us, we’ll feed you, if not, we’ll kill you.’ According to Caldwell and Montes (2014a, 19, 21, 23, n. 71; 2014b; 2015a, 277), Hayek’s ‘Visit to the President of the Republic’ had been first initiated by Ayau who they describe as a ‘key advocate of classical liberalism in Latin America, the founder of Universidad Francisco Marroquín in Guatemala.’ Ayau’s nickname was ‘Musso’ because of his similarity to Mussolini. In 2015, Montt was prosecuted for war crimes.

Notes 1. MPS Archives Box 100. 2. MPS Archives Box 103. 3. https://csumb.edu/business/dean-shyam-kamath. 4. MPS Archives Box 101. 5. MPS Archives Box 100. 6. https://www.montpelerin.org/statement-of-aims/.

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7. Friedman Archives Box 22.11. 8. https://mises.org/journals/aen/aen11_2_1.asp. 9. CLS Archives Box 2.5. 10. CLS Archives Box 3.1. 11. MPS Archives Box 3.5. 12. MPS Archives Box 41.12. 13. Hayek Archives Box 169. 14. MPS Archives Box 122. 15. MPS Archives Box 68. 16. MPS Archives Box 130. 17. MPS Archives Box 125. 18. MPS Archives Box 125. 19. http://www.thinktankedblog.com/think-tanked/2010/08/salaries-oftop-think-tank-leaders.html. 20. Hayek Archives Box 36.17. 21. http://mises.org/etexts/mises/anticap.asp. 22. Friedrich Hayek interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 23. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 24. The others were squalor, want, idleness and disease. 25. As expressed by the imaginary ‘Hilary.’ 26. To Feulner. MPS Archives Box 82. 27. http://www.americanrhetoric.com/speeches/huberthumphey1948dnc. html. 28. http://www.freerepublic.com/focus/news/805932/posts https://www. lewrockwell.com/1970/01/murray-n-rothbard/rothbard-writesthe-dixiecrats/. 29. http://www.freerepublic.com/focus/news/805932/posts https://www. lewrockwell.com/1970/01/murray-n-rothbard/rothbard-writesthe-dixiecrats/. 30. MPS Archives Box 102. 31. Hayek Archives Box 34.17. 32. MPS Archives Box 76. 33. http://phillysoc.org/3490-2/. 34. http://www.coordinationproblem.org/2011/12/thank-you-alex-forthe-corrective-to-krugman-and-warsh.html.

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35. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 36. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 37. Are the Leube family really buried in the Kaisergruft as Leube told his CSU Hayward/East Bay colleagues? 38. MPS Archives Box 115. 39. MPS Archives Box 85. 40. http://www.margaretthatcher.org/document/114631. 41. http://www.margaretthatcher.org/document/114630. 42. Hayek (2 February 1984) to William Johnson. Hayek Archives Box 29.38. 43. Seminar notes (16 February 1993). Fürth Archives Hoover Institution Box 12. 44. MPS Archives Box 52.9. 45. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 46. Friedrich Hayek, interviewed by Earlene Craver date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 47. 1983 MPS Members Directory. Davenport Archives Box 23.3. 48. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 49. Feldstein had to resign from the MPS shortly after being elected (to become CEA Chair) but remained ‘very interested.’ MPS Archives Boxes 76 and 83. 50. Burns rejoined the MPS in 1982. MPS Archives Box 66. 51. MPS Archives Box 66. 52. MPS Archives Box 46.3. 53. Archived at LewRockwell.com (https://www.lewrockwell.com/1970/01/ murray-n-rothbard/against-womens-lib/). 54. http://tobybaxendale.com/about-me/. 55. http://www.iea.org.uk/blog/sudha-r-shenoy-1943-2008-rememberedfondly.

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56. http://www.coordinationproblem.org/2014/06/robert-leeson-hayekand-the-underpants-gnomes.html. 57. http://www.prisonstudies.org/sites/default/files/resources/downloads/ wppl_10.pdf. 58. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 59. Friedrich Hayek, interviewed by Armen Alchian 11 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 60. Letter to Harold Luhnow. Hayek Archives Box 58.16. 61. Friedrich Hayek, interviewed by Armen Alchian 11 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 62. https://www.montpelerin.org/statement-of-aims/. 63. Shenfield (20 October 1977) to Arthur Kemp. MPS Archives Box 52.9. 64. MPS Archives Box 66. Paish’s resignation may have been unconnected to any disapproval of Hayek’s behavior. http://wiz.ancestry.com.au/ wiz/RecordImage/?recordId=167107261904. 65. MPS Archives Box 43.4. 66. MPS Archives Box 41.6. 67. Friedrich Hayek, interviewed by Jack High date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 68. https://www.montpelerin.org/statement-of-aims/. 69. In 1984, Robert Reilly told Davenport that he was the only person who called him at the White House to discuss metaphysics. Davenport Archives Box 23.9. 70. To David Boaz of the Council for a Competitive Economy. Hayek Papers Box 16.43. 71. Hayek Papers Box 25.22. 72. Davenport Archives Box 23.9. 73. MPS Archives Box 40.8. 74. MPS Archives Box 3.5. 75. Hunold (17 July 1959) to Ohlin. MPS Archives Box 11.7. 76. http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1974/press.html.

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77. Ann Scott (5 March 1967) to Davenport. Davenport Archives Box 37.6. 78. http://www.coordinationproblem.org/2011/12/thank-you-alex-forthe-corrective-to-krugman-and-warsh.html. 79. https://history.fee.org/publications/americas-economists-payhomage-to-mises/. 80. Friedrich Hayek, interviewed by Earlene Craver date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 81. MPS Archives Box 43.2. By that time, the MPS had broken up into warring factions—this report may have been part of Hunold’s vendetta against Hayek and others. 82. MPS Archives Boxes 103, 104 and 115. 83. https://history.fee.org/correspondence/ayn-rand-to-leonard-e-readletter/. 84. https://www.montpelerin.org/statement-of-aims/. 85. Hayek Archives Box 67.6. 86. MPS Archives Box 11.7. 87. MPS Archives Box 41.5. 88. MPS Archives Box 40.8. 89. MPS Archives Box 41.6. 90. MPS Archives Box 57.4. 91. MPS Archives Box 41.7. 92. https://web.archive.org/web/20090904041655/http://ernie1241. googlepages.com:80/skousen. 93. MPS Archives Box 22.8. 94. MPS Archives Box 41.10. 95. MPS Archives Box 41.10. 96. Leoni (7 January 1960) to Hunold. MPS Archives Box 41.6. 97. MPS Archives Box 40.6. 98. MPS Archives Box 41.11. 99. Polanyi’s secretary to Hunold. MPS Archives Box 42.10. 100. MPS Archives Box 50.1. 101. MPS Archives Box 51.8. 102. MPS Archives Box 50.7. 103. MPS Archives Box 24.2. 104. MPS Archives Box 66. 105. MPS Archives Box 54.1.

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106. MPS Archives Boxes 66 and 74. 107. MPS Archives Box 73. 108. Friedrich Hayek interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 109. Friedrich Hayek interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 110. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 111. To Feulner. MPS Archives Box 120. 112. MPS Archives Box 3.5. 113. The Reverend Joseph Ruggles Wilson (1822–1903) was ‘unreconstructedly Southern’ in values and politics. An enthusiastic supporter of the Confederacy, he helped organize the Presbyterian Church of the Confederate States of America, and taught his son, Woodrow, the justification of the South’s secession from the Union. http://www. presidentialavenue.com/ww.cfm. 114. Davenport Archives Box 44.10. 115. Davenport Archives Box 9.7. 116. Davenport Archives Box 16.34. 117. http://data.worldbank.org/indicator/NY.GDP.DEFL.KD. ZG?locations=CL. 118. https://www.cia.gov/library/reports/general-reports-1/chile/. 119. http://www.economist.com/node/184063. 120. ‘Though nobody will regret that education has ceased to be a privilege of the propertied classes, the fact that the propertied classes are no longer the best educated and the fact that the large number of people who owe their position solely to the their general education do not possess that experience of the working of the economic system which the administration of property gives, are important for understanding the role of the intellectual.’ 121. According to Hugh O’Shaughnessy (2000, 24), Pinochet’s books were written ‘almost certainly with Contreras’ help.’ 122. http://nsarchive.gwu.edu/NSAEBB/NSAEBB8/ch26-01.htm. 123. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/).

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References Archival Insights into the Evolution of Economics(and Related Projects) Cristi, R. (2017). The Genealogy of Jaime Guzman’s Subsidiary State. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part IX: The Divine Right of the ‘Free’ Market. Basingstoke: Palgrave Macmillan. Farrant, A., & McPhail, E. (2017). Hayek, Thatcher, and the Muddle of the Middle. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part IX: The Divine Right of the ‘Free’ Market. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2013). Hayek: A Collaborative Biography: Part I: Influences From Mises to Bartley. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2015a). Hayek: A Collaborative Biography: Part II: Austria, America and the Rise of Hitler, 1899–1933. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2015b). Hayek: A Collaborative Biography: Part III: Fraud, Fascism and Free Market Religion. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2015c). Hayek: A Collaborative Biography: Part IV: England, the Ordinal Revolution and the Road to Serfdom, 1931–1950. Basingstoke: Palgrave Macmillan. Leeson, R. (2017). Hayek: A Collaborative Biography: Part VII: ‘Market Free Play with an Audience’: Hayek’s Encounters with Fifty Knowledge Communities. Basingstoke: Palgrave Macmillan. Leeson, R. (2018a). Hayek: A Collaborative Biography: Part VIII: The Constitution of Liberty: ‘Shooting in Cold Blood’ Hayek’s Plan for the Future of Democracy. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2018b). Hayek: A Collaborative Biography: Part XV: The Chicago School of Economics, Hayek’s ‘luck’, and the 1974 Nobel Prize for Economic Science. Basingstoke: Palgrave Macmillan. McVicar, M. (2017). Christian Reconstructionism and the Austrian School of Economics. In R. Leeson (Ed.), Hayek: A Collaborative Biography: Part IX: The Divine Right of the ‘Free’ Market. Basingstoke: Palgrave Macmillan. Mitch, D. (2015). Morality Versus Money: Hayek’s Move to the University of Chicago. In R. Leeson (Ed.), Hayek: A Collaborative Biography: Part IV: England, the Ordinal Revolution and the Road to Serfdom (pp. 1931–1950). Basingstoke: Palgrave Macmillan.

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Ravelli, G., & Bull, A. (2018). The Pinochet Regime and the Transnationalization of Italian Neo-fascism. In R. Leeson (Ed.), Hayek: A Collaborative Biography: Part XI: Liberalism in the (Austrian) Classical Tradition. Basingstoke: Palgrave Macmillan. Teacher, D. (2018a). ‘Neutral Academic Data’ and the International Right (1). In R. Leeson (Ed.), Hayek: A Collaborative Biography: Part XI: Liberalism in the (Austrian) Classical Tradition. Basingstoke: Palgrave Macmillan. Teacher, D. (2018b). ‘Neutral Academic Data’ and the International Right (2). In R. Leeson (Ed.), Hayek: A Collaborative Biography: Part XI: Liberalism in the (Austrian) Classical Tradition. Basingstoke: Palgrave Macmillan. Theroux, D. (2015). Hayek and Me. In R. Leeson (Ed.), Hayek: A Collaborative Biography: Part V: Hayek’s Great Society of Free Men. Basingstoke: Palgrave Macmillan.

Other References Allen, H. (1983, January 2). The Nobel Ideas of Hayek’s Mind. Atlantic City Press. Allison, J. (2015). The Leadership Crisis and the Free Market Cure. New York: McGraw Hill. American Economic Review. (1950). In Memoriam: Frank Dunstone Graham 1890–1949. Vol. 40, No. 2. Papers and Proceedings of the Sixty-Second Annual Meeting of the American Economic Association (May), 585–587. Anderson, R. (1999, December 3). George and Me. LewRockwell.com. https:// www.lewrockwell.com/1999/12/robert-g-anderson/george-and-me/. Austrian Economics Newsletter. (1978). CLS Summer Fellow. Fall. Vol 1. No. 3. Ayau, M. F. (1982). After the Coup: Assessing Guatemala’s Future. Wall Street Journal. Reprinted in The Mont Pelerin Newsletter, February 1983. Ayau, M. F. (1984, November). Give Freedom Its Turn in Latin America. Imprimis, 13(11). https://imprimis.hillsdale.edu/give-freedom-its-turn-in-latinamerica/. Bellant, R. (1991). Old Nazis, the New Right, and the Republican Party. Boston: South End Press. Bjerre-Poulsen, N. (2002). Right Face: Organizing the American Conservative Movement 1945–65. Copenhagen: Museum Tusculanum Press. Block, W. (2000). Libertarianism vs Objectivism; a Response to Peter Schwartz. Reason Papers, 26, 39–62. http://www.reasonpapers.com/pdf/26/ rp_26_4.pdf.

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Block, W. (2014). Radical Economics: An Interview with Walter Block. Austrian Economics Newsletter, 19(2) (Summer 1999). https://mises.org/ library/radical-economics-interview-walter-block. Blundell, J. (1990, June 1). Waging the War of Ideas: Why There Are No Shortcuts. Reprinted from the Heritage Foundation Lecture Series: Heritage Lecture #254. https://www.atlasnetwork.org/assets/uploads/misc/chapter-2waging-the-war-of-ideas-blundell-march-20-2007-final.pdf. Blundell, J. (2008, September 19). Sudha R. Shenoy 1943–2008, Remembered Fondly. Institute of Economic Affairs. http://www.iea.org.uk/ blog/sudha-r-shenoy-1943-2008-remembered-fondly. Blundell, J. (2014). IHS and the Rebirth of Austrian Economics: Some Reflections on 1974–1976. Quarterly Journal of Austrian Economics, 17(1), 92–107. https://mises.org/library/ihs-and-rebirth-austrian-economics-some-­ reflections-1974%E2%80%931976. Boettke, P. J. (1992, August 1). Friedrich A. Hayek (1899–1992). FEE. https:// fee.org/articles/friedrich-a-hayek-1899-1992/. Boettke, P. J. (1995, May 1). The Story of A Movement: A Review Essay of Vaughn’s Austrian Economics in America. The Freeman, 322–326. https://fee. org/articles/the-story-of-a-movement/. Boettke, P. J. (2011, December 6). Thank You Alex for the Corrective to Krugman and Warsh. Coordination Problem. http://www.coordinationproblem.org/2011/12/thank-you-alex-for-the-corrective-to-krugman-and-warsh. html. Boettke, P. J. (2014, June 7). Robert Leeson, Hayek and the Underpants Gnome. Coordination Problem. http://www.coordinationproblem.org/2014/06/robertleeson-hayek-and-the-underpants-gnomes.html. Brodin, E. (1983, February). Vina del Mar Hosts Mont Pelerin Society. Mont Pelerin Society Newsletter. MPS Archives Box 67. Buchanan, J. (1992). I Did Not Call Him ‘Fritz’: Personal Recollections of Professor F. A. v. Hayek. Constitutional Political Economy, 3(2), 129–135. Buckley, W. F., Jr. (1996, February 6). Murray Rothbard, RIP. National Review. https://history.fee.org/publications/murray-n-rothbard-rip/. Caldwell, B. (1998). Why Didn’t Hayek Review the General Theory? History of Political Economy, 30(4), 545–569. http://institutoamagi.org/download/ CaldwellBruce-WhyDidn%27tHayekReviewGeneralTheory.pdf. Caldwell, B. (2009). A Skirmish in the Popper Wars: Hutchison Versus Caldwell on Hayek, Popper, Mises, and Methodology. Journal of Economic Methodology, 16(3), 315–324. http://www.tandfonline.com/doi/pdf/10.1080/ 13501780903129306.

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Caldwell, B. (2011). The Chicago School, Hayek, and Neo-liberalism. In R. Van Horn, P. Mirowski, & T. Stapleford (Eds.), Building Chicago Economics New Perspectives on the History of America’s Most Powerful Economics Program. Cambridge: Cambridge University Press. Caldwell, B., & Montes, L. (2014a, August). Friedrich Hayek and His Visits to Chile (CHOPE Working Paper No. 2014–12). Caldwell, B., & Montes, L. (2014b, September 26). Friedrich Hayek and His Visits to Chile. Review of Austrian Economics. First Online. Caldwell, B., & Montes, L. (2015a, September). Friedrich Hayek and His Visits to Chile. Review of Austrian Economics, 28(3), 261–309. Caldwell, B., & Montes, L. (2015b). Friedrich Hayek y Sus Dos Visitas a Chile. Estudios Públicos, 137(Verano), 87–132. https://www.cepchile.cl/ cep/site/artic/20160304/asocfile/20160304101209/rev137_BCaldwellLMontes.pdf. Carver, T. N. (1949). Recollections of an Unplanned Life. Los Angeles: The Ward Ritchie Press. Casey, G. (2013). Murray Rothbard Major Conservative and Libertarian Thinkers (Vol. 15). New York: Bloomsbury. Chamberlain, J. (1944). Foreword. In F. A. Hayek (Ed.), The Road to Serfdom. Chicago: University of Chicago Press. Chamberlain, J. (1974, October). Unknown Nobel Laureate. Wall Street Journal. Chamberlain, J. (1982a). A Life With the Printed Word. Chicago: Regnery Gateway. Chamberlain, J. (1982b, January 9). ‘Reaganism’ Is a Success in Chile. Human Events. MPS Archives Box 45.7. Chamberlain, J. (1982c, January 9). Chile May Have the Answer To Social Security Problem. Human Events. MPS Archives Box 45.7. Chamberlain, J. (1984, January 11). Hayek Returns to Cambridge. National Review. Chamberlain, J. (1987, July 1). Losing a Great Journalist, John Davenport. Conservative Chronicles. MPS Archives Box 48.3. Coleman, K. (2002, August 8). CSUH Austrian Executive MBA Program Kaput Vienna Partner Cites Credentials Issue. The Pioneer, 1, 6. Connolly, K. (2005, January 19). Hitler’s Mentally Ill Cousin Killed in Nazi Gas Chamber. Daily Telegraph. Crozier, B. (1979). The Minimum State: Beyond Party Politics. London: Hamish Hamilton.

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Kurtz, H. (2010, November 17). Fox News Chief Roger Ailes Blasts National Public Radio Brass as ‘Nazis.’ The Daily Beast. http://www.thedailybeast. com/fox-news-chief-roger-ailes-blasts-national-public-radio-brass-as-nazis. Lavoie, D. (1977). Austrian Economics at New York University. Austrian Economics Newsletter, 1(1). Levy, S. (2016, December 19). Ray Dalio on Trump: ‘If You Haven’t Read Ayn Rand Lately, I Suggest That You Do.’ Business Insider. http://www.businessinsider.com/bridgewaters-ray-dalio-on-donaldtrump-administration-2016-12. Lusher, A. (2017, February 16). Donald Trump’s Father ‘Told Staff’ to ‘Get Rid of Blacks’ when Running Property Firm with His Son, FBI Dossier Claims. Independent. Machlup, F. (1974, December). Hayek’s Contribution to Economics. Swedish Journal of Economics, 76, 498–531. Machlup, F. (1980). An Interview with Fritz Machlup. Austrian Economics Newsletter, 3(1). https://mises.org/library/interview-fritz-machlup. Martin, A. (2009, August 1). Give BB&T Liberty, but Not a Bailout. New York Times. http://www.nytimes.com/2009/08/02/business/02bbt.html?_r= 5&pagewanted=all. Martin, A. (2010, September). The Analects of Boettke. Journal of Private Enterprise, 26(1), 125–141. Mass, W. (2006, April 3). In Memoriam: He Definitely Made a Difference. The New American John Birch Society. Online reprint by TheFreeLibrary.com. McCormick, D. (1934). The Talkative Muse. London: L. Williams. McCormick, D. (1956). The Wicked City: An Algerian Adventure. London: Jarrolds. McCormick, D. (1965). The Private Life of Mr. Gladstone. London: Frederick Muller. McCormick, D. (pseudonym: Deacon, R.) (1979). The British Connection Russia’s Manipulation of British Individuals and Institutions. London: Hamish Hamilton. McCormick, D. (1980). Approaching 1984. London: David and Charles. McFadden, R. (2014, April 2). Charles Keating, 90, Key Figure in ’80s Savings and Loan Crisis, Dies. New York Times. https://www.nytimes. com/2014/04/02/business/charles-keating-key-figure-in-the-1980s-savingsand-loan-crisis-dies-at-90.html. Miller, J. (2013, April 8). Feulner’s Farewell. National Review. https://www. nationalreview.com/nrd/articles/343542/feulners-farewell.

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Mises, L. (1922). Die Gemeinwirtschaft: Untersuchungen über den Sozialismus. Jena: Gustav Fischer Verlag. http://docs.mises.de/Mises/Mises_Gemeinwirtschaft.pdf. Mises, L. (1932). Die Gemeinwirtschaft: Untersuchungen über den Sozialismus (2nd ed.). Jena: Gustav Fischer Verlag. Mises, L. (1944). Bureaucracy. New Haven: Yale University Press. Mises, L. (1949). Human Action a Treatise on Economics (1st ed.). New Haven: Yale University Press. Mises, L. (1951 [1932]). Socialism: An Economic and Sociological Analysis (J. Kahane, Trans.). New Haven: Yale University Press. Mises, L. (1956). The Anti-Capitalist Mentality. Toronto, ON: D. Van Nostrand. Mises, L. (1960). Planning for Freedom and Twelve Other Essays and Addresses. South Holland, IL: Libertarian Press. Mises, L. (1964, February 4). Deception of Government Intervention. Christian Economics. https://history.fee.org/publications/deception-of-governmentintervention/. Mises, M. (1984). My Years with Ludwig von Mises (2nd ed.). Cedar Falls, IA: Center for Futures Education. Mises, L. (1985 [1927]). Liberalism in the Classical Tradition (R. Raico, Trans.). Auburn, AL: Mises Institute. Mises, L. (1993 [1964]). Indefatigable Leader. Remarks by Ludwig von Mises on the Occasion of Henry Hazlitt’s 70th Birthday, on November 28, 1964. In H. Sennholz (Ed.), The Wisdom of Henry Hazlitt. New York: The Foundation for Economic Education. http://www.mises.ch/library/ Hazlitt_Wisdom_of_HH.pdf. Mises, L. (2003 [1969]). The Historical Setting of the Austrian School of Economics. Auburn, AL: Ludwig von Mises Institute. Mises, L. (2007 [1958]). Mises and Rothbard Letters to Ayn Rand. Journal of Libertarian Studies, 21(4), 11–16. Mises, L. (2009/1978 [1940]). Memoirs. Auburn, AL: Ludwig von Mises Institute. Mitch, D. (2016, December). A Year of Transition: Faculty Recruiting at Chicago in 1946. Journal of Political Economy, 124(6), 1714–1734. Montes, L. (2015). Friedman’s Two Visits to Chile in Context. http://jepson.richmond.edu/conferences/summer-institute/papers2015/LMontesSIPaper.pdf. Moss, R. (1973). Chile’s Marxist Experiment. New York: Wiley. Moss, R. (1975). The Collapse of Democracy. London: Temple Smith.

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New York Times. (1976, February 15). ‘Welfare Queen’ Becomes Issue in Reagan Campaign. http://www.nytimes.com/1976/02/15/archives/welfare-queen-­ becomes-issue-in-reagan-campaign-hitting-a-nerve-now.html. North, G. K. (1971). Reason, Neutrality and the Free Market. Modern Age (Spring), 138–142. http://www.mmisi.org/ma/15_02/north.pdf. North, G. K. (1992). The Coase Theorem a Study in Economic Epistemology. Tyler, TX: Institute for Christian Economics. North, G. K. (1999, August/September). Recollections of the 1974 South Royalston Conference on Austrian Economics. Biblical Economics Today, 21(5). http://www.garynorth.com/BET-Aug1999.PDF. North, G. K. (2010). It All Began with Fred Schwartz. In W. Block (Ed.), I Chose Liberty: Autobiographies of Contemporary Libertarians. Auburn, AL: Ludwig von Mises Institute. Noto, S. (2006, July 21). Gottfried Dietze, RIP. Mises Wire. https://mises.org/ blog/gottfried-dietze-rip. O’Shaughnessy, H. (2000). Pinochet: The Politics of Torture. New York: New York Press. Peterson, W. H. (1996, July 1). A History of the Mont Pelerin Society. The Freeman. https://fee.org/articles/a-history-of-the-mont-pelerin-society/. Peterson, W. H. (2009). Mises in America. Auburn, AL: Ludwig von Mises Institute. Pimlott, B. (1985). Hugh Dalton a Life. London: Cape. Pinochet, A. (1982 [1973], September 11). The Crucial Day. Santiago, Chile: Editorial Renacimiento. Pinochet, A. (1991). A Journey Through Life Memoirs of a Soldier (Vol. 1). Santiago: Instituto Geográfico Militar de Chile. Polanyi, K. (1934). Othmar Spann: The Philosopher of Fascism. New Britain, 3(53), 6–7. Polanyi, K. (1935). The Essence of Fascism. In D. Lewis, K. Polanyi, & J. Kitchen (Eds.), Christianity and the Social Revolution. London: Gollancz. Powers, K. (2016, April 11). Donald Trump’s ‘Kinder, Gentler’ Version. USA Today. https://www.usatoday.com/story/opinion/2016/04/11/donald-trumpinterview-elections-2016-ayn-rand-vp-pick-politics-column/82899566/. Raico, R. (2013, February 20). An Interview with Ralph Raico. Mises Institute. https://mises.org/library/interview-ralph-raico-0. Rand, A. (1964, March). Interview. Playboy. http://www.discoveraynrand.com/ playboyinterview.html.

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Rothbard, M. N. (2007). Betrayal of the American Right. Auburn, AL: Ludwig von Mises Institute. Rothbard, M. N. (2010). Strictly Confidential: The Private Volker Fund Memos of Murray N. Rothbard (D. Gordon, Ed.). Auburn, AL: Ludwig von Mises Institute. Rothbard, M. N. (2011). Economic Controversies. Auburn, AL: Ludwig von Mises Institute. Salerno, J. (1996). Why We Are Winning an Interview with Joseph Salerno. Austrian Economic Newsletter, 16(3). https://mises.org/library/why-were-winninginterview-joseph-t-salerno. Saverin, D. (2012, October 27). Q&A Rolf Lüders Schwarzenberg. The Yale Globalist. http://tyglobalist.org/in-the-magazine/theme/qa-rolf-ludersschwarzenberg/. Schmelzer, M. (2010). Freiheit für Wechselkurse und Kapital: Die Ursprünge neoliberaler Währungspolitik und die Mont Pélerin Society. Metropolitis: Marburg. Schulak, E. M., & Unterköfler, H. (2011). The Austrian School of Economics: A History of Its Ideas, Ambassadors, and Institutions (A. Oost-Zinner, Trans.). Auburn, AL: Ludwig von Mises Institute. Shehadi, N. (1991). The London School of Economics and the Stockholm School in the 1930s. In L. Jonung (Ed.), The Stockholm School of Economics Revisited. Cambridge: Cambridge University Press. Shenk, T. (2013). Maurice Dobb: Political Economist. New York: Palgrave Macmillan. Shenoy, S. (2003). An Interview with Sudha Shenoy. Austrian Economics Newsletter (Winter), 1–8. http://mises.org/journals/aen/aen23_4_1.pdf. Skousen, W. C. (1958). The Naked Communist. United States: Izzard Ink. Sorman, G. (2008). Cheers for Chile’s Chicago Boys Milton Friedmanesque Reforms Helped Create South America’s Most Prosperous Nation. City Journal (Winter). https://www.city-journal.org/html/cheers-chile%E2%80%99s-chicago-boys-13073.html. Steele, D. R. (2000, November). ‘Monstrous!’ Review of Justin Raimondo— An Enemy of the State: The Life of Murray N. Rothbard (Prometheus Books). Liberty. http://againstpolitics.com/an-enemy-of-the-state/. Stewart, J. B. (2017, July 13). As a Guru, Ayn Rand May Have Limits. Ask Travis Kalanick. New York Times. https://www.nytimes.com/2017/07/13/ business/ayn-rand-business-politics-uber-kalanick.html. Talmon, J. L. (1960). The Origins of Totalitarian Democracy. London, Great Britain: Secker & Warburg.

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Tanaka, S. (1974, May 17). What Will Happen to the World as Keynesian Economic Theories are Disproved? Views of Professor Hayek, a WorldFamous Authority on Inflation Sought. Shuukan Post. Hayek Archives 52.28. Thomas, B. (1991). Comment. In L. Jonung (Ed.), The Stockholm School of Economics Revisited. Cambridge: Cambridge University Press. Thorburn, W. (2010). A Generation Awakes: Young Americans for Freedom and the Creation of the Conservative Movement. Ottawa, IL: Jameson Books. Valentino, B. A. (2004). Final Solutions: Mass Killing and Genocide in the 20th Century. Ithaca: Cornell University Press. Van Horn, R. (2014). Henry Simons’s Death. History of Political Economy, 46(3), 525–535. Vedder, R. (1999). A Passion for Economics: An Interview with Richard K. Vedder. Austrian Economics Newsletter, 19(1). https://mises.org/library/passioneconomics-interview-richard-k-vedder. Walsh, M. C. (1968). Prologue A Documentary History of Europe 1848–1960. Melbourne, Australia: Cassell. Wieser, F. (1983 [1926]). The Law of Power. Lincoln, NE: Bureau of Business Research, University of Nebraska-Lincoln. Wright, T. C., & Oñate, R. (2005). Chilean Diaspora. In C. R. Ember, M. Ember, & I. Skoggard (Eds.), Encyclopedia of Diasporas: Immigrant and Refugee Cultures Around the World (Vol. II, pp. 57–65). New York: Springer. Zaitchik, A. (2009, September 16). Meet the Man Who Changed Glenn Beck’s Life Cleon Skousen Was a Right-Wing Crank Whom Even Conservatives Despised. Then Beck Discovered Him. Salon. https://web. archive.org/web/20090922170353/http://www.salon.com/news/feature/2009/09/16/beck_skousen/print.html.

6 The Fall of Left Utopia and the Rise of ‘Free’ Market Euphoria

1 Utopian Truth and Self-Interest The financial crisis that followed the bursting of the 1928–1929 Wall Street bubble undermined faith in markets and facilitated the rise of totalitarianism of the Right (the Third Reich). The fall of totalitarianism of the Left (the Soviet Union) was followed by (more) financial crises plus ‘free’ market euphoria. The fall of communism was also preceded by the American Savings and Loan (S&L) crisis—the failure of 1043 out of 3234 S&Ls (1986–1995). Then Finland had a banking crisis (1991–1993); and in 1992, there was a run on the Swedish currency. On Black Wednesday (16 September 1992), the British were forced to withdraw their ­currency from the European Exchange Rate Mechanism after losing £3.4 billion in defense of an overvalued exchange rate. Capital flight drove the 1994 Mexican peso crisis. Both Left and Right Utopia have fatal flaws—they misdirect entrepreneurial energy towards ‘The Party’ and the socially dysfunctional financial sector, respectively. Hayek- and Mises-promoted deflation spurred Keynes (1936) to enlist government spending to supplement © The Author(s) 2018 R. Leeson, Hayek: A Collaborative Biography, Archival Insights into the Evolution of Economics, https://doi.org/10.1007/978-3-319-77428-2_6

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(and ‘correct’) credit-crunch-prone finance. For those for whom ‘Washington’ symbolizes ‘tyranny,’ such ‘economic correctness’ was bound to lead to a ‘free’ market backlash. The fall of communism was followed by the award of nine Nobel Prizes for Economic Sciences to Americans for work which was interpreted as promoting the ‘free’ market: Coase (1991),1 Becker (1992), Douglas North (1993) and Robert Lucas (1995); and for those who applied the ‘free’ market to financial innovation: Harry Markowitz, Merton Miller and William Sharpe (1990) plus Robert Merton and Myron Scholes (1997). The Orwellian-named Long Term Capital Management (LTCM) was founded in 1994 by John W. Merriwether (former Vice-Chair and head of bond trading at Salomon Brothers). Scholes and Merton—­members of LTCM’s Board of Directors—had been rewarded in 1997 for their contribution to the ‘efficient management of risk … In a modern market economy it is essential that firms and households are able to select an appropriate level of risk in their transactions. This takes place on financial markets which redistribute risks towards those agents who are willing and able to assume them …A new method to determine the value of derivatives stands out among the foremost contributions to economic sciences over the last 25 years.’2 In 1998, LTCM lost $4.6 ­billion in less than four months following the 1997 Asian and the 1998 Russian financial crises. On 23 September 1998, the Federal Reserve coordinated a US$3.6 billion bail-out. The following year (12 November 1999), President Bill Clinton signed into law the Gramm-Leach-Bliley Act (the repeal of the 1934 Glass-Steagall Act), stating that ‘This historic legislation will modernize our financial services laws, stimulating greater innovation and competition in the financial services industry. America’s consumers, our communities, and the economy will reap the benefits of this Act.’3 GMU’s Manuel Johnson was replaced as Vice-Chair (1986–1990) of Greenspan’s Federal Reserve by David W. Mullins Jr. (1991–1994) who, in turn, left to join LTCM; and was succeed by Alan Blinder (1994–1996), who continued the euphoria until just before the Global Financial Crisis (Blinder and Reiss 2005). MPS’s Jerry Jordan was President of the Federal Reserve Bank of Cleveland (1992–2003);

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Frederic Mishkin sat on the Fed’s Board of Governors (2006–2008); and in 2005, Timothy Geithner, President of the New York Fed, was Greenspan’s acting Vice-Chair. By summer 2005, it was clear that the bubble in the US housing market was about to burst—and would be followed by ‘recessionary forces of typhoon proportions … financial and economic meltdown’ (Leeson 2005). But Greenspan (13 December 2005) informed the Federal Open Market Committee that the ‘underlying real rate of growth is really powerful. When one looks around the world, most economies are improving.’ In the United States, ‘some of the old-­ fashioned data’ are ‘showing some very strong signs … It’s hard to imagine an American economy that is as balanced as this one is.’ Greenspan continued: ‘And aside from the surprisingly high equity premium in the United States, we have very significant upward momentum in asset values. This is where the very important question of whether monetary policy should target asset prices comes in. The current situation is a very interesting case because I would say that we ought to be tightening at this particular point but not targeting the asset price increases. But it is clearly the potential for speculative activity—and its effect on asset prices—which is generating an assessment that we need to move, as far as evaluating the outlook for the overall economy … I think whatever froth there is in the housing market is becoming contained at this stage, and it’s getting contained largely because mortgage rates have moved up and are beginning to have an impact.’ Greenspan concluded: ‘If we can contain the presumptive housing bubble, then we have a really remarkable run out there’ (for similar sentiments, see Blinder and Reis 2005).4 For public consumption, Greenspan denied there was a bubble—just ‘froth.’ He later admitted that ‘froth’ was a ‘euphemism for a bubble’ (Financial Times 2007). Utopian Truth corresponds with self-interest. Salerno (1996) reported that ‘It’s no longer true that being an Austrian is a career killer. The profession is in such transition that good economists of any stripe can do well. Of course, you’re always better off echoing the mainline opinion. But Austrians are in this for more than professional success … We are Austrians because we are interested in the truth. Sometimes that requires sacrifice. Menger sacrificed, as did Mises, and Rothbard, and

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many other seekers of truth in political economy. The point is to change history for the better, not merely to go along.’ The World Trade Centre was bombed on 26 February 1993, killing six and injuring hundreds; the ‘Blind Sheik,’ Omar Abdel-Rahman, apparently an Al-Qaeda affiliate, was sentenced to life imprisonment. Six months after the attack, Rothbard (1993)—Salerno’s predecessor as Mises Institute Academic Vice President—declared: the ‘A-rabs’ under investigation ‘haven’t done anything yet. I mean, all they’ve done so far is not assassinate former President George Bush, and not blow up the UN building or assassinate [United States Senator] Al D‘Amato.’ Rothbard became, in effect, a spotter for Al-Qaeda: ‘I must admit I kind of like that bit about blowing up the UN building, preferably with [UN Secretary General] Boutros Boutros-Ghali inside.’ Rothbard (1994a) explained that ‘the least’ ‘free’ market believers could do ‘is accelerate the Climate of Hate in America, and hope for the best.’ But the damage inflicted by Al-Qaeda on the United States was tiny compared to the damage Austrians and their fellow-travellers inflicted on post-communist Russia. The second General Editor of The Collected Works of F. A. Hayek told the New York Times, that Hayek got the ‘satisfaction, the enormous satisfaction, not only of recognition, but of seeing what has happened in Eastern Europe and the former Soviet Union’ (cited by Nasar 1992). Boettke (1992) reported that ‘The twentieth century is replete with the blood of the innocent victims of socialist experiments. Stalin, Hitler, Mao, Pol Pot, and a host of lesser tyrants have committed heinous crimes against humanity in the name of one or another variant of socialism.’ And three years later, Boettke (1995) reported that ‘Throughout Eastern Europe and Russia, Austrian economists have emerged from the rubble of Communism.’ Six years after that, Boettke (2001, 1–2) was obliged to describe the post-Austrian rubble: According to official Russian statistics, 30% of the population (44 million people) was living below the poverty line (roughly $40/month) in September 1998. Life expectancy for adult males in Russia has declined from 64 in 1990 to 59 in 1998. It is estimated that 40% of Russia’s

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children are chronically ill. Since 1992 meat and dairy production is down 75%, grain production is down 55%, milk production down 60%, and Gross National Product is down 55%. Real per capita income is down as much as 80% from 1992 according to some measures.

Post-communist reconstruction had been ‘informed’ by Mises’ blind faith: if the ‘policies of nonintervention prevailed—free trade, freely fluc­ tuating wage rates, no form of social insurance, etc.—there would be no acute unemployment. Private charity would suffice to prevent the absolute ­destitution of restricted hard core of unemployables’ (cited by Peterson 2009, 9). Ebeling (2014, 1997)—regarded in MPS circles as a ‘total fool’ (Chapter 4, above)—was ‘frequently in the Soviet Union during its last years, doing consulting work on market reform and privatization’; where he had ‘lectured on privatization’ and ‘consulted with the Lithuanian government, the City of Moscow and the Russian parliament.’ Ebeling’s only qualifications were an eight year undergraduate degree from California State College (later University), an M.A. from the Austrian program at Rutgers and the Hillsdale College Ludwig von Mises Professorship of Economics. He was, presumably, one of Rothbard’s ‘We want externalities’ chanters. Post-communist Russia was a ‘transitional economy’—but transitioning to what? In ‘Coase and Hayek Travel East: Privatization and the Experience of Post-Socialist Economic Transformation,’ Haiduk (2015) documents the collapse of communism and the ‘free’-market-­ inspired rise of Putin’s ‘Russia of the Oligarchs.’ This is consistent with Rothbard’s (1994b, 12–13) promotion of the ‘Iron Law of Oligarchy’ that is, that regardless of any egalitarian or ‘democratic’ pretense, every organization, whatever its nature, from a central government down to the local chess club, will inevitably be run by a small elite of its most able, interested, and energetic members. That is simply a law of nature, and any claim otherwise is simply propaganda for suckers. Similarly, in government, there is always and inevitably, as [Gaetano] Mosca put it, a ‘ruling class.’

Rothbard (2011, 628) related this to a ‘free’ market blueprint for anti-democratic, post-communism:

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In every organized activity, no matter the sphere, a small number will become the ‘oligarchic’ leaders and others will follow … We need only look around us at every human activity or organization, large or small, political, economic, philanthropic or recreational to see the universality of the ‘Iron Law of Oligarchy’ … it is precisely the frozen inequality of income and power, and the rule by oligarchy, that has totally disillusioned the equality-seeking New Left in the Soviet Union. No one lionizes Brezhnev or Kosygin.

The ‘free’ market is promoted by those who believe in the Christian version of ‘voodoo economics’—divine revelation. Boettke (2001, 268)—a self-described ‘cheerleader’—promoted a ‘credible commitment to limited government’ and the adoption of ‘policies of economic freedom’: In such a world, miracles do happen and the people will be empowered to live peaceful and prosperous lives. It is my sincere hope that such a fate is in store for the peoples of Eastern and Central Europe and the former Soviet Union.

At the 200th anniversary celebration of the beginning of the Habsburgpoliced, neo-feudal century, Putin was celebrated as a ‘Savior’ (Chapter 10, below): he became Director of the Russian Federal Security Service (25 July 1998); Security of the Security Council (9 March 1999); and Prime Minister (16 August 1999). Mises insisted that the ‘inventive spirit was absent in Russia’ (Chapter 3, above)—Russians, however, inventively intervened to influence the outcome of the 2016 US Presidential election (and elsewhere). And 44 years after the King of Sweden awarded Hayek the Nobel Prize (and 55 years after Mises proposed conscription to counter the Russian threat), Sweden reintroduced conscription in response to the new Russian threat. In 1992, Hayek was awarded the Presidential Medal of Freedom: And finally, we honor Professor Friedrich von Hayek for a lifetime of looking beyond the horizon. At a time when many saw socialism as ordained by history, he foresaw freedom’s triumph. Over 40 years ago, Professor von Hayek wrote that ‘the road to serfdom’ was not the road to the future or to the political and economic freedom of man. A Nobel laureate, he is widely credited as one of the most influential economic writers of our century.

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Professor von Hayek is revered by the free people of Central and Eastern Europe as a true visionary, and recognized worldwide as a revolutionary in intellectual and political thought. How magnificent it must be for him to witness his ideas validated before the eyes of the world. We salute him. The people of the United States are indeed indebted to each of our ­honorees. You have touched us. You have enriched us. You have shaped our Nation’s destiny. And you’ve also shown us the strength and joy of a simple but powerful idea: the idea of freedom. God bless each of you, and may God bless our country.5

In 2009, the White House and the Nobel Peace Prize had—to use Hayek’s phrase—‘gone negro.’ Hayek would have been horrified to see the Inauguration Ball: he said that he did not like ‘dancing Negroes.’ He had watched a Nobel laureate doing so which had made him see the ‘the animal beneath the facade of apparent civilization.’ (Cubitt 2006, 23)

In 2009, Fox News conspiracy theorist, Glenn Beck, asserted that President Barack Obama has exposed himself as a person with a ‘deepseated hatred for white people or the white culture … He has a p ­ roblem. This guy is, I believe, a racist.’6 Utopian faith in the ‘free’ market continued until the—temporary— road block caused by the Global Financial Crisis. Beck (2009) ‘puffed’ W. Cleon Skousen’s (2009b [1981]) The 5000 Year Leap to No. 1 on Amazon. It remained in the top 15 all summer, holding the No. 1 spot in the government category for months. The book tops Beck’s 912 Project ‘required reading’ list, and is routinely sold at 912 Project meetings where guest speakers often use it as their primary source material. (Zaitchik 2009)

In ‘Glenn Beck Re-Energizes the Conservative Movement,’ the MPS member, Mark Skousen (2009a), described his uncle as a ‘devoted family man,’ before falsely asserting that he had been a ‘special assistant to J. Edgar Hoover.’ Beck

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actually considers himself a libertarian. I was on the Glenn Beck Show two weeks ago, and he asked all his guests — Steve Moore, Penn Jillette, and me — if we were libertarians. We all said yes, and he said, ‘So I am.’ He believes in maximum liberty and strict limits on the government’s powers as enumerated in the U. S. Constitution.

Cleon Skousen established his own publishing house—initially ‘The Freemen’ and then ‘The National Center for Constitutional Studies.’ Hayek sought to overthrow the Constitution of the United States and replace it with a single sentence written by a dictator-promoting European aristocrat (Chapter 3, above); but according to the Hayekian Mark Skousen, The boyish, articulate Beck is a dogmatic defender of the Constitution, which he believes is being perverted by both political parties in Washington. His top priority is to ‘take our country back.’ His patriotic enthusiasm is intoxicating, and his show is a hit around the country … The Obama election and the Democrats takeover of government has re-energized the freedom movement, and more and more conservatives are turning to Glenn Beck as their hero.

Beck and his uncle offered salvation: ‘Beck and Finally, hope we can believe in.’ Mark Skousen’s FreedomFest website reports: Now, with the help of Matt Kibbe and FreedomWorks, it’s happening! We are pleased to announce that Glenn Beck has accepted our invitation to speak. When we think of Glenn Beck, we think of the term ‘non-conformist.’ That’s us at FreedomFest. You can’t achieve success unless you are a non-conformist.7

Boettke and Kibbe are ‘fraternity brothers’—the Pan Hellenic framework may have prepared them for the authority of its Pan ­ Austrian equivalent. In ‘Peter Boetke brings a fresh perspective and wide range of talent to the prestigious Mont Pelerin Society, an economic powerhouse among the intelligentsia,’ Kibbe stated that Boettke’s election to the MPS Presidency is a ‘clear signal that this august intellec­ tual community… is adapting to the new opportunities and challenges

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of the Internet Age, and speaking to a younger generation of ­classical liberals. The audience for our ideas is so much bigger than ever before, and Pete brings a unique combination of Austrian scholarship, a rare ability to teach others, and the open spirit [emphasis added] of a community builder’ (cited by Major 2017). According to Boettke (2011a), ‘we have no better intellectual role models in this endeavour of constantly learning from professional peers than Mises and Hayek.’ Boettke tells his GMU students: ‘Unconventional ideas need to be stated in conventional form’—‘Think like a Misesian, write like a Popperian’ (cited by Martin 2010, 134). Hayek (1978a) told the ‘George Mason Nobel Laureate,’ James Buchanan, that he was a Popperian: we were exposed to the same atmosphere, and in the discussion, then, we both encountered two main groups on the other side: Marxists and psychoanalysts. Both had the habit of insisting that their theories were in their nature irrefutable, and I was already by this driven to the conclusion that if a theory is irrefutable, it’s not scientific. I’d never elaborated this; I didn’t have the philosophical training to elaborate it. But Popper’s book (1959 [1934]) gives the justification for these arguments–that a theory which is necessarily true says nothing about the world. So when his book came out, I could at once embrace what he said as an articulation of things I had already been thinking and feeling. Ever since, I have followed his work very closely.8

Karl Popper—the author of The Open Society and Its Enemies (1945a, b)— and Mises are conventionally located at opposite ends of the (falsifiable) knowledge to (irrefutable) Truth spectrum. With one exception (the aristocratic Buckley), Mises could not tolerate others expressing broadcast analysis or opinions (Chapter 2, above). And there was one category from whom Hayek (1975, 3, 8) was not ‘willing’ to listen—his opponents, who had ‘forfeited their right to be heard.’ In Notes and Recollections, Mises (2013 [1978 (1940)], 40–41) described his notion of science: ‘Unfortunately, the extraordinary ­freedom to speak’ which Böhm-Bawerk granted to ‘every member’ of his seminar was occasionally ‘abused’ by ‘thoughtless talkers.’ Mises particularly objected to Otto Neurath’s disturbing ‘nonsense’ which

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he presented with ‘fanatical fervor.’ Mises wanted ‘stronger use of the responsibilities inherent in a chairmanship’ to improve the situation— but Böhm-Bawerk ‘wanted no part of it. In science he believed, as did Menger, that everyone should be permitted to speak.’ In his Memoirs (2009 [1978 (1940)], 32) ‘responsibilities inherent’ was rectified to the ‘sharper wielding of a chairman’s upper hand’; and in The Collected Writings of F. A. Hayek (1994, 50), the ‘conversion’ that Hayek experienced when listening to the ‘extreme’ ‘social scientists, the science specialists in the tradition of Otto Neurath’ was rectified to ‘dissuaded’ (Chapter 2, above).9 When asked ‘What did Hayek think about subject x?’ Lachmann (his fellow Austrian-LSE economist) would routinely reply: ‘Which Hayek?’ (cited by Caldwell 2006, 112). According to Hayek (1978a): ‘Mises was, contrary to his reputation, an extremely tolerant person. He would have anyone in his seminar [in Vienna] who was intellectually interested. [Hans] Mayer would insist that you swore by the master, and anybody who disagreed was unwelcome.’10 Hayek also contradicted himself: Mises ‘became more human when he married. You see, he was a bachelor as long as I knew him in Vienna, and he was in a way harder and even more intolerant of fools than he was later [laughter]. If you look at his autobiography, the contempt of his for most of the German economists was very justified. But I think twenty years later he would have put it in a more conciliatory form. His opinion hadn’t really changed [emphasis added].’11 Is education a journey of discovery or a certification process for adolescent Rand devotees—a prelude to their employment in the ‘movement’ inspired by an Austro-Fascist? Boettke ‘often’ instructs his students to ‘love Mises to pieces,’ by which he means never lose sight of why you entered the discipline in the first place. (Evans 2010, 79)

According to Boettke (2007), Mises, Hayek, Rothbard and North were part of the ‘whole stew of people’ who have provide Austrians with ­‘eyeglasses … really fantastic work.’12 North is a public stoning theocrat; Rothbard (1993) defended Al-Qaeda associates and Klu Klux

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Klan assassins (Chapter 5, below); Mises (1985 [1927]) promoted ­political ‘Fascism’; and Hayek (1978a), who ‘just learned [Mises] was usually right in his conclusions, but I was not completely satisfied with his argument. That, I think, followed me right through my life. I was always influenced by Mises’s answers, but not fully satisfied by his arguments. It became very largely an attempt to improve the argument, which I realized led to correct conclusions. But the question of why it hadn’t persuaded most other people [emphasis added] became important to me; so I became anxious to put it in a more effective form.’13 According to his ‘Free The People’ website, Kibbe ‘did graduate work in economics at George Mason University and received his B.A. in Economics from Grove City College’ and is also ‘Distinguished Senior Fellow at the Austrian Economic Center in Vienna, Austria.’ In 2004, Kibbe founded FreedomWorks, which he describes as a national grassroots advocacy organization, and served as President until his departure in July 2015. Steve Forbes said ‘Kibbe has been to FreedomWorks what Steve Jobs was to Apple.’ Newsweek pronounced Kibbe ‘one of the masterminds’ of tea party politics.14

Kibbe was Boettke’s successor as Managing Editor of GMU’s Market Process and, together with FreedomWorks Chairman Dick Armey, wrote Give Us Liberty: A Tea Party Manifesto (Armey and Kibbe 2010). In ‘Freedom Rising,’ the Charles Koch Institute announced that it would have a booth at FreedomFest at which Fink will ‘lead a discussion about how we can effect greater freedom in society. He’ll draw on the work of Friedrich Hayek in setting out how ideas and policies can be produced.’ Also ‘experts from around the world: Barbara Kolm of Austria’s Hayek Institute, Leon Louw of the Free Market Foundation in South Africa,’ will explain ‘how government actions abroad relate to markets and the economy.’15 In order to ‘Debunk Climate Change Propaganda and Provide Balanced Perspective,’ ‘Dr Leon Louw’ and ‘Lord Monckton’ created a ‘CFACT’ lobby at the 2011 Durban United Nations Climate Change conference.16 ‘Louw is an ‘expert’ at the Heartland Institute17; and a Committee member of the ‘Association for Rational Inquiry

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into Claims of the Paranormal,’ who ‘became converted to capitalism mainly by the literature of Ayn Rand and [the Cold War science fiction writer] Robert Heinlein.’ He also claims to have been awarded the Don Quixote Award, the Social Inventions Award, the Freedom Torch Award and a UNISA Bachelor of Law18; also, elsewhere, a UNISA BA (African Studies).19 Beck and the Skousen family believe that the Angel Moroni—the guardian of the lost ‘golden plates’—visited the founder of their religion, Joseph Smith, on numerous occasions and that in 1829, the ‘Three Witnesses’ also reported seeing Moroni—in visions. Hayek fraudulently claimed to have predicted the Great Depression; and ‘The Hayek Prophecies,’ the ‘Lost Interview from the 1980s,’ is available for purchase: ‘Hear him predict the crisis and how to get out of it.’20 The website for Clean Skousen’s ‘Principles of Freedom 101’ ‘5000 Year Leap’ promotes a FREE 10-week online course presented by Hillsdale College. ‘Constitution 101: The Meaning and History of the Constitution’ … If you have come here and have seen the hand of God on The USA and you want to give up your sinful ways and repent, then see this page.21

Caldwell may have made more than a million dollars in Definitive Edition royalties in a single month on the back of Beck’s promotion of The Definitive Edition of Hayek’s (2007 [1944]) Road to Serfdom (Leeson 2015). As the fifth official (and ‘definitive’) biographer, Caldwell (2010) then informed readers of The Washington Post: ‘Hayek himself disdained having his ideas attached to either party.’22 This was part of the ‘consistent doctrine’—Harris and Seldon informed the 1992 MPS meeting that Hayek ‘remained scrupulously aloof from politics.’23 Yet at the 1984 MPS meeting, Hayek (1985, 8) stated: ‘Of course each of us has a duty as a citizen of his particular country to take part in political programs.’ The June 1985 Mont Pelerin Society Newsletter contains a photograph of Hayek meeting Reagan in the White House; plus the text of Jacques Chirac’s (1985) award to Hayek of the ‘Great Medal of Paris’ at the 1984 French MPS meeting: France was ‘far advanced’ down the

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road to serfdom with ‘obligatory taxes’ have risen significantly. Chirac became Gaullist French Prime Minister (1986–1988) and President (1995–2007). Phillip von Bismarck (President of the West German CDU’s Economic Council) hosted a gathering for 1982 MPS meeting attendees.24 The Habsburg Pretender (11 January 1986) told Feulner that he was forced to miss the upcoming MPS meeting because he had an annual strategy planning meeting of the European Parliament Christian Democratic caucus.25 As the MPS were meeting in Chile in 2000, the kleptocrat President of Argentina, Carlos Menem (1989–1999), was arrested over a weapons export scandal—in 2001 he fled to Chile. After returning to Argentina, he was found guilty of embezzlement, and sentenced to four-and-a-half years in prison. So politicized had the MPS become that Menem was invited to address the 1992 MPS meeting in Vancouver. Alberto Benegas Lynch (19 February 1992) alerted Feulner to Menem’s ‘free’ market credentials—granting monopolies and captive markets through privatization. But Feulner (4 March 1992) told Becker not to worry about such issues in his MPS Presidential Address—Ludwig Earhart had been Vice Chancellor (1957–1963) and Chancellor (1963–1967) of West Germany. Luigi Einaudi had also been President of Italy (1948–1955), and Sir Keith Joseph, Rhodes Boyson, Geoffrey Howe, etc. had been selected because of their leadership role in promoting the ‘Free Society.’26 The MPS obtained tax-exempt status in 1952 because—as the US Treasury Department informed them—they ‘are organized and operated exclusively for educational purposes.’27 Yet such was the colonization of government during the Reagan administration that a formal suspension of membership was proposed so that Burns, Greenspan, Shultz, Ed Meese III, etc., would not have to reapply after resigning to take up their positions in Washington. The lower levels could continue as members. Indeed, the 1986 new members including the Chair of the Federal Trade Commission (Daniel Oliver), the Chief, Policy and Rules Division, Mass Media Bureau, Federal Communications Commission (Charles Schott III), the Counsellor to the Attorney General (T. Kenneth Cribb, Jr.),28 plus the Associate Director for Programs, US Information Agency

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(Scott Thompson).29 Douglas Jay Feith, later Bush’s Undersecretary of Defense for Policy (2001–2005), was a guest at the 1988 MPS ­meeting30; Kevin James (Economic Litigation, US Department of Justice, Antitrust Division) asked to be invited to MPS meetings31; and John Lott (Chief Economist, US Sentencing Commission) was one of the 1988 MPS Bradley Fellows.32 The 1986 MPS session on ‘Reagan Economic Policy Informed Views,’ was chaired by McCracken and the panellists were Jordan, Niskanen, John Cogan, Christopher De Muth, Stephen J. Entin, plus Annelise and Martin Anderson.33 From the Earhart Foundation, Ware (16 January 1986) expressed his concern to James Buchanan that the forthcoming MPS meeting in Italy would make a ‘grand ­target’ for terrorists—but was reassured by the extensive presence of protective MPS affiliates in the Reagan administration—he mentioned Secretary of State Shultz, CIA Director Casey, and James Miller III, Chair of the Federal Trade Commission (1981–1985), Budget Director (1985–1988) and GMU ‘Distinguished Fellow.’34 In ‘Marketing the Free Market,’ Fisher (1986) described the channels of political influence that Hayek sought to exert over the British Conservative Party. In 1980, when criticized at an MPS meeting for not immediately denationalizing British industry, Sir Keith Joseph, Thatcher’s Secretary of State for Industry, replied: ‘It’s not my fault! A politician cannot legislate until the people demand it. It’s YOUR job to sell the people on the IDEA of denationalization before I can denationalize.’ Hayek targeted Thatcher’s ‘wet’ Cabinet ministers—Jim Prior and Sir Ian Gilmore—for removal from office (Leeson 2017a). ‘Exclusively for educational purposes?’ Jeremy Siegel attended the 1979 MPS meeting—but a future MPS President (5 February 1982) blackballed the future Wharton Business School Professor from the list of proposed MPS Fellowship recipients because: I know him. Not at all Mt. Pelerin type. Formal theorist. Little or no ­‘ideological’ interest.35

Although Fed Chair Paul Volcker (1979–1987) had eliminated the MPS-Burns Great Inflation, the same future MPS President

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(2 December 1987) disputed the value of inviting him as a guest to the MPS because he had not displayed a ‘commitment to the Free Society.’36 Hayek (1992 [1977]) explained the MPS achievement: a ‘consistent doctrine and some international circles of communication.’ According to Caldwell and Montes (2014a, 42; 2014b; 2015a, 297), the 1979–1980 Reagan-Thatcher victories gave Hayek ‘some hope’ for the future, because both of them sought to ‘limit the power of government and return to the principles of classical liberalism.’ According to Caldwell (1995, 70, n. 67), Hayek’s (1995 [1929], 68) endorsement of Mises’ ‘ruthless consistency’ in developing ‘economic liberalism to its ultimate [emphasis added] consequences’ is a reference to Liberalism in the Classical Tradition, in which Mises (1985 [1927], 19, 51) stated: The program of [Austrian] liberalism, therefore, if condensed into a single word, would have to read: property [Mises’ emphasis] … All the other demands of liberalism result from this fundamental demand … The victory of Fascism in a number of countries is only an episode in the long series of struggles over the problem of property.

Boettke (2011b) proclaimed to his GMU students and others: ‘I want everyone to realize’ that ‘We should be inspired by [Mises’] professional success, not only his courage to buck the prevailing trend.’ Ebeling (2011) agreed: ‘Without a doubt,’ Mises was ‘worthy of a Nobel Prize in Economics in the eyes of his peers in that earlier [inter-war] period, if there had been one—even among those holding views different than his own.’ But do Ebeling and Boettke tell their students about Mises’ promotion of inter-war ‘Fascist,’ including ‘Ludendorff and Hitler’? Hayek allegedly told Leube (2003b, 12) in a taped interview that he ‘never doubted that there are things in life worth fighting for and risking one’s own life for.’ Leube added that Hayek had been ‘born into an aristocratic family that could not only lay claim to a long academic tradition but also to a long and dutiful service to the Empire … Thus, consciously devoted to the vision and splendour of the Habsburg Empire he joined up in March 1917 … he was anxious to be sent as an artillery sergeant cadet to the intensely embattled Italian front … much to his dislike he

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missed by a few days the Battle of Caporetto in October/November 1917 that left many dead and wounded.’ Under many military codes, cowardice is punishable by death (‘shooting in cold blood, at dawn’). Hayek (1978a) ‘had decided to enter the diplomatic academy, but for a very peculiar reason. We all felt the war would go on indefinitely, and I wanted to get out of the army, but I didn’t want to be a coward. So I decided, in the end, to volunteer for the air force in order to prove that I wasn’t a coward. But it gave me the opportunity to study for what I expected to be the entrance examination for the diplomatic academy, and if I had lived through six months as an air fighter, I thought I would be entitled to clear out. Now, all that collapsed because of the end of the war. In fact, I got as far as having my orders to join the flying school, which I never did in the end. And of course Hungary collapsed, the diplomatic academy disappeared, and the motivation, which had been really to get honorably out of the fighting, lapsed [laughter].’37 Presumably, ‘Lt. Col. Richard M. Ebeling, PhD’ (2017) tells his Citadel Military College students that he has ‘never sensed any underlying racism or race prejudice in those leading libertarian writers in the middle decades of the twentieth century.’ In 2017, five US Joint Chiefs issued public condemnations of white supremacist groups—General Mark Milley stated: ‘The Army doesn’t tolerate racism, ­ extremism, or hatred in our ranks. It’s against our Values and everything we’ve stood for since 1775.’38 What would happen to a Citadel cadet who complained (à la Hayek, Chapter 1, above) that the military had ­ ‘gone negro’ after President Truman’s 1948 Executive Order 9981 (which abolished racial discrimination in the US Armed Forces and eventually led to the end of segregation in the services)? What would happen to a cadet who spoke of Colin Powell (the only AfricanAmerican to serve on the Joint Chiefs of Staff ) as Hayek spoke of the Nobel Laureate, Sir Arthur Lewis: he could see ‘the animal beneath the facade of apparent civilization’ when forced to watch ‘dancing negroes’ (Cubitt 2006, 23)? At the 1981 MPS meeting, Carlos Cáceres presented a paper on ‘The Chilean Way to the Market Economy’ which Chamberlain (1982, 358) interpreted as expressing ‘subconscious pity for Northern

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Hemisphere inability to take government off the producers’ backs.’ Chamberlain cited Cáceres: If political authority is not armed with the courage to rise above the pressure of the play of interest, it will prove extremely difficult for an impersonal regime to emerge that will have the will to prevent privileges of whatever nature … Fortunately, the features we have pointed out as requirements for setting up a market-economy regime are found in our country. All of them have even been included in the constitution approved in September of last year.

In what Chamberlain insisted was a ‘final admonishment’ and ‘peroration’ to both the ‘Western world’ and his North American and British colleagues,’ Cáceres concluded: External events may also take place … to weaken the strength of the nations of the Western world in the projection of a libertarian society.

Hayek (1978a) promoted rules-based dictatorship: ‘We can even describe a desirable state of affairs in the form of rules.’ They should not be rules of conduct; rules of conduct [should be] only for a dictator, not for the individuals. Rules of individual conduct which lead to a peaceful society require private property as part of the rules.’39 He also asserted: ‘perhaps the danger to intellectual freedom in the United States comes not from government so much as from the [labour] trade unions.’40 He was ‘most concerned, because it’s the most dangerous thing at the moment, with the power of the trade unions in Great Britain.41 I now am very much engaged in strengthening Mrs. Thatcher’s back in her fight against the unions.’ The British Labour Party ‘is essentially a [labour] trade-union party.’42 In an interview with El Mercurio, Hayek praised temporary dictatorships ‘as a means of establishing a stable democracy and liberty, clean of impurities’: the ‘Chilean miracle’ had broken, among other things, ‘trade union privileges of any kind’ (O’Brien 1985, 179; Robin 2014, 2015). Hayek sought to overthrow the Constitution of the United States and replace it by a single sentence written by a dictator-promoting European

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aristocrat (Chapter 3, above). After his second visit to Chile, Hayek dined with Thatcher and then wrote to her. About 20% of Hayek’s Archives (including the Hitler postcards with which the Hayek family communicated) were disciple-looted before arriving at the Hoover Institution. The carbon copy of Hayek’s letter to Thatcher is not avail­ able to scholars; and the copy that Thatcher received has also apparently disappeared. Thatcher’s reply suggests that Hayek’s 1982 letter ­contained sentiments similar to Cáceres’ 1981 MPS address. Thatcher (17 February 1982) told Hayek that she was aware of the remarkable success of the Chilean economy in reducing the share of government expenditure over the decade of the 70s. The progression from Allende’s socialism to the free enterprise capitalist economy of the 1980s is a striking example of economic reform from which we can learn many lessons.

The Prime Minster referred to ‘our traditions and our Constitution’— which Hayek must have been seeking to undermine: However, I am sure you will agree that, in Britain with our democratic institutions and the need for a high degree of consent, some of the measures adopted in Chile are quite unacceptable. Our reform must be line with our traditions and our Constitution. At times the process may seem painfully slow. But I am certain we shall achieve our reforms in our own way and in our own time. Then they will endure.43

In their summary of this reply, Caldwell and Montes (2014a, 41; 2014b; 2015a, 295) decline to report Mrs. Thatcher had stated that ‘Our reform must be line with our traditions and our Constitution.’ Hitler abolished trade unions and used single-issue referenda to ­legitimize his rule. In a letter to The Times, Hayek (5 June 1978) stated: ‘To hope for the necessary change from negotiations with the trade union leaders is a phantasma. But the mandate for the necessary action may be obtained by appealing over their heads to the workers at large. The world belongs to the courageous and not to then timid.’44 And in a subsequent letter, Hayek (11 July 1978) used Mises’ (plagiarized) concept of ­consumer sovereignty to defend the Tory leader: when she said that

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free choice is to be exercised more in the market place than in the ballot box, she has merely uttered the truism that the first is indispensable for individual freedom while the second is not: free choice can at least exist under a dictatorship that can limit itself but not under the government for an unlimited democracy which cannot.45

Four days earlier, Pedro Ibáñez (7 July 1978) had written to Hayek about the impact of his first visit to Chile, noting that it became even more important now that there was an increasing debate about new political institutions: Hayek’s ‘ideas constantly emerge as frequent subjects of discussion.’ However the final solution of these Hayekinfluenced constitutional discussions was still unclear (cited by Caldwell and Montes 2014a, 31; 2014b; 2015a, 287). Caldwell and Montes (2014a, 21, 22, n. 69, 52; 2014b; 2015a, 279, 305) assert that they had presented ‘evidence’ that Hayek’s ideas were ‘little known’ in Chile in the 1970s. It was, therefore, ‘very unlikely’ that they played ‘a role’ in the creation of the 1980 Chilean Constitution. Then (characteristically, in two footnotes) they contradict themselves: • According to a report in La Segunda (18 November 1977), Hayek also mentioned ‘certain ideas’ concerning his model constitution in a talk to a group of businessmen; • after he left, Cáceres (28 April 1978) told Hayek that on ­‘several’ occasions, Pinochet—as well as the members of the economic committee—had made ‘public’ statements acknowledging Hayek’s ­ ‘comments’ about the Chilean economy (cited by Caldwell and Montes 2014a, 19, 21, 23, n. 71; 2014a; 2015a, 280, n. 71). Candidate Trump told Daily Mail Online that his father could not have been arrested after a 1927 KKK rally: This is ridiculous. He was never arrested. He has nothing to do with this. This never happened. This is nonsense and it never happened. This never happened. Never took place. He was never arrested, never convicted, never even charged. It’s a completely false, ridiculous story. He was never there! It never happened. Never took place. Think—if it had, he would

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never have been able to get licenses in New York for anything a­ ssociated with his business, with construction. This is just bizarre and untrue. You don’t even know it’s the same person! Nobody says it was! (cited by Spargo 2015)

But the Fred Trump who was arrested gave his address as 175–24 Devonshire Road Jamaica—which (according to the 1930 Census) was where Donald Trump’s father lived (Bump 2016). Caldwell and Montes (2014a, 3, n. 8; 2014b; 2015a, 263, n. 8) assert that Mises—a card-carrying Austro-Fascist and member of the official Fascist social club—could not possibly have promoted Fascism because he was Jewish. Although ‘Ludendorff and Hitler’ were among the ‘Fascists,’ ‘Germans and Italians,’ defined and praised by Mises (1985 [1927], 44, 49), Caldwell and Montes assert that he was actually referring to ‘[Italian] Fascists.’ And while it is ‘true’ that from the beginning Pinochet’s regime, Guzmán was the ‘most influential’ advisor in legal and constitutional matters, they also assert that Guzmán falsely believed himself to be a Hayekian. Although Renato Cristi reported that Guzmán’s library contained copies of Hayek’s work, Caldwell and Montes assert that ‘relevant ­testimonies doubt’ that Guzmán had read them. These ‘relevant testimonies’ comprise Oscar Godoy, ‘Dean and Professor of Political Science at Pontificia Universidad Católica de Chile ’ who makes no reported comment on Guzmán but instead recalled in private correspondence that during the 1970s, he could ‘not find in Chile a counterpart to talk about Hayek’ and believed that Hayek had ‘no presence or impact’ in Chile. The second and final of these ‘relevant testimonies’ is Enrique Barros, a ‘prominent’ lawyer with a Ph.D. from Munich (an academic degree ‘rather uncommon’ at that time in Chile) who had read Hayek, returned to Chile in 1979, and confirmed, in private correspondence, that Hayek was then ‘only vaguely’ known in Chile and that Guzmán had ‘most probably’ not read him. In addition to Guzmán’s influence, the MPS had at least two members (Ibáñez and Cáceres) on Pinochet’s Council of State. According to Caldwell and Montes (2014a, 31; 2014b; 2015a, 287), in March 1979, Ibáñez presented a Memorandum to the Council with a number

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of provisions for the new Constitution. The President of the Council, Jorge Alessandri, ‘completely’ disagreed with it, and former President González Videla referred to the proposal as ‘totalitarian and fascist.’ In a subsequent interview, Cáceres claimed that the Memorandum was ‘inspired’ by Hayek’s Constitution of Liberty (1960) and Law, Legislation and Liberty, volume 3 (1979). In the Review of Austrian Economics version of their paper, Caldwell and Montes (2014a, 31; 2014b; 2015a, 287) continue: both Ibáñez and Cáceres ‘thought’ that they were ‘promoting Hayekian ideas. But they were not.’ The Ibáñez Memorandum proposed an autocratic government with ‘limited’ suffrage,’ and an alternative mechanism for Presidential elections. But for their more-informed Chilean audience they continued: although Ibanez and Caceres ‘promoted some Hayekian ideas, particularly the two-chambered ideas for two different purposes [emphasis added], they essentially deviated from Hayekian thought.’ The Memorandum proposed autocratic rule—limited suffrage for an autocratic government (Caldwell and Montes 2015b, 110).46 In the Review of Austrian Economics, Caldwell and Montes (2014a, 21–22; 2014b; 2015a, 279) state that there were ‘no’ translators when Hayek met Pinochet: Ibáñez, as Hayek’s host, played that role. Although Cáceres could remember ‘many details’ of Hayek’s trip, including stopping in Casablanca, at a restaurant famous for its chicken stew, when it came to the ‘details’ of Hayek’s meeting with General Pinochet, Cáceres had ‘much less’ to report: it was a ‘brief ’ twenty-minute affair, and ‘whatever was discussed (which he said he could not remember), he supposed [emphasis added] that it was nothing too substantive.’ Cáceres also noted the difficulty of intercourse when neither party knew the others’ language. For their Chilean audience this was changed: Caceres recalls that whatever had been discussed, due to language problems (there were no translators), it had been ‘nothing ­relevant’ (Caldwell and Montes 2015b, 98).47 Yet El Mercurio reported that Hayek said that he had talked to Pinochet about the issue of ‘limited democracy’ and representative government on which he had written a book in which he had argued that unlimited democracy ‘cannot work’ because it creates different forces that end up ‘destroying democracy.’ He also told reporters that Pinochet

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had ‘listened carefully’ and asked him for the material that he had written on the issue of limited democracy (cited by Caldwell and Montes 2014a, 22; 2014b; 2015a, 279). On his return to Germany, Hayek instructed Cubitt (2006, 19) to send Pinochet a copy of his chapter on ‘The Model Constitution’ from Law, Legislation and Liberty—in which the ‘two-chambered ideas for two different purposes’ is described. Hayek’s (1944, 1960) Road to Serfdom and Constitution of Liberty were Crozier’s (1979, 22) authoritative sources in The Minimum State: Beyond Party Politics; and the following year, Crozier (1993, 157) spent ‘several days closeted with the dictator [Pinochet]’ for whom ‘I had drafted in Spanish fifteen clauses’ for his ‘Constitution of Liberty’: ‘fourteen of them were in the final document.’ From the Chilean MPS meeting, Chamberlain (1982, 356) reported that by a lucky chance the head of the military that took over in 1973, General Augusto Pinochet, had a really open mind about economics. The story is that Pinochet holed up for a year with Professor Paul Samuelson’s Keynesian textbook, only to reject Samuelson for a blueprint presented by Friedman’s Chilean ‘Chicago boys’ … Fired by Friedman’s persuasiveness, an authoritarian government became the guarantor of what was soon to become the freest economy in all Latin America, if not the world.

In contrast, Caldwell and Montes (2014a, 21–22; 2014b; 2015a, 279) assert: it should ‘probably’ be ‘mentioned’ that Pinochet would ‘barely have known whom Hayek was,’ except that he had won the Nobel Prize in Economic Science who was ‘apparently supportive’ the Junta’s economic recovery plan. Chamberlain had known Hayek from at least the 1940s; Caldwell’s (2009, 319) only direct contact with Hayek revealed him to be a serial liar: ‘So much for going to the horse’s mouth for clarification!’ It appears that assertions made about ‘Hayek’—a fictional Randian hero—have the same epistemological status as assertions made for ‘free’ market outcomes. What did Caldwell (2010) gain by writing in the Washington Post that ‘Hayek himself disdained having his ideas attached to either party’?

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Three years after his second visit to Chile, Hayek (1984), in a Cato Policy Report ‘Exclusive Interview’ with James U. Blanchard III stated that ‘Many things in the last three years have moved very much better than I had hoped. Particularly in England, the fact that Mrs. Thatcher would be able to bring inflation down as well as she has done, and the same to some extent in America, is very encouraging. If you can bring down inflation to zero, and have it stay there, I think the position of the leading countries can be saved. I’m not sure that means the positions of their banks can be saved!’ When Blanchard stated: ‘I have been pleasantly surprised that Margaret Thatcher has accomplished as much as she has,’ Hayek replied: ‘And she sees why she hasn’t accomplished more. She has recently said, repeating my own criticism to her, that she has been much too slow.’ At the 1980 MPS meeting, Harris, Shenfield and Seldon ‘lent their full support’ to Mrs. Thatcher (Mont Pelerin Society Quarterly March 1980).48 Wayne Brough, a GMU graduate and employee of FreedomWorks a ‘Tea Party-friendly activist’ group, told The New York Times that his group’s goal is to ‘eventually fill Congress with Hayekians.’ And Caldwell ‘said he hoped that we were experiencing, partly through [Paul] Ryan’s ascendancy’ in the Republican Party, ‘the first stage of a slow but steady embrace of Hayek’s philosophy’ (cited by Davidson 2012). In addition to the U.S. Secretary of State (1953–1959), John Foster Dulles,49 Valéry Giscard d’Estaing,50 the Peruvian Minister of Finance, Don Pedro Beltram,51 the Belgian Minister of Foreign Trade and Jacques van Offelen,52 the MPS courted a variety of British Conservative Party politicians—including Enoch Powell,53 Sir Keith Joseph, Reginald Maudling,54 Geoffrey Howe,55 David Howell,56 William Proudfoot,57 Russell Lewis (Conservative Political Centre),58 Rhodes Boyson,59 John Biffen and Sir Peter Agnew.60 In 1973, Agnew, a devout Christian, received the Shah of Iran’s Order of Homayoun (Order of the Lion and the Sun), and was President of Habsburg’s European Documentation and Information Centre, and received the Orden del Mérito Civil (Order of Civic Merit) from General Franco. He was nominated for MPS membership in the same year as Habsburg nominated Jean Violet.61

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When the CBI demonstrated their alleged weakness in defense of ‘free’ enterprise by dismissing two members of their Taxation Committee (Chairman Alun Davies and Barry Bracewell-Milnes), Shenfield (16 February 1973) suggested to Arthur Kemp that they immediately be elected to the MPS before the next meeting.62 Hayek was determined to attach his ideas to political parties—describing the indirect route to Fisher: ‘Society’s course will be changed only by a change in ideas. First you must reach the intellectuals, the teachers and writers, with reasoned argument. It will be their influence on society which will prevail, and the politicians will follow’ (cited by Blundell 1990). At the 1959 MPS meeting, Hayek referred to ‘our’ representative on Eisenhower’s CEA.63 Burns (1953–1956), Paul McCracken (1969–1971), Greenspan (1974–1977), Murray Weidenbaum (1981–1982), Martin Feldstein (1982–1985) and Beryl Sprinkle (1985–1989)—all MPS members—were CEA Chairs64; McCracken was also a CEA member (1956–1959); Sprinkle was a member of Reagan’s Executive Office of the President; and another MPS member, Neil J. Jacoby (1953–1955), also sat on the CEA.65 The Mont Pelerin Society Quarterly (July 1959; October 1960) reported that founding member Brandt had been appointed to the CEA; and CEA member (1959–1961) Henry Wallich, had been elected to the Society.66 Wallich later served as a Governor of the Federal Reserve (1974–1986). For reasons of institutional loyalty, the Bretton Woods international ‘Princes’ inadequately understood the fixed exchange rate system that they policed (Leeson 2003). Between 1970 and 2006, two MPS Chairmen of the Federal Reserve exerted a profound influence over the international economy: Burns (1970–1978) and Greenspan (1987–2006).67 Friedman nominated Greenspan as a guest at the 1980 MPS meeting.68 At Burns’ memorial service, Friedman (no date but presumably 1987) diplomatically stated that those who followed him to the podium were ‘better ­qualified than I’ to speak about Burns’ tenure at the Fed. But when asked in conversation about the causes (plural) of the Great Inflation of the 1970s, he would snap back (in the singular): ‘Arthur Burns.’ Hannes Gissurarson (16 June 1999) told Liggio that ‘all’ was fine in Iceland and that his friend had just won a third term as Prime Minister. The economy had been ‘liberalized’ over the previous eight years. Liggio gave him $2000 to attend the MPS meeting in Bali. Liggio (20 June 1999)

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told Feulner that Gissurarson was the MPS’s ‘undercover agent’ in setting up public policy research institutes—in Hong Kong, south east Asia and as an ‘undercover Malay’ in the Philippines.69 In 2004, the MPS met in Iceland to be given ‘an account’ by Prime Minister Davíð Oddsson (1991–2004) of the ‘transformation of the Icelandic economy under his leadership, including stabilization, liberalization, privatization, deregulation, and tax reduction’ (Gissurarson 2005). Oddsson was also Chair of the Board of Governors of the Central Bank of Iceland (2005–2008). Mishkin was paid $124,000 by the Icelandic Chamber of Commerce to co-write with ‘Dr Tryggvi Herbertsson’ (2006) a report on ‘Financial Stability in Iceland’ which concluded that: ‘Our analysis indicates that the sources of financial instability that triggered financial crises in emerging market countries in recent years are just not present in Iceland, so that comparisons of Iceland with emerging market countries are misguided.’ The Chamber of Commerce then noted that President George W. Bush has nominated Mishkin to the Federal Reserve Board: ‘We are very happy to see Mishkin take this new position and wish him all the best,’ says Halla Tomasdottir, the managing director of the Iceland Chamber of Commerce. ‘We believe that this will lend even more weight to the report.’70

In 2008, the Icelandic banking system collapsed which led to a severe economic depression and the ‘Kitchenware’ or ‘Pots and Pans’ revolt. According to the ‘Inside Job’ documentary, Mishkin’s CV was changed so that the title of the report became ‘Financial Instability in Iceland.’71 In 2008, the US banking and credit system almost collapsed—and, to his credit, the somewhat mystified MPS President Lal (2009) ruminated about how the GFC could have happened on the watch of supposedly classical liberals … what went wrong when ‘our side’ as it were - was in charge.

Three years previously, Lal (2006) had made The Case for Classical Liberalism in the Twenty-First Century. Hayek explained to the 1959 MPS meeting that there had to be a ‘hierarchy’ of ideas—his recruits

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must be able to adequately ‘translate’ his ideas to the public and so must understand what ‘we’ claim to be able to provide.72 Along with Mises, Rothbard and Rand, Hayek co-created the MPS (and Greenspan’s) ‘ideology.’ Having written for the IEA The Poverty of ‘Development Economics’ (2002), Lal (2009) now worried about the poverty of ‘free’ market ­religion. But he also asserted that Hayek wished the MPS to be a ‘scholarly society’ not ‘congregatio de propaganda fide ’ (the Roman Catholic Sacred Congregation for the Propagation of the Faith). According to the MPS formal Statement of Aims: ‘The group does not aspire to conduct propaganda.’73 Yet as MPS member Harland Shaw (of the Conference of American Small Business) insisted to Hunold (1 April 1960): the ‘central’ object of free market advocates is to ‘advocate.’ The choice lay between ‘we submit’ or subordinating ‘formalities’ to ‘effective’ advocacy.74 In promoting The Divine Right of the ‘Free’ Market (Leeson 2017b), Davenport (1985, 8) hoped that a ‘synthesis of new and old may well come, restoring, if not God in his Heaven, at least faith in the m ­ ystery and reality of the many-colored world around us from which s­cientist, artist, and theologian make their start. When that breakthrough comes, it will outrank in importance the discoveries of Copernicus and Galileo.’ Meantime, it appeared that the component parts of the coming fusion, ‘libertarian and Classicist, modern secularist and religious believer, face a considerable task in the immediate future: to honor Adam Smith’s invisible hand as against the mailed fist of the tyrant; to reaffirm the dignity and indeed the sanctity of the individual person; to hold the barbarians, who have said they come to bury us, at the gate and so preserve what Winston Churchill in a dark hour defended in the name of Western Christian Civilization.’ To promote the ‘free’ market, Davenport uncritically consumed a vast amount of government propaganda. ‘This Is Rhodesia’ began with ‘solemn’ words from Ian Smith: ‘We have struck a blow for the preservation of justice, civilization, and Christianity, and in the spirit of this belief we have this day assumed our sovereign independence. God bless you all’ (Chapter 4, above).

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According to the 1904 Census, there were 11,032 ‘European or White’ inhabitants in a Southern Rhodesian population of 606,704.75 In the 1890s, the British South Africa Company conquered what became known as Southern Rhodesia (and from 1964, Rhodesia) with the help of 3000 white soldiers (who were paid with land grants of 1200 hectares). But according to ‘This Is Rhodesia,’ the ‘estimated African population of that time was about 300,000 at most’—a ‘comparative handful of tribesmen.’ In this ‘savage untamed wilderness,’ the whites encountered ‘primitive ignorance.’ But the twentieth century ‘March of civilisation’ allowed the African population to rise to 4 million. Davenport scrawled a big tick alongside this white supremacist government propaganda.76 Hayek was Davenport’s (1985, 5) authority: ‘it turns out that the market itself, to be efficient, is dependent on a whole matrix of customs, laws, and moral convictions as to what is right and what is wrong.’ Hayek ‘pays tribute to the family as the means by which one generation passes on its experience and values to the next. Finally he has a good word to say for plain old-fashioned honesty, and one is glad to hear it mentioned. I call up my broker to buy or sell General Motors. He executes the order with no more than the sound of my voice as security. True, if either of us proved dishonest, legal action could be taken. But if we had to wait for the courts to decide such issues it is fair to say that the New York Stock Exchange would close down tomorrow and our intricate banking and credit system would collapse as well.’ Epstein (2000), the ‘Austrian Watchdog’ (Economics Editor) at Barron’s and former Chief Economist for the New York Stock Exchange, ‘experienced one eureka moment after another’ by reading Rothbard: ‘So I think of Rothbard as having been Plato to Mises’s Socrates.’ Whenever Epstein (2011) thought about economics outside formal straitjackets, I naturally fell back on modes of reasoning used by Rothbard and his mentor, Ludwig von Mises. That’s why the very term ‘Austrian economics’ is a kind of redundancy. Whenever people think sensibly about economics, they think like Austrians — one key reason why even the mainstream can have a few things to teach us, especially when they’re writing mere journalism.

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And in The Wall Street Journal, Mark Spitznagel (2009)—Ron Paul’s senior economic adviser and author of The Dao of Capital: Austrian Investing in a Distorted World (2013)—opined about ‘The Man Who Predicted the Depression: Ludwig von Mises explained how government-induced credit expansions led to imbalances in the economy.’ According to Spitznagel, ‘Ludwig von Mises was snubbed by economists world-wide as he warned of a credit crisis in the 1920s. We ignore the great Austrian at our peril today. Mises’s ideas on business cycles were spelled out in his 1912 tome “Theorie des Geldes und der Umlaufsmittel” (‘The Theory of Money and Credit’). Not surprisingly few people noticed, as it was published only in German and wasn’t exactly a beach read at that.’ One of those who did embrace it—or at least a popularized (that is, most likely journalistic) version—was Adolf Hitler (Leeson 2018).

Notes 1. The British-born Coase (1910–2013) lived in the US for the last 62 years of his life. 2. http://www.nobelprize.org/nobel_prizes/economic-sciences/laureates/1997/press.html. 3. http://www.presidency.ucsb.edu/ws/index.php?pid=56922#axzz1aV0pqgub. 4. https://www.federalreserve.gov/monetarypolicy/files/FOMC20051213 meeting.pdf. 5. http://www.presidency.ucsb.edu/ws/?pid=20239. 6. https://www.cbsnews.com/news/glenn-beck-obama-is-a-racist/. 7. https://2015.freedomfest.com/program/. 8. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 9. Friedrich Hayek, interviewed by Earlene Craver date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 10. Friedrich Hayek, interviewed by Jack High date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/).

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11. Friedrich Hayek, interviewed by Axel Leijonhufvud date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 12. The others were Menger, Böhm-Bawerk, Kirzner, Lachmann, Armen Alchian, Buchanan, Coase, and Harold Demsetz. 13. Friedrich Hayek, interviewed by Earlene Craver date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 14. https://freethepeople.org/about/. 15. https://www.charleskochinstitute.org/freedom-rising-cki-goesfreedomfest/. 16. http://www.cfact.org/2011/11/16/946/. 17. http://heartland.org/leon-louw. 18. http://www.whoswho.co.za/leon-louw-3162. 19. http://www.myvirtualpaper.com/doc/brookepattrick/water_sewage_ and_effluent_september2011/2011090201/5.html#4. 20. http://thehayekprophecies.com/. 21. http://neprimer.com/ePress/articles/2008/5000YearLeapFreedom101.html. 22. ‘Even though Hayek himself disdained having his ideas attached to either party, he nonetheless provided arguments about the dangers of the unbridled growth of government’ (Caldwell 2010). 23. MPS Archives Box 101. 24. MPS Archives Box 84. 25. MPS Archives Box 82. 26. MPS Archives Box 100. 27. MPS Archives Box 79. 28. MPS Archives Box 82. 29. MPS Archives Box 78. 30. MPS Archives Box 85. 31. MPS Archives Box 85. 32. MPS Archives Box 85. 33. MPS Archives Box 84. 34. MPS Archives Box 82. 35. To James Buchanan. MPS Archives Box 74. 36. MPS Archives Box 86. 37. Friedrich Hayek, interviewed by Earlene Craver date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/).

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38. http://edition.cnn.com/2017/08/16/politics/joint-chiefs-charlottesville-racism/index.html. 39. Friedrich Hayek, interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 40. Friedrich Hayek, interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http:// oralhistory.library.ucla.edu/). 41. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 42. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 43. http://www.margaretthatcher.org/document/117179. 44. http://www.margaretthatcher.org/document/117135. 45. https://coreyrobin.files.wordpress.com/2012/07/hayek-letter-to-thetimes-july-11-1978.pdf. 46. ‘Aunque Ibáñez y Cáceres promovieron algunas ideas hayekianas, en particular la de dos cámaras con dos propósitos diferentes, en lo fundamental se desvían del pensamiento hayekiano. En resumen, el memorándum finalmente proponía el sufragio limitado para un gobierno autocrático.’ 47. ‘Cáceres recuerda poco de la reunión de Pinochet con Hayek, excepto que fue un encuentro breve, de unos veinte minutos, y que lo que se hubiera discutido, debido a los problemas de idioma (no había traductores), no había sido nada relevante.’ 48. MPS Archives Box 67. 49. Hunold (10 November 1958) to Dulles. MPS Archives Box 40.4. 50. MPS Archives Box 41.10. 51. Röpke (10 October 1960) to Beltram. MPS Archives Box 42.3. 52. Hunold (10 October 1960) to Offelen. MPS Archives Box 42.4. 53. Powell was elected in 1969 and resigned in 1980. MPS Archives Boxes 66 and 44.2. 54. Jewkes (25 January 1960) to Hunold. MPS Archives Box 41.6. 55. MPS Archives Box 66. 56. MPS Archives Box 45.5. 57. MPS Archives Box 52.2. 58. MPS Archives Box 53.3.

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9. MPS Archives Box 66. 5 60. MPS Archives Box 41.11. 61. MPS Archives Box 55.5. 62. MPS Archives Box 52.3. 63. Davenport Archives Box 23.9. 64. McCracken joined the MPS in 1968. 65. MPS Archives Box 44.1. 66. MPS Archives Box 3.5. 67. When he joined the Nixon Administration, Burns let his MPS membership temporarily lapse. He later rejoined. 1983 MPS Members Directory. Davenport Archives Box 23.3. 68. MPS Archives Box 53.8. 69. MPS Archives Box 130. 70. http://www.iceland.is/iceland-abroad/us/nyc/news-and-events/ prof–mishkin-the-author-of-financial-stability-in-iceland-nominated-by-president-bush-to-the-federal-reserve-board/6927/. 71. https://www.youtube.com/watch?v=5msVl3oZl4U. 72. Davenport Archives Box 23.9. 73. https://www.montpelerin.org/statement-of-aims/. 74. MPS Archives Box 41.8. 75. https://archive.org/stream/cu31924030396067#page/n243/mode/2up. 76. Davenport Archives Box 44.10.

References Archival Insights into the Evolution of Economics (and Related Projects) Haiduk, K. (2015). Hayek and Coase Travel East: Privatization and the Experience of Post-Socialist Economic Transformation. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part VI Good Dictators, Sovereign Producers and Hayek’s ‘Ruthless Consistency’. Basingstoke: Palgrave Macmillan. Leeson, R. (2003). Ideology and the International Economy: The Decline and Fall of Bretton Woods. Basingstoke: Palgrave Macmillan. Leeson, R. (2005, August 19). Assessing the Effect of Taxes on the Economy: Deflate Housing Bubble with Targeted Taxes. San Francisco Chronicle. http://www.sfgate.com/default/article/Assessing-the-Effect-of-Taxes-on-theEconomy-2646541.php.

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Leeson, R. (Ed.). (2015). Hayek: A Collaborative Biography Part III Fraud, Fascism and Free Market Religion. Basingstoke: Palgrave Macmillan. Leeson, R. (2017a). Hayek: A Collaborative Biography Part VII ‘Market Free Play with an Audience’: Hayek’s Encounters with Fifty Knowledge Communities. Basingstoke: Palgrave Macmillan. Leeson, R. (2017b). Hayek: A Collaborative Biography Part IX the Divine Right of the ‘Free Market. Basingstoke: Palgrave Macmillan. Leeson, R. (2018). Hayek: A Collaborative Biography Part VIII the Constitution of Liberty: ‘Shooting in Cold Blood’ Hayek’s Plan for the Future of Democracy. Basingstoke: Palgrave Macmillan. Robin, C. (2015). Wealth and the Intellectuals: Nietzsche, Hayek, and the Austrian School of Economics. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part V Hayek’s Great Society of Free Men. Basingstoke: Palgrave Macmillan.

Other References Armey, D., & Kibbe, M. (2010). Give Us Liberty: A Tea Party Manifesto. New York: HarperCollins. Beck, G. (2009 [1981]). Foreword. In W. C. Skousen (Ed.), Five Thousand Year Leap: Twenty-Eight Great Ideas That Are Changing the World. Washington, DC: The National Center for Constitutional Studies. Blinder, A. S., & Reis, R. (2005). Understanding the Greenspan Standard (Working Paper No. 114). CEPS. https://www.princeton.edu/ceps/workingpapers/114blinderreis.pdf. Blundell, J. (1990). Waging the War of Ideas: Why There Are No Shortcuts. (Reprinted from the Heritage Foundation Lecture Series: Heritage Lecture #254 June 1). https://www.atlasnetwork.org/assets/uploads/misc/chapter-2-waging-the-war-of-ideas-blundell-march-20-2007-final.pdf. Boettke, P. J. (1992, August 1). Friedrich A. Hayek (1899–1992). FEE. https:// fee.org/articles/friedrich-a-hayek-1899-1992/. Boettke, P. J. (1995, May 1). The Story of a Movement: A Review Essay of Vaughn’s Austrian Economics in America. The Freeman, pp. 322–326. https://fee.org/articles/the-story-of-a-movement/. Boettke, P. J. (2001). Calculation and Coordination Essays on Socialism and Transitional Political Economy. London: Routledge. Boettke, P. J. (2007). Boettke on Austrian Economics. EconTalk Episode with Pete Boettke Hosted by Russ Roberts. http://www.econtalk.org/archives/2007/12/ boettke_on_aust.html.

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Boettke, P. J. (2011a, August 28). Mises Wins the Nobel Prize, Well Sort of … Coordination Problem. http://www.coordinationproblem.org/2011/08/mises-wins-the-nobel-prize-in-economic-science-well-sort-of-.html. Boettke, P. J. (2011b). Teaching Austrian Economics to Graduate Students. Journal of Economics and Finance Education, 10(2), 19–30. http://www. economics-finance.org/jefe/econ/special-issue/Special%20Issue%20AE%20 003%20Boettke-Abstract.pdf. Bump, P. (2016, January 29). In 1927, Donald Trump’s Father Was Arrested After a Klan Riot in Queens. The Washington Post. https://www.washingtonpost.com/news/the-fix/wp/2016/02/28/in-1927-donald-trumps-father-wasarrested-after-a-klan-riot-in-queens/?utm_term=.8e701522912f. Caldwell, B. (1995). Editorial Notes. In B. Caldwell (Ed.), Contra Keynes and Cambridge. The Collected Works of F. A. Hayek. Chicago: University of Chicago Press. Caldwell, B. (2006). Popper and Hayek: Who Influenced Whom? In I. C. Jarvie, K. Milford, & D. W. Miller (Eds.), Karl Popper: A Centenary Assessment (Vol. I, pp. 111–124). Burlington: Ashgate. Caldwell, B. (2009). A Skirmish in the Popper Wars: Hutchison Versus Caldwell on Hayek, Popper, Mises, and Methodology. Journal of Economic Methodology, 16(3), 315–324. http://www.tandfonline.com/doi/pdf/10.1080/13501780903129306. Caldwell, B. (2010). The Secret Behind the Hot Sales of ‘The Road to Serfdom’ by Free-Market Economist F. A. Hayek. The Washington Post. http://voices.washingtonpost.com/shortstack/2010/02/the_secret_behind_ the_hot_sale.html. Caldwell, B., & Montes, L. (2014a, August). Friedrich Hayek and His Visits to Chile (CHOPE Working Paper No. 2014–12). Caldwell, B., & Montes, L. (2014b, September 26). Friedrich Hayek and His Visits to Chile. Review of Austrian Economics. First online. Caldwell, B., & Montes, L. (2015a, September). Friedrich Hayek and His Visits to Chile. Review of Austrian Economics, 28(3), 261–309. Caldwell, B., & Montes, L. (2015b). Friedrich Hayek y Sus Dos Visitas a Chile. Estudios Públicos, 137(Verano), 87–132. https://www.cepchile.cl/ cep/site/artic/20160304/asocfile/20160304101209/rev137_BCaldwellLMontes.pdf. Chamberlain, J. (1982, January 9). ‘Reaganism’ Is a Success in Chile. Human Events. MPS Archives Box 45.7. Chirac, J. (1985, June). Speech Presented by Monsieur Jacques Chirac, Mayor of Paris, on the Occasion of the Regional Conference of the Mont Pelerin Society and the awarding of the Great Medal of Paris to Professor Friedrich

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A. Hayek, Winner of the Nobel Prize for Economic Science. Mont Pelerin Society Newsletter. MPS Archives Box 81. Crozier, B. (1979). The Minimum State: Beyond Party Politics. London: Hamish Hamilton. Crozier, B. (1993). Free Agent the Unseen War 1941–1991. London: HarperCollins. Cubitt, C. (2006). A Life of August von Hayek. Bedford, England: Authors on line. Davenport, J. (1985, January). Beyond the Market. The Freeman, 35(1), 4–8. https://fee.org/media/16292/1985-01.pdf. Davidson, A. (2012, August 21). Prime Time for Paul Ryan’s Guru (the One Who’s Not Ayn Rand). The New York Times. http://www.nytimes. com/2012/08/26/magazine/prime-time-for-paul-ryans-guru-the-one-thatsnot-ayn-rand.html. Ebeling, R. M. (1997, August). The Free Market and the Interventionist State. Imprimus, 26(8). MPS Archives Box 122. Ebeling, R. M. (2011, August 28). Mises Wins the Nobel Prize, Well Sort of … Coordination Problem. http://www.coordinationproblem.org/2011/08/ mises-wins-the-nobel-prize-in-economic-science-well-sort-of-.html. Ebeling, R. M. (2014, February 16). EXCLUSIVE INTERVIEW, Gold & Silver. Richard Ebeling on Austrian Economics, Economic Freedom and the Trends of the Future. Daily Bell. http://www.thedailybell.com/gold-silver/ anthony-wile-richard-ebeling-on-austrian-economics-economic-freedomand-the-trends-of-the-future/. Ebeling, R. M. (2017, October 2). Classical Liberalism and the Problem of ‘Race’ in America. Future of Freedom Foundation. https://www.fff.org/ explore-freedom/article/classical-liberalism-problem-race-america/. Epstein, G. (2000). Austrian Watchdog at Barron’s: An Interview with Gene Epstein. Austrian Economic Newsletter, 22(Summer). https://mises.org/ library/austrian-watchdog-barrons-interview-gene-epstein. Epstein, G. (2011, April 7). Murray, My Intellectual Mentor. Mises Daily. https://mises.org/library/murray-my-intellectual-mentor. Evans, A. (2010). The Parallels Between Sports Coaching and Graduate Teaching: Coach Boettke as Exemplar. The Journal of Private Enterprise, 26(1), 73–83. Financial Times. (2007, September 17). Greenspan Alert on US House Prices. Fisher, R. (1986, July 21). Moscow’s Strategy in Southern Africa: A Country by Country Review. Heritage Foundation. www.heritage.org/europe/report/ moscows-strategy-southern-africa-country-country-review.

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Gissurarson, H. (2005). Some Highlights of MPS Regional Meeting, Reykjavik, Iceland, 21–24 August 2004. Mont Pelerin Society Newsletter, LIX(Fall). Hayek, F. A. (1944). The Road to Serfdom. London: Routledge. Hayek, F. A. (1960). The Constitution of Liberty. Chicago: University of Chicago Press. Hayek, F. A. (1975). A Discussion with Friedrich von Hayek. Washington, DC: American Enterprise Institute. https://www.aei.org/wp-content/uploads/ 2017/03/Discussion-with-Friedrich-von-Hayek-text.pdf. Hayek, F. A. (1978a). Oral History Interviews. Los Angeles: Centre for Oral History Research, University of California. http://oralhistory.library.ucla.edu/. Hayek, F. A. (1978b). New Studies in Philosophy, Politics, Economics and the History of Ideas. London: Routledge & Kegan Paul. Hayek, F. A. (1979). Law, Legislation and Liberty: Volume III the Political Order of a Free People. Chicago: University of Chicago Press. Hayek, F. A. (1984, May–June). Exclusive Interview with F. A. Hayek. Cato Policy Report. https://www.cato.org/policy-report/mayjune-1984/exclusiveinterview-fa-hayek. Hayek, F. A. (1985, June). Professor Friedrich Hayek’s Closing Speech. Mont Pelerin Society Newsletter. MPS Archives Box 67. Hayek, F. A. (1992 [1977], July). The Road from Serfdom. Reason. http://reason.com/archives/1992/07/01/the-road-from-serfdom/5. Hayek, F. A. (1994). Hayek on Hayek an Autobiographical Dialogue. Supplement to the Collected Works of F. A. Hayek (S. Kresge & L. Wenar, Eds.). Chicago: University of Chicago Press. Hayek, F. A. (1995). Contra Keynes and Cambridge the Collected Works of F. A. Hayek (B. Caldwell, Ed.). Chicago: University of Chicago Press. Hayek, F. A. (2007 [1944]). The Road to Serfdom: The Definitive Edition. The Collected Works of F. A. Hayek (B. Caldwell, Ed.). Chicago: University of Chicago Press. Keynes, J. M. (1936). General Theory of Employment, Interest and Money. New York and London: Harcourt, Brace. Lal, D. (2002). The Poverty of ‘Development Economics’ (2nd ed.). London: Institute of Economic Affairs. Lal, D. (2006). Reviving the Invisible Hand: The Case for Classical Liberalism in the Twenty-First Century. Princeton: Princeton University Press. Lal, D. (2009). The Mont Pelerin Society: A Mandate Renewed. Mont Pelerin Society Presidential Address. http://www.econ.ucla.edu/lal/MPS%20Presidential%20 Address%203.5.09.pdf.

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Leube, K. R. (2003a). Some Remarks on Hayek’s The Sensory Order. Laissez Faire, 12–22. http://laissezfaire.ufm.edu/images/7/79/Laissezfaire18_2.pdf. Leube, K. R. (2003b). On Some Unintended Consequences of the Welfare State (Free Market Foundation Occasional Papers 4.4). Major, B. (2017, November 7). Hayek’s Economics Society Enters the Digital Era with a Bang. Peter Boetke Brings a Fresh Perspective and Wide Range of Talent to the Prestigious Mont Pelerin Society, an Economic Powerhouse Among the Intelligentsia. The Federalist. https://thefederalist. com/2016/11/07/hayeks-economics-society-enters-digital-era-bang/. Martin, A. (2010, September). The Analects of Boettke. Journal of Private Enterprise, 26(1), 125–141. Mises, L. (1985 [1927]). Liberalism in the Classical Tradition (R. Raico, Trans.). Auburn, AL: Mises Institute. Mises, L. (2009/1978 [1940]). Memoirs. Auburn, AL: Ludwig von Mises Institute. Mises, L. (2013/1978 [1940]). Notes and Recollections with the Historical Setting of the Austrian School of Economics. Indianapolis, IN: Liberty Fund. Nasar, S. (1992, March 24). Friedrich von Hayek Dies at 92; An Early Free-Market Economist. The New York Times. http://www.nytimes. com/1992/03/24/world/friedrich-von-hayek-dies-at-92-an-early-free-market-economist.html. O’Brien, P. J. (1985). Authoritarianism and the New Economic Orthodoxy the Political Economy of the Chilean Regime, 1973–85. In P. J. O’Brien & P. A. Cammack (Eds.), Generals in Retreat: The Crisis of Military Rule in Latin America. Manchester: Manchester University Press. Peterson, W. H. (2009). Mises in America. Auburn, AL: Ludwig von Mises Institute. Popper, K. R. (1945a). The Open Society and Its Enemies Volume 1 the Spell of Plato. London: Routledge. Popper, K. R. (1945b). The Open Society and Its Enemies Volume 1 the High Tide of Prophecy: Hegel, Marx, and the Aftermath. London: Routledge. Popper, K. R. (1959). Logic of Scientific Discovery. London: Hutchinson. Robin, C. (2014). The Hayek-Pinochet Connection: A Second Reply to My Critics. http://crookedtimber.org/2013/06/25/the-hayek-pinochet-connectiona-second-reply-to-my-critics/. Rothbard, M. N. (1993, August). Who Are the Terrorists? (Rothbard Rockwell Report). Vol 4.8. http://www.unz.org/Pub/Rothbard RockwellReport-1993aug-00001.

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Rothbard, M. N. (1994a, September). Invade the World (Rothbard Rockwell Report). Vol 5.9. http://www.unz.org/Pub/RothbardRockwell Report-1994sep-00001. Rothbard, M. N. (1994b, July). The Franciscan a Review of Samuel Francis, Beautiful Losers Essays on the Failure of American Conservatism (Rothbard Rockwell Report), pp. 11–24. http://www.unz.org/Pub/ RothbardRockwellReport-1994jul-00011. Rothbard, M. N. (2011). Economic Controversies. Auburn, AL: Ludwig von Mises Institute. Salerno, J. (1996). Why We Are Winning an Interview with Joseph Salerno. Austrian Economic Newsletter, 16(3), 1–8. https://mises.org/library/why-werewinning-interview-joseph-t-salerno. Skousen, M. (2009a, March 19). Glenn Beck Re-Energizes the Conservative Movement. Human Events. http://humanevents.com/2009/03/19/glenn-beckreenergizes-the-conservative-movement/. Skousen, W. C. (2009b [1981]). Five Thousand Year Leap: Twenty-Eight Great Ideas that are Changing the World. Malta, ID: National Center for Constitutional Studies. Spargo, C. (2015, September 11). Donald Trump Hits Back As He Faces Claims His Father Was Arrested When Anti-Catholic Ku Klux Klansmen Attacked Police in New York in 1927 and Says: ‘It Never Happened.’ Daily Mail. Spitznagel, M. (2009, November 6). The Man Who Predicted the Depression. The Wall Street Journal. Spitznagel, M. (2013). The Dao of Capital: Austrian Investing in a Distorted World. New York: Wiley. Zaitchik, A. (2009, September 16). Meet the Man Who Changed Glenn Beck’s Life Cleon Skousen Was a Right-Wing Crank Whom Even Conservatives Despised. Then Beck Discovered Him. Salon. https://web. archive.org/web/20090922170353/http://www.salon.com/news/feature/2009/09/16/beck_skousen/print.html.

7 The Sovietization of American Universities: ‘Intellectual Orgies’ and ‘the “Nonconcept” of Education’

1 The ‘Free and Humane’ Market for Tobacco, Financial Crises and Labour Rockwell (1990) complained about ‘hectoring state anti-drinking signs in our restaurants and an expensive and intrusive state ­ advertising campaign against smoking.’ This was a philosophical—not a public health—issue: ‘the very notion of state behavioral advertising is chilling. (Although I wouldn’t mind trying anti-bribe ads in Sacramento.)’ While government was ‘dumb, dirty, dangerous’: At least the tobacco industry works through persuasion. The state of California gets its money, and its way, at the point of a gun. Give me Virginia Slims over the tax man any day.

Rockwell was referring to a brand of cigarette manufactured by Altria (formerly Phillip Morris Companies) which was marketed to young women using slogans such as ‘You’ve come a long way, baby,’ ‘It’s a woman thing’ and ‘Find your voice’—which according to the Surgeon General of the United States sought to link smoking to ‘women’s © The Author(s) 2018 R. Leeson, Hayek: A Collaborative Biography, Archival Insights into the Evolution of Economics, https://doi.org/10.1007/978-3-319-77428-2_7

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freedom, emancipation, and empowerment,’ and was associated with a rapid rise in smoking among girls aged 14–17 years.1 Prior to establishing the Mises Institute, Rockwell was editor of Private Practice (January 1979–October 1981), Executive Director of the Congress of County Medical Societies, and ‘direct mail fundraiser’ for both the Private Medical Care Foundation and Ron Paul’s ‘foundation.’2 Researchers from the University of California, San Francisco, report that starting in the 1980s, tobacco companies worked to ‘create the appearance of broad opposition to tobacco control policies by attempting to create a grassroots smokers’ rights movement. Simultaneously, they funded and worked through third-party groups,’ such as Citizens for a Sound Economy (CSE), Americans For Prosperity (AFP) and FreedomWorks, to ‘accomplish their economic and political agenda. There has been continuity of some key players, strategies and messages from these groups to Tea Party organisations’ (Fallin et al. 2013). CSE (1984–2004), AFP (2004–) and FreedomWorks (2004–) were established by the major funders of Austrian economics, Charles and David Koch of Koch Industries; and Ron Paul was CSE’s first chairman. If ‘grassroots’ is, in reality, funded ‘astroturf ’: are lobbyists masquerading as Austrian ‘scholars’? Trump’s pick as Health and Human Services (HHS) Secretary, Dr. Tom Price (an orthopaedic surgeon for nearly 20 years) had opposed the 2009 Family Smoking Prevention and Tobacco Control Act, which required the Food and Drug Administration to regulate tobacco as a drug.3 Along with Ron and Rand Paul, Price was a member of the Association of American Physicians and Surgeons, an ‘ultra-right-wing … political-economic rather than a medical group,’ which was led by members of the John Birch Society (New York Times 1966). It was founded in 1943 to ‘fight socialized medicine and to fight the government takeover of medicine’—they opposed the creation of Medicaid and Medicare and favour a ‘free market’ approach to medicine (Meier 2011). Price participated in AFP press conferences4 and was a stickler for fiscal rectitude—opposing expenditure on jet travel for government officials as ‘fiscal irresponsibility run amok.’ Price became the shortest-serving HHS Secretary after it was revealed that he had spent

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hundreds of thousands of tax-payer dollars on private jets when cheaper public flights were available.5 The Heartland Institute asserts that the ‘risks’ of smoking are ‘exaggerated by the public health community to justify their calls for more regulations on businesses and higher taxes on smokers, and that the risk of adverse health effects from second-hand smoke is dramatically less than for active smoking, with many studies finding no adverse health effects at all. These positions are supported by many prominent scientists and virtually all free-market [emphasis added] think tanks.’6 According to the Heartland Institute, Ebeling is the ‘BB&T Distinguished Professor of Ethics and Free Enterprise Leadership at The Citadel’: He conducts courses such as ‘Leadership, Entrepreneurship, and Capitalist Ethics’ as well as ‘The Morality and Economics of Capitalist Society.’7

With GMU’s James Bennett and Dan Heldman, Manuel Johnson wrote the Fisher Institute’s Deregulating Labor Relations (1981) which ‘conservatively estimated the social cost of labor sector regulation to be at least $170 billion per year. That works out to be about $2000 for each civilian employee in the U.S. economy’ ($5595 in 2017 dollars). Davenport (1983) welcomed the ‘growing consensus that the American economy will gain as we lift strangling governmental regulations from industry as in the case of oil and transportation’; noting: But just below the surface, students of the business scene are beginning to ask a more far-reaching question. If deregulation is good for business, why should it not be extended to the biggest and most important market in the country, namely the labor market which today is cluttered up by minimum wage laws, over-elaborate safety and health rules, and the laws affecting so- called collective bargaining? Says Manuel Johnson, Assistant Secretary of the Treasury, ‘Maybe here is an idea whose time has come.’

Johnson, GMU’s Koch Professor in International Economics, was Reagan’s Deputy Assistant Secretary (1981–1982), Assistant Secretary of

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the Treasury (1982–1986), and Vice Chair of the Board of Governors of the Federal Reserve System (1986–1990). Bennett and Johnson (1981) authored Better Government at Half the Price: Private Production of Public Services. Another Reagan appointee to the Board of Governors was Vice-Chair Preston Martin (1982–1986), who had previously been Chair of the Federal Home Loan Bank Board, a government agency providing financing to savings and loans, and was California’s top savings and loan regulator when Reagan was the state’s governor.8 Wayne Angel (another Reagan appointee as Fed Governor, 1986–1994) left to become a Chief Economist and Senior Managing Director for Bear Sterns & Co., Inc. (1994–2002); another was H. Robert Heller who championed giving investment banking powers to commercial banks; and who later joined VISA International in 1989 as Executive Vice President in charge of global finance, audit and risk management. In December 1986, the Federal Reserve began to reinterpret Section 20 of the 1933 Glass-Steagall Act, which barred commercial banks from being ‘engaged principally’ in securities business: henceforth, banks could do ‘small’ amounts of underwriting, so long as it did not become a large portion of revenue. In spring 1987, the Federal Reserve Board of Governors voted 3-2 in favour of easing regulations under Glass-Steagall Act (overriding Volcker’s opposition). The vote came the Governors had heard presentations from Citicorp, J.P. Morgan and Bankers Trust advocating ‘freeing-up’ the shackles of Glass-Steagall to allow banks to handle underwriting businesses. Two cultures appeared to compete for influence—a ‘culture of risk’ (the securities business) against a ‘culture of protection of deposits’ (the ‘old fashioned’ banking model). In August 1987, Greenspan—formerly a director of J.P. Morgan—became Chair of the Federal Reserve. To avoid (future) social costs (e.g. a repeat of the Great Depression), regulation imposes (current) private costs on banks. But a country can gain a short-run competitive advantage by deregulating its financial sector—as Britain did with its 1986 ‘Big Bang.’ One reason Greenspan favoured greater deregulation was on nationalistic grounds: to help American banks compete with big foreign institutions. Economists are aware that ‘fooling’ has, at best, a limited shelf-life: time inconsistency leads to the loss of policy credibility. Likewise,

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tobacco smokers report that in the long-run, they hope to quit. To illustrate the power of consumer sovereignty, tobacco companies intentionally marketed an addictive product. With GMU’s DiLorenzo, Bennett promoted the ‘free’ market in tobacco. According to DiLorenzo (1999), a Heartland Institute ‘expert,’9 The state is always in league with an intellectual class to provide cover for its misdeeds, and the public-health movement is only the latest. Using this cover, the state and the courts are targeting developed industries tobacco and gun manufacturers, for example and extorting them with litigation. They have even begun to drop the pretense; it is open robbery.

David Keyston, a ‘life long Christian Scientist’ with a ‘deep and abiding love of God,’ was—after ‘daily reading his Wall Street Journal’—‘always willing to discuss ways to restore America.’10 In 1990, Keyston nominated Roy Marden of the Heartland Institute and the Philip Morris tobacco company for MPS membership.11 In 1994, the top executives of the seven largest American tobacco companies testified under oath that they ‘did not believe that cigarettes were addictive’ (Hilts 1994). DiLorenzo (1999) was outraged: the tobacco industry would have to ‘move overseas. What choice does it have at this point? It has been so thoroughly demonized which is always the first step in destroying something that there can be no future in it, absent a radical political change.’ DiLorenzo (1999) promoted ‘free’ market ‘honesty’ and optimism: The left has become a caricature of itself, so much so that I really think there is a chance for a complete change. Already, young Austrians are having less trouble getting hired. Once the new professors get a few years of teaching under their belts, they’ll be ready to jump in and make major contributions to the body of knowledge. They will be leading the charge to restore honesty in scholarship and rationality in economics.

According to Davenport (1983), the ‘heavy hand of government not only bears down on employers but actually denies job opportunities

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to men and women able and willing to work outside the government standards. The evidence is now overwhelming that minimum wages in particular bear hardest on those which government in its wisdom is trying to help—the poor, the disenfranchised, and minority groups in general.’ Citing another GMU Professor of Economics, Davenport continued: As Walter Williams and others have shown, the minimum wage today set at $3.35 an hour accounts in no small part for outrageously high unemployment of nearly 50 per cent among black youth. Such laws should be allowed to die on the vine as they become irrelevant due to creeping inflation. Better still, they should be eliminated entirely as an affront to the principles of a free and humane economy.

2 The Hayek–Fink–Koch ‘Knowledge’ Production Line In 2017, Trump’s EPA Administrator, Pruitt, declared that the federal government’s ‘war’ on coal was over (Millman 2017). Prior to the first ‘deregulation wave’ (1974–2008), the ‘regulation wave’ appeared to be gaining momentum. Before climate change, slag heaps symbolized externalities. The 1966 British Aberfan disaster (the catastrophic collapse of a colliery spoil tip) killed 116 children and 28 adults. Nationalization does not automatically internalize externalities: the official report blamed the National Coal Board for extreme negligence (McLean and Johnes 2000). In 1972, the West Virginian Pittston Coal Company’s coal slurry impoundment damn burst and descended on the 5000 residents of 16 coal towns along Buffalo Creek Hollow: 125 were killed, 1121 were injured and over 4000 were left homeless. Four days before the disaster, a federal mine inspector had declared the situation ‘satisfactory’—the Governor of West Virginia (1969–1977), Arch Moore Jr., is suspected of complicity. The first commission to investigate the disaster, Governor Moore’s Ad Hoc Commission of Inquiry, appeared to be rigged (it consisted of coal-sympathetic members plus government officials

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from departments who had inadequately supervised the safety of the ­operation); and so a separate non-rigged Citizen’s Commission also convened. The state of West Virginia sued the Buffalo Creek-Pittston Coal Company for $100 million; but Governor Moore negotiated a $1 million settlement three days before he left office. Amid allegations of corruption he ran for reelection in 1988; was eventually prosecuted for and pleaded guilty to five felony charges and in 1990, was sentenced to five years and ten months in prison (Dorsey 2011, 125). In 1983, Charles and David Koch bought-out their two brothers for $1.1 billion—leaving one brother, Bill, convinced that he’d been defrauded. He would spend the next 18 years suing his brothers, calling them ‘the biggest crooks in the oil industry.’

In 1989, a Senate committee investigating Koch business dealings with Native Americans described Koch Oil tactics as ‘grand larceny.’ After a sting operation, the Senate committee concluded that over the course of three years, Koch ‘pilfered’ $31 million in Native oil; a jury concluded that Koch had submitted more than 24,000 false claims, exposing Koch to some $214 million in penalties. Koch later settled, paying $25 million. Koch’s lawyer described his client as a victim of Senate ‘McCarthyism’ (Dickinson 2014). The MPS sought methods of ‘re-establishing the rule of law.’12 In The Science of Success How Market-Based Management Built the World’s Largest Private Company, Charles Koch (2007, 58) described his ideology: Even with all of us seeking our own self-interest and even without any society-wide planning, order emerges. Because this emerging order is not centrally planned, F.A. Hayek described it a spontaneous order.

In 1994, when the Clinton administration sought to stop the use of the atmosphere as an ‘open sewer’ by levying an externality tax on the heat content of fuels (the BTU tax), Fink confessed to The Wichita Eagle: ‘Our belief is that the tax, over time, may have destroyed our business.’

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Rothbard (2010 [1947], 2260) explained the logic: ‘A price, therefore, is a free act of voluntary exchange between two individuals, both of whom benefit by the exchange (else the exchange would not be made!). A tax is a compulsory act of expropriation, with no benefit accruing to the individual (unless he happens to be on the receiving end of property expropriated by the State from someone else) [Rothbard’s emphases].’ If total costs exceed total revenue, loses ensue; and when total revenue is less than variable costs, neoclassical shutdown (and exit from the industry) occurs. In Pigouvian economics, total costs should include full-cost pricing (private plus social costs); but in ‘free’ market economics, increasing fixed costs (by buying and thus monopolizing ‘human capital’) can reduce variable costs by evading social costs through political and ‘academic’ lobbying. Polluters can thus choose between paying a Pigouvian tax on their product or making tax-exempt contributions to ‘think’ tanks and ‘free’ market economics departments. Louis XIV is attributed with the phrase ‘L’Etat, c’est Moi’ (the State, it is I); Hayek was able to steal from educational charities because of his ‘Morality, it is I’ posture; and ‘Mercatus’ is Latin for ‘Market.’ Beginning four years after the demise of the Habsburgs, Mises (1922) failed to persuade consumers that they were sovereign; but after 1947, Hayek successfully persuaded those recruited to finance his aristocratic lifestyle that (because they were promoting his ‘Morality’) they deserved to be sovereign producers. Describing himself as a ‘Research Consultant’ at what became the Mercatus Centre (the Center for the Study of Market Processes), Clayton A. Coppin (1990) published a somewhat hagiographic FEE account of the entrepreneur as creative destroyer and philanthropist: John Arbuckle’s ‘humanitarian endeavors contained the same type of innovative activity as his commercial enterprises. Little attention is paid to the importance of the entrepreneur in providing humanitarian services. It is assumed that the entrepreneur is motivated by personal gain, and, therefore, the entrepreneurial process is not important in providing humanitarian services. Arbuckle’s efforts would suggest that improvements in humanitarian services can benefit from the entrepreneurial process. It may well be that improvements in humanitarian

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activities require the same type of innovativeness and new combinations for improved efficiency that economic growth requires.’ Describing himself as a ‘management consultant and historian, Koch Industries, Wichita,’ Coppin also co-wrote with Jack High (GMU Professor of Economics) The Politics of Purity: Harvey Washington Wiley and the Origins of Federal Food Policy, (Coppin and High 1999) which illustrates the principle of regulatory capture. According to Jane Mayer (2010, 2016), instead of writing Koch’s official history, Coppin produced Stealth (a 300-page unpublished, private history commissioned by the estranged brother, Bill Koch) which illustrated deregulatory capture: Charles Koch was ‘driven by some deeper urge to smash the one thing left in the world that could discipline him: the government.’ By the end of the 1970s, Charles was ‘not going to be satisfied with being the Engels or even the Marx of the libertarian revolution. He wanted to be the Lenin.’ The ‘true libertarian,’ Charles Kock told Brian Doherty (2007), should be ‘tearing’ government ‘out at the root.’ According to Mayer (2010, 2016), Coppin concluded that the Mercatus Centre was a ‘lobbying group disguised as a disinterested academic program’; and Leonard Liggio (who was employed by the Kochfunded, Orwellian-named, Institute for Humane Studies, 1974–1998) wrote ‘National Socialist Political Strategy: Social Change in a Modern Industrial Society with an Authoritarian Tradition’ which described the Nazis’ successful creation of a youth movement as key to their capture of the state. Like the Nazis, Liggio suggested, libertarians should organize university students to create ‘group identity.’ ‘Ein Volk, Ein Reich, Ein Führer ’? The term laissez faire may have originated as a response—‘Laisseznous faire (‘Leave it to us’ or ‘Leave us alone’)—by French businessmen to a question asked by Louis XIV’s Minister of Finance, Jean-Baptiste Colbert, about how the state could assist them (Gildenhuys 2004, 370). Assistance to business continues to be offered by those with divinely revealed information: ‘Interference with the price system leads to distortions in the allocation of resources’ (Boettke 2007, 179). The Koch brothers funded a ‘grassroots’ uprising (a prelude to the Tea Party) run through CSE—what David Koch called a ‘sales force’ to

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dress-up town hall meetings and anti-tax rallies as ‘spontaneous’ demonstrations (see below). In 1994, David Koch bragged that CSE’s campaign ‘played a key role in defeating the administration’s plans for a huge and cumbersome BTU tax.’ (Dickinson 2014)

In ‘I’m Fighting to Restore a Free Society,’ Charles Koch (2014) used The Wall Street Journal op-ed pages to proclaim that ‘the fundamental concepts of dignity, respect, equality before the law and personal freedom are under attack by the nation’s own government.’ Charles Koch (2007, 178, n. 6) also promoted Mises’ ‘free’ market as an alternative to the ‘economic calculation problem’: ‘central planners have no such mechanisms to solve the knowledge and articulation problems they face.’ In 1995, the Environmental Protection Agency (EPA) sued Koch for ‘gross violations’ of the Clean Water Act: state and federal agencies forced Koch to pay a $30 million civil penalty (then the largest in the history of US environmental law) for 312 spills across six states. In Minnesota, a Koch oil refinery was fined for improperly dumping ammonia into local waterways. Carol Browner, the former EPA administrator, complained that Koch ‘simply did not believe the law applied to them’ (Dickinson 2014; Leonard 2017). In 2014, the WVU College of Business and Economics created a Koch-funded Center for Free Enterprise: ‘Talented scholars working together to produce solid research is an exciting and powerful force for progress,’ said Richard Fink, president of the Charles Koch Foundation. ‘By bringing together thoughtful [emphases added] academics, WVU’s Center has the potential to make significant contributions to our understanding of free societies and how they help people improve their lives.’13

According to Polluterwatch, between 2005 and 2015, the West Virginia University Foundation received $1,596,150 from the Charles Koch Foundation.14 Roger D. Congleton is the WVU Branch Banking and Trust (BB&T) Distinguished Chair of Free Market Thought, Center for Free Enterprise (2011–); he had previously been

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Professor of Economics, GMU (1995–2011), Associate Professor of Economics, GMU (1988–1995), Bradley Post-Doctoral Fellow, GMU (1986–1987), and Post-Doctoral Fellow in Austrian Economics, New York University (1979–1980)15; where he was followed as PostDoctoral Fellows by Caldwell (1981–1982) and Ebeling (1983–1984). Documents on the University of California, San Francisco website led ‘Corporate Corruption of Science’ to declare Congleton a member of the tobacco industry’s ‘cash-for-comments’ network.16 According to Mises (2008, 19), entrepreneurial profits—the ‘prize’ awarded by the market for removing a maladjustment in p ­ roduction— will ‘disappear as soon as the maladjustment is entirely removed.’ According to Percy Greaves Jr. (1971) In his greatest work, Human Action, and in his remarkable paper, ‘Profit and Loss,’ reprinted in Planning for Freedom [1974], Mises has demonstrated, beyond cavil [emphasis added], that profits are earned payments to entrepreneurs for successful foresight, speculation, and resulting actions in using available factors of production to satisfy consumers’ needs, wants and desires better than their competitive entrepreneurs.

In 1974, a federal audit found that Koch Industries had broken federal oil price controls; and in 1975, a Koch subsidiary was cited for overcharging their propane gas customers by $10 million (Confessore 2014; Dickinson 2014). Also in 1974, the Charles Koch Foundation was established by Koch, Crane and Rothbard. In July 1976, its name was changed to the Cato Institute reportedly at Rothbard’s suggestion—he had an ‘affinity for the letters of the Anti-Federalist Cato’ (McMaken 2014). A ‘Cato Associates Program’ was begun and a ‘nation-wide campus program to identify and work with bright and ideologically (libertarian, that is) motivated student activists.’ Rothbard became the first Cato Fellow (Grinder 1977, 8). Friedman suggested to Davenport’s research assistant that Paul Samuelson et al. were more favourably disposed to government action because they felt that if government were to do something ‘they would be in a position to tell it what to do.’17 The ‘free’ market is another vehicle by which government can be told what to do—and what not to do.

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In 1976, the Koch brothers sought a ‘free’ market solution by funding the Libertarian Party Presidential campaign. In a fund-raising letter on behalf of LP candidate Roger MacBride, Charles Koch attacked Presidents Nixon and Gerald Ford for supporting price controls—and attacked legislation to impose fuel economy standards as one of the ‘many demonstrations of the bankruptcy of the Republican alternative to Democratic interventionism.’ In contrast, Koch and McBride (both MPS members) sought to advance ‘ideas of liberty and free enterprise’ (Confessore 2014).18 In ‘The Business Community: Resisting Regulation,’ Charles Koch (1978, 31) reflected: ‘This old business strategy of accommodation with government paid off in the past to some extent, perhaps, but today it falls on its face.’ In June 1980, The Wall Street Journal reported that Koch Industries had been subpoenaed as part of a federal criminal investigation into fraudulently obtained oil and gas leases. Post-Watergate campaign finance law made David Koch’s ‘blood boil.’ He had a simple solution: although he had no intention of campaigning himself, if the Libertarian Party chose him as their 1980 VicePresidential nominee, he would contribute several hundred thousand dollars to the Presidential campaign committee in ‘order to ensure that our ideas and our Presidential nominee receive as much media exposure as possible.’ In his Vice-Presidential acceptance speech, he denounced the ‘harassment’ of Koch Industries and implored the assembled delegates to make the Libertarian Party a ‘force that will roll back the coercive force of government.’ The 1980 Libertarian Party election platform subsequently included: ‘We urge the repeal of federal campaign finance laws, and the immediate abolition of the despotic Federal Election Commission.’19 According to Bruce Bartlett, Clark’s speechwriter, the average Libertarian Party member was a typical ‘Star Trek’ convention wannabe. (Confessore 2014)20

In 1972, the Libertarian Party obtained 3674 votes; in 1976, McBride increased that to 172,553; and in 1980, McBride and Koch obtained 921,128 (1.06% of votes cast); but in 1984, with David Koch off

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the ticket, this shrank to 228,111. Correlations can suggest—but not prove—causality. There is, however, an important difference. Elections come-and-go; while a tenured ‘Professor of Economics’ has a lifetime platform: one-man (or rather one-selection-committee)-one-vote, once. In 1980, David Koch spent about $2.1 million (more than half the Libertarian Party’s campaign budget); in 2014, the Koch Foundations reportedly spent $125 million on the mid-term elections—mostly in favour of Republicans (Confessore 2014). And between 2007 and 2012, Koch family foundations contributed $30.5 million to 221 colleges and universities. The non-profits receiving the most Koch funding are the GMU Foundation ($16.3 million); two GMU affiliates, IHS ($10.3 m ­ illion) and the Mercatus Center ($3.7 million); AFP Foundation ($3.6 ­million); Donors Trust ($3.3 million) and the Charles Koch Institute ($2.8 million). But when the Investigative Reporting Workshop of the American University School of Communications contacted the officials of these tax-exempt recipients they got responses such as IHS’s Gary Leff: ‘We’re not a political organization. … We have no position on current legislation. We don’t do lobbying of any kind. Our work complies with our status as a 501(c)3. It would be illegal for us to get involved in politics of any kind.’ When asked why IHS didn’t disclose its donors on its website, Leff replied: ‘I’m surprised you ask that. Nobody really ever asks us that. It is standard practice not to disclose donors on the Web. We have plaques in our office recognizing our contributors.’ (Lewis et al. 2013)

In 1992, David Koch told the National Journal that he viewed himself as an ‘opportunist’: My overall concept is to minimize the role of government and to maximize the role of the private economy and to maximize personal freedoms. … By supporting all of these [nonprofit] organizations I am trying to support different approaches to achieve those objectives. It’s almost like an investor investing in a whole variety of companies. (cited by Lewis et al. 2013)

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David Koch told Doherty (2007, 409): ‘If we’re going to give a lot of money, we’ll make darn sure they spend it in a way that goes along with our interest. And if they make a wrong turn and start doing things we don’t agree with, we withdraw funding. We do exert that kind of control.’ According to Dickinson (2014), in 1980 Koch Industries pleaded guilty to five felonies in federal court, including conspiracy to commit fraud. And according to David Schulman (2014), in 1980, to create a ‘powerful political fiefdom within the broader Republican firmament,’ Charles Koch commissioned Fink to ‘recalibrate’ his ‘free-market revolution’ strategy. When the cartoon version of Orwell’s (1945) Animal Farm was released in 1954, one newspaper headline read: ‘The British out-Disney Disney’ (Chilton 2016); but according to E. Howard Hunt (1974, 70), the CIA had financed the animation. Fisher’s (Harper-inspired) caged chickens funded his ‘liberty’-promoting think tanks21; and the shackling of (live) pigs’ legs to the Chicago abattoir disassembly line inspired both Henry Ford and the Hayek-Koch-Fink assembly lines (Pacyga 2015). Fink described the resulting ‘Hayek-inspired plan’—the ‘Structure of Social Change’: at the higher stages we have the investment in the intellectual raw materials, that is, the exploration and production of abstract concepts and theories. In the public policy arena, these still come primarily (though not exclusively) from the research done by scholars at universities.

The next stage entails ‘refining’ the ‘intellectual output’ into a ‘usable form.’ The Cato Institute, GMU’s Mercatus, IHS and other Kochfunded organizations were to produce ‘reports, position papers, and op-eds’ promoting the fiefdom’s agenda. After ‘grooming,’ an ‘intellectual class of research scholars, journalists, and others’ would emerge to ‘articulate these policies to the masses.’ The third and final stage involved ‘Citizen activist or implementation groups’ to translate the agenda into ‘proposals that citizens can understand and act upon. These groups are also able to build diverse coalitions of individual citizens and special interest groups needed to press

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for the implementation of policy change.’ Charles Koch (1978, 30) regards the public as ‘gullible’22; while David Koch explained: ‘What we needed was a salesforce that participated in political campaigns or town hall meetings, in rallies, to communicate to the public at large much of the information that these think tanks were creating.’ Thus was born CSE and later the Tea Party (Schulman 2014). According to Hayek (1978a), ‘Of course, scientists are pretty bad, but they’re not as bad as what I call the intellectual, a certain dealer in ideas, you know. They are really the worst part. But I think the man who’s learned a little science, the little general problems, lacks the humility the real scientist gradually acquires. The typical intellectual believes everything must be explainable, while the scientist knows that a great many things are not, in our present state of knowledge.’23 This 1980 ‘Hayek-inspired’ ‘Structure of Social Change’ was presumably inspired by the contempt that Hayek (1978a) expressed to James Buchanan about the ‘worst … inferior … mediocrities’ that he was recruiting: what I always come back to is that the whole thing turns on the activities of those intellectuals whom I call the ‘secondhand dealers in opinion,’ who determine what people think in the long run. If you can persuade them, you ultimately reach the masses of the people.24

Presuppositionalists assert that divine revelation is the only basis for rational thought: ‘For a Christian, the content of Scripture must serve as his ultimate presupposition… This doctrine is merely the outworking of the lordship of God in the area of human thought. It merely applies the doctrine of scriptural infallibility to the realm of knowing’ (Frame 1987, 45). Boettke (2011b, 20) was recruited to NYU by Andrew Schotter (1985, 39–40) who, in Free Market Economics: A Critical Appraisal, argued that ‘one of the critical characteristics of the free market argument is its hypothesis that the market, if left alone, will generate socially desirable results. This hypothesis is supported by modem economic theorists, who have proven what have been called the Fundamental Theorems of Welfare Economics or the invisible hand theorems, which, in a restricted sense, prove Adam Smith’s assertions to be correct.’

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Schotter (1985, 39) asked: ‘exactly what are the advantages of organizing society along free market lines? What is the advantage of leaving individuals alone to barter and trade? One answer would be that this type of economic organization is the only one consistent with individual freedom. This reason stems from the work of F. A. Hayek, who discusses the market as the most efficient mechanism capable of processing the huge amount of disparate information necessary to coordinate the plans of individual economic agents.’ Schotter (1985, 119) noted that the ‘average American’s trust in the free market has remained relatively unshaken over the years despite repeated economic crises and occasional flirtations with socialism.’ This trust could be a result of providing a high-status platform for those such as Boettke with divinely revealed knowledge—but Schotter adjudged it to be ‘true because the free market system satisfies what I feel are four basic criteria of any successful and stable economic system.’ To a non-expert outsider, the ‘optimal forecast’ is the prevailing professional consensus. Boettke (2010)—the GMU, BB&T, Mercatus Center Professor for the Study of Capitalism—seeks to reconstruct the spontaneous order: ‘Austrian economics needs to mimic the Keynesian avalanche within the economics profession. We are at a unique moment in high education because of faculty turnover during the next decade or two. It is my goal—I know an ambitious one—to see a free market economist teaching at every college and university in North America and Europe within the next 20 years. We need about 20–30 clusters of 3 or more faculty in those universities, about 10–15 PhD programs and 2 or 3 of those PhD programs have to be in the elite departments … we Austrians have this amazing endowment of scientific ideas from Mises and Hayek. We cannot squander this endowment of unbelievably powerful ideas. We must win the day in the scientific debates.’ Boettke’s fellow Presuppositionist, North (1986b, xix, xxiii), described how to ‘win the day’: Fighting to Win … At least we admit that we are street fighters. We prefer to stab our opponents in the belly, publicly … Take no prisoners! If our style is not considered polite in certain academic circles, then to avoid being manhandled, it would be wise for these epistemological child

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molesters to stay out of print, hidden from public view in their tenured classroom security. If they go into print … they can expect ‘the treatment’ [North’s emphases].

His mission is ‘to do what I can to get their funds cut off.’ Boettke (1995) appears to appreciate argumentum ad hominem: North ‘provides an examination of Marx’s life—some of which is quite revealing.’ Boettke’s (2010, 60) ‘grades at Thiel [Lutheran College] were not exemplary, and except for the intervention of the [basketball] coaching staff, I never would have been admitted’ to Grove City College to restart his undergraduate degree. Boettke (2009)—who has ‘absolutely no qualms fighting’ in an ‘intellectual nasty manner’—is also snobby: ‘who exactly did Joe [Salerno] study with?!’25 Boettke’s snobbery appears to relate to his admission to GMU, which was an ‘undistinguished university’: its faculty were, to put it mildly, not exactly at the forefront of academic research … we were bottom-heavy in newly-minted PhDs. Only a handful were actively publishing in academic journals. (Vaughn 2015, 105)

With Boettke at GMU (from 1983) was the academic fraud, Shenoy: in I Chose Liberty, Dora de Ampuero (2010, 95) recalls her participating along with Ebeling, Rizzo and Jerry O’Driscoll in weekly GMU seminars. According to David Koch, his father was ‘paranoid’ about communism (Goldman 2010); and Boettke appears to be paranoid about the victims of re-feudalisation—homeless children, wounded veterans etc.—putting their hands in his pocket. Sennholz—a ‘Misean for Life’ Luftwaffe bomber pilot—was ‘almost alone among eminent free enterprise economists’ in resting ‘his defense of a free society on revelation … divinely revealed information’ (Robbins 2010). Referring to a card-carrying Austro-Fascist and promoter of ‘Ludendorff and Hitler,’ Sennholz would announce to his Grove City College students: ‘next week we will discuss the master’s work’ (cited by Boettke 2009). Boettke told Doherty (2007, 423–424) that Sennolz didn’t ‘reach you with the technical aspects, but with the

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ideological aspects. Sennholz explained the welfare state as this giant ­circle with all of our hands in our neighbors’ pockets. This was 15 years ago and I can still remember it. How many people with one lecture 15 years ago can make you still remember that lecture? … Sennholz could get you hyped up on your ability to walk through fire for the truth [emphasis added].’ Boettke was a post-graduate student at GMU (1983–1989), where Fink would get you hyped up about this stuff. We were coming from a nontop-ranked school and had this [Austrian] label on our heads, so we had to outcompete other people. When I was a kid I wasn’t intellectual, but as a basketball player I was competitive. Sennholz and Fink made these appeals that fed into my psyche: ‘We’ll form this team and go out and beat ‘em!’

To his Ph.D. students, Fink used an analogy with the civil rights movement: ‘Before we just wanted to be let on the bus and not raise a ruckus. Now we’re gonna be like Malcolm X, Austrian and proud. In your face with Austrian economics.’ This appears to have left his students trapped in the headlights of a fund-raising cult: ‘In addition to appealing, internally, to the formal structure and validity of a theory, Austrians must also appeal to its relevance … The value of Austrian analysis has always been its realism … Mises’ classic work of 1912 stands as a shining example of the integration of theory and history’ (Boettke et al. 1986). Mises (1912)—or rather popular versions of it— was the ‘shining example’ which attracted Hitler to Austrian Business Cycle Theory (Leeson 2018). Boettke, Horwitz and David Prychito were rewarded with funding to travel to the MPS meeting in the South of France.26 Boettke ($3500) and Horwitz ($2500) became Hayek Fellows at the MPS meeting by making submissions to the F.A. Hayek Essay Contest. Boettke (12 August 1994) informed the Heritage Foundation that he would stay in the Hotel Majestic27; and when Feulner told Archduke ‘Robert of Austria’ (5 December 1994) of the Prizes, the Habsburg Pretender’s younger brother was obviously pleased.28

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The Federalist describes the ideological fog which passes for ‘free’ market education: Boettke’s faculty combine Hayek’s Austrian economics (which views the economy as a dispersed cloud of information that agents must learn, interpret, and navigate) and Buchanan’s public choice theory (which studies the ‘profit motivated’ self-interested actions of all institutions— including teachers’ unions, regulatory agencies, political parties, and other groups outside the traditional for-profit companies people associate with economics). (Major 2017)

In 1977, Fink (BA Rutgers, MA UCLA, Ph.D. NYU) founded the Center for the Study of Market Processes (later the Mercatus Center) at Rutgers University before serving as Executive Vice President of Koch Companies Public Sector and Vice Chairman of the Board of Directors of the Charles Koch Foundation and the Charles Koch Institute, Chairman of Stand Together, and Director of the Fred C. and Mary R. Koch Foundation.29 According to the Austrian Economics Newsletter (1978, 14), of ‘great importance’ to the Rutgers undergraduate program in Austrian economics is the ‘funding provided by Fred C. Koch Foundation which will make possible scholarships for promising students.’ According to the John Birch Society, Fred Koch ‘spent a generous portion of his later years using his wealth and influence to fight the communism he abhorred. He was an early member of the The [sic] John Birch Society’s National Council,’ and ‘supported a variety of freedom-related causes, all the while continuing to build the company today known as Koch Industries.’30 With Fink’s assistance, in 1984, the Koch brothers formed CSE which evolved into AFP. For the 2016 election, the Koch brothers’ network spent between $720 million and $750 million to promote the ‘free’ market. Trump (2 August 2015) denigrated those who ‘beg for money etc. from the Koch Brothers. Puppets?’31 But the Kochs and their operatives have welcomed much of the fledgling administration’s actions, including efforts to roll back federal regulations, the decision to pull out of the Paris global climate accord, a Veterans

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Administration reform bill and the appointment of Neil Gorsuch to the Supreme Court … Koch officials say their network has better access to the Trump administration than they expected given past frictions, partly because former Koch operatives have been hired in key administration jobs … ‘Overall, we’ve made tremendous progress on the federal level that we haven’t been able to make in the last 10 years,’ said James Davis, a spokesman for Freedom Partners, a Koch-backed advocacy group.

Addressing more than 400 supporters, Charles Koch praised the progress that his organization had made, particularly since the 2016 election: ‘When I look at where we are — at the size and effectiveness of this network — I’m blown away,’ he said. ‘I’m more optimistic now than ever.’ (Oliphant 2017)

In 2017, Vice President Mike Pence was invited to deliver the keynote address to the annual meeting of activists and donors organized by AFP (Vogel 2017). In ‘Economist wins Nobel prize for blowing politicians’ cover,’ Fink (1986), signing himself ‘President of CSE,’ derided policy makers for ‘kowtowing to organized special interest groups at the expense of the broader welfare of the general population’: Put bluntly, Buchanan maintains, politicians and government bureaucrats promote their own self-interest, not some utopian ideal of the ‘public interest.’

Buchanan’s critics hate the fact that their ‘idealism’ has been exposed for the cynical fraud it is. As a result, many have attacked Buchanan as being on the ‘fringe’ of academic respectability.

Grinder (1977, 8–9) reported that Charles Koch was a ‘shrewd and competent businessman,’ a ‘solid and wellread libertarian … In fact, it

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is a rare libertarian who is as serious a student of the literature of liberty as is Charles Koch … Between them, Crane and Koch bring a wealth of talents which is unparalleled in modern libertarian history.’ Grinder found personal salvation: Five years ago I was an unreconstructed pessimist, ready to go off, find a cave and crawl in. I was absolutely certain that liberty did not have a ghost of a chance for at least the next millenium. The only thing that kept me from slipping away was my deeply held sentiment that, although there was little hope of success, there was something so right, so good, and so just about the struggle itself that it would be tantamount to sacrilege not to carry on. Thanks to the rise of key institutions such as Cato Institute, the Center for Libertarian Studies, the Libertarian Party, Libertarian Review, a more active Institute for Humane Studies, Free Life Editions, and a rejuvenated Liberty Fund, and the rapid resurgence of Austrian free market economics, none of us has ever to feel isolated and pessimistic again.

Two essays in Libertarian Review by Rothbard and Charles Koch, respectively, laid out the ‘free’ market agenda. According to Koch (1978, 32): ‘Taxes are particularly troublesome, especially since many free market businessmen believe that tax exemptions are equivalent to subsidies. Yet morally and strategically, tax exemptions are the opposite of subsidies. Morally, lowering taxes is simply defending property rights; seeking a subsidy is asking the government to steal someone else’s property for your benefit. Strategically, lowering taxes reduces government; subsidies increase government [Koch’s emphases].’ According to Rothbard (1978, 20), the libertarian ‘should always and everywhere support a tax cut as a reduction in state robbery. Then, when the budget is discussed, the libertarian should also support a reduction in government expenditures to eliminate a deficit. The point is that the state must be opposed and whittled down in every respect and at every point: in cutting taxes or in cutting government expenditures. To advocate raising taxes or to oppose cutting them in order to balance the budget is to oppose and undercut the libertarian goal [Rothbard’s emphases].’

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Other Libertarian Review essays laid out the ‘Use of Knowledge in Society’ approach to what Milton Mueller (1978, 15) described as the nonconcept of ‘education.’

In ‘Developing libertarians,’ Mueller (1979, 18) promoted ‘intellectual orgies’ as the alternative to education: ‘What is to be done with all those new people attracted by libertarianism but lacking a complete grasp of its principles and traditions? Attracting new people is one thing, but educating and developing them into the kind of individuals who can explain ideas, write the articles, do the research and generally take leadership positions is another matter altogether. The word for this is cadre [Mueller’s emphasis]: women and men who possess the wide-ranging knowledge of libertarianism and the commitment to creating a free society that can further the movement. The Cato Institute has decided to meet this need head-on. Now one year old, their Summer Seminars in Political Economy are the most ambitious attempts yet at full-scale libertarian education.’ In ‘Towards a Libertarian Theory of Revolution,’ Mueller (1978, 15) asked: But how do we change minds; whom do we educate; by what method do we disseminate ideas; them what do we do with those who agree with us; and what do we do with those who are ‘educated’ well enough to know that their best interests lie in the preservation of the libertarian activists established order? These are genuinely strategic issues, which the nonconcept of ‘education’ only obscures. Walter Grinder and John Hagel, two individuals who are doing some pioneering work in the area of a theory of social change have written that ‘ideas in isolation are impotent; it is only by virtue of their adherents that ideas have any impact on society. For this reason, it becomes essential to focus explicitly and systematically on agencies for social change. Here, imagination is called for: the people who will transmit the ideas through the looking at the present political situation - the long-term social system [Mueller’s emphases].’

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In ‘The Business Community: Resisting Regulation,’ Charles Koch (1978, 32) appeared to insist on academic regulation of his ‘cadre’— complaining about the ‘largely wasted … money’ that had ‘contributed to those private colleges who make free enterprise noises, but have failed to produce competent graduates dedicated to establishing the free enterprise system. There are too many of these. The development of talent is, or should be, the major point of all these efforts. By talent, I mean those rare, exceptionally capable scholars or communicators willing to dedicate their lives to the cause of individual liberty. To be effective, this talent must have the knowledge, skill, and sophistication to meet statist adversaries and their arguments head on, and to defeat them. They must have the desire and commitment to unceasingly advance the cause of liberty. Statists have succeeded while we floundered because they’ve had their talent, their cadre, to develop and sell their programs. During the 15 years I have been actively investing my time and money in reestablishing our free society, our biggest problem has been the shortage of talent. When conscientious, dedicated scholars or communicators worked on a project, we were effective; when they weren’t available, we failed [Koch’s emphases].’ Boettke’s (2007, 179) divinely revealed information was available: ‘Interference with the price system leads to distortions in the allocation of resources’ and ‘Taxation discourages production.’ In a democracy, transparent taxation is the glue that bonds the governed (the electorate) to the government—oil sheikdoms and Utopias of the Left and Right have other methods of extracting resources. Taxes can also produce the (self-reported) desired outcomes that the ‘free’ market seeks to avoid—such as encouraging tobacco addicts to quit. Boettke tells his GMU students that ‘Economics is a tool of critique, not an engine of advocacy’ (cited by Martin 2010, 136). But do Virginians know that their taxes are used to produce the distorted ‘knowledge’ that comes off the Hayek-Koch-Fink assembly line? Are GMU students and their parents informed about the ‘nonconcept of “education”’? Hayek-promoted deflation led to the collapse of the interwar economy and the rise of Hitler. The optimal forecast of the relevant scientific community is that climate change will have catastrophic consequences

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and that therefore a revenue-neutral carbon tax could reduce the damage. But according to Boettke (2007, 180), Rand’s ‘basic point is unassailable. What indeed would happen if the innovators and wealth creators in a country simply shrugged and stopped allowing themselves to be taxed, regulated and controlled against their will? A collapse of the economy would indeed ensue.’ After four decades studying and teaching economics, Boettke is still unable to distinguish between a price and a quantity (Leeson 2018). According to The Wall Street Journal, ‘Roughly 75%’ of his GMU students have ‘gone on to teach economics at the college or graduate level.’ Boettke explains to them the importance of sometimes ‘letting prices fall. There’s little to fear [emphasis added] in deflation, he adds, when it accompanies periods of strong productivity growth’ (Evans 2010). In contrast (summarizing approvingly Hazlitt and Mises), ‘inflation is socially destructive because it distorts the pattern of exchange of production and breaches of trust in the monetary unit, which links all exchange activity’ (Boettke 2007, 179). Hayek (28 August 1975) was obliged to make a ‘confidential’ reply to Seldon apologizing for having apparently stated that he regarded the IEA as a ‘mere popularizing propaganda’ institution: the IEA was, he assured Seldon, superior to FEE’s ‘propaganda’ efforts.32 Asserting that ‘we have had considerable success at GMU in terms of placement and impact,’ Boettke (2011b, 21) instructed aspirational Austrians to use the opportunities provided by our ‘movement.’

Boettke had ‘benefited greatly’ from ‘close and constant involvement with 3 institutions: FEE, IHS, and Liberty Fund—especially IHS’; although he also thought that ‘certain individuals’ working at IHS were tactically inept: they have ‘often communicated the wrong message to aspiring academics by encouraging a stealth strategy that is not effective.’ Hayek (1974a) devoted his career and his Nobel Lecture to ‘The Pretense of Knowledge.’ For Mises (2009/1978 [1940], 87), ‘suffering from delusions of grandeur’ was the ‘occupational disease of German

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professors.’ In ‘10 Austrian Vices and How to Avoid Them,’ Daniel B. Klein, complained about the quality of his GMU students: You are not a philosopher. Your reader can tell this … Many Austrians have a tendency to think that economists they agree more with are ‘better’ economists than those they disagree more with. This is not true … Most economists will have no idea what you’re talking about if you tell them you’re working on ‘capital theory’ … you are not going to do this. Do not pretend otherwise. In fact, ‘grand theory’ or ‘treatises’ of all kinds should be avoided until you’re a full professor or 65, which ever comes first. Nearly all Austrians at one point have these delusions of grandeur, but they are just that—delusions.33

Would the ‘free’ market protect property rights? Agency theory addresses the potential incentive-incompatibility issues associated with the separation of ownership (share-holders) from control (managers)—according to Rothbard (1981), Charles Koch had a ‘free’ market solution. Rothbard’s ‘The Clark Campaign: Never Again’ (1980) was rapidly followed by ‘It Usually Ends With Ed Crane’ (1981): the ‘libertarian’ power elite of the Cato Institute, consisting of President Edward H. Crane III and Other Shareholder Charles G. Koch, revealed its true nature and its cloven hoof. Crane, aided and abetted by Koch, ordered me to leave Cato’s regular quarterly board meeting, even though I am a shareholder and a founding board member of the Cato Institute. The Crane/Koch action was not only iniquitous and high-handed but also illegal, as my attorneys informed them before and during the meeting. They didn’t care. What’s more, as will be explained shortly, in order to accomplish this foul deed to their own satisfaction, Crane/Koch literally appropriated and confiscated the shares which I had naively left in the Cato Wichita office for ‘safekeeping,’ an act clearly in violation of our agreement as well as contrary to every tenet of libertarian principle.

Rothbard planned to testify in court that Charles Koch would go ‘to any end to acquire/retain control over the nonprofit foundations with which he is associated’ and ‘considers himself above the law’:

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Charles Koch has a practice of misusing nonprofit foundations for his own personal ends. Charles Koch wants absolute control of the nonprofit foundations, but wants to be able to spend other people’s money not his own. He wants to spend that money on things that will enhance his personal image and goals, even if these expenditures are not consistent with the publicly stated goals of the foundation. Amongst other things, Charles Koch uses his involvement with non-profit foundations to acquire access to, and respect from, influential people in government and elsewhere. (cited by Schulman 2014)

How are disputes resolved in the anti-democratic ‘free’ market? After Rothbard denounced Crane’s ‘cynical and power-hungry disregard of principle,’ Crane had to be physically restrained from ‘slugging’ him at a libertarian social event (Sublett 1987). Rothbard (1981) made threatening noises about Cato’s tax-exempt status—it ‘is not supposed to have anything to do with partisan politics.’34 Rothbard (December 1981) then wrote to potential donors: the CLS is in ‘trouble. And only you can help.’35 When funded by the Volker Fund, Rothbard (2010 [1961], 17) praised Mises’ growing influence: ‘In addition to individual grants and seminars and symposia, the Volker Fund has also done excellent work in sponsoring such influential [emphasis added] graduate school professors as Mises at NYU and Hayek at Chicago, and awarding fellowships for study with these men.’ But for fund-raising purposes, Rothbard (December 1981) described Mises’ persecution: one of the ‘(many) crimes’ of the US academic ‘establishment’ was its ‘shabby’ treatment of Ludwig ‘von’ Mises. Despite a ‘brilliant’ teaching record at ‘first’ class European universities, and the authorship of the ‘most important’ publications since Adam Smith’s Wealth of Nations, Mises couldn’t get a job. NYU had to be ‘paid [Rothbard’s emphasis]’ to allow Mises to teach, in a ‘basement,’ after he ‘escaped the Nazis.’ Rothbard, who was working ‘many’ hours a week for CLS without pay, offered signed copies of his The Ethics of Liberty to those who donated: ‘Won’t you please send your check right away?’36 According to Hülsmann (2007, 630), Mises complained that ‘none’ of the newspapers in Vienna ‘dared’ oppose rent control and ‘few’

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economists were critical enough to ‘see through the public propaganda’ and even fewer ‘dared’ to speak out against it. When Hayek published his study on rent control, Miseans filled this ‘gap.’ In ‘Three Fallacies of Rent Control,’ FEE’s Robert Batemarco (1995) cited or summarized (it’s not clear which) their ‘spiritus rector ’: as ‘Mises noted, an attack on economics itself is the only way to undermine the irrefutable case that economic analysis makes against all kinds of interferences with the market. If one tries to refute the devastating criticism leveled by economics against all these interventionist schemes, one is forced to deny the very existence … of a science of economics.’ According to the Misean Walter Block (2008, 57–58), a libertarian taking advantage of rent control is a ‘quasi thief ’ who was violating a ‘landlord’s rights’ and could become subject to ‘a libertarian Nuremberg court.’ From his three-bedroom rent-controlled Manhattan apartment, Mises continued to condemn all interferences with the ‘free’ market (Hülsmann 2007, 630). The Manhattan Institute organized a 1987 forum on ‘Rent Control and the Housing Crisis.’37 Rothbard used Austrian ‘logic’ to defend his own principled choice of a rent-controlled rather than a free-market apartment: ‘It’s like saying it’s my fault I fly from a government-owned airport. Well, there are no free-market airports’ (cited by Sublett 1987). In ‘free’ market circles, Rothbard is known as ‘Robhard’ (Skousen 2000)—but referring to this Koch-induced ‘Black Friday,’ the scales dropped—temporarily—from his eyes: All this leads me to ruminate on something I have been pondering for a long time. Let each and every one of you, dear readers, consider this crucial question: How many fellow libertarians would you trust to guard your back in an ambush? How many would you trust? As a friend and longtime libertarian observed in reply: ‘Ambush, hell. How many libertarians would you allow in the same room with you and trust not to poison your food?’ There are several morals to this little story. One is: ‘Don’t leave anything for safekeeping in Wichita, whether it be a stick of bubblegum or your precious soul.’ Another is: Just because someone says he’s a ‘libertarian,’ doesn’t mean he won’t rob you blind if he has the chance. (Rothbard 1981)

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In Cato’s Regulation, William Niskanen (1990) complained about the ‘distortion of science’: Most standards on carcinogens are based on extrapolating from the effects of high doses on rodents, by a compounding of conservative assumptions, to estimate the effects of low doses on humans; this process probably overestimates the risks to humans by several orders of magnitude. In numerous cases, a standard is based on a scientific possibility without any significant evidence of actual harm - a pattern common to the standards for CFCs, air toxins, and sulphur dioxide emissions; the proposed ban on smoking in the workplace; and the many proposed measures to reduce the threat of global warming. One consequence of the distortion of science is that substantial resources are spent to reduce minimal risk at the expense of other activities that would reduce risk at a much lower cost.

Niskanen urged: ‘repeal all federal environmental legislation enacted since 1972’38; and advised ‘above all, don’t panic. The apocalyptics are wrong. We do not face a silent spring. Earth is not in the balance. Most health and environmental indicators continue to improve. We face several continuing environmental problems, but no apparent crises.’ Niskanen (1933–2011)—Chairman (1985–2008) and Chairman Emeritus (1985–2011) of Cato’s Board of Directors—used his status as a ‘former member’ of Reagan’s CEA (1981–1985) to promote the GMU Market Process Center which had, he asserted, ‘quickly earned a deserved reputation for solid economic training.’39 After almost three decades of service to Charles Koch’s organization, Crane’s obituary stated that Niskanen had been a ‘passionate leader of the growing classical liberal movement around the globe. More importantly, he was a man of unshakeable integrity. His influence on and importance to the Cato Institute cannot be overstated. His passing is a terrible loss to the Institute and to the nation.’40 Cato’s structure gives the Koch brothers power to appoint half of Cato’s Board; and upon Niskanen’s death, they filed suit to prevent his shares being transferred to his widow. The Washington Post reported that the Cato Institute was at ‘risk of retroactive revocation of its tax-exempt status back to 1977’—the Internal Revenue Service could order Cato to

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pay taxes on income at the corporate rate of 35%. In 2011, it had revenues of $39.3 million (Farnham 2012). John Allison—who has ‘called for abolishing the Federal Reserve’— met with Trump at the White House and has been ‘widely mentioned’ as a potential Chair of the Federal Reserve (Stewart 2017). Before becoming CEO and President of the Cato Institute, Allison was Chairman and CEO of BB&T and ‘Distinguished Professor of Practice,’ Wake Forrest University. BB&T spends about $5 million a year to ‘finance teaching positions and research’ on ‘the moral foundations of capitalism.’ According to Allison, the money isn’t specifically earmarked for Rand’s Objectivism but rather to support the work of ‘free-market professors, especially those that have a serious interest in Rand’s philosophy’ (Martin 2009). In The Leadership Crisis and the Free Market Cure, Allison (2015, 172) explained that ‘it is scary to me that Keynes is taken seriously’ based on the General Theory: It is a total rationalization for big government. You should read it along with Das Capital [sic] by Karl Marx. That these ‘thinkers’ are still having a material influence on public policy decisions should be of great concern to you … I asked all members of the BB&T executive management to read both The Theory of Money and Credit and Human Action. If all CEOs of banks and all members of the Federal Reserve Board had been required to read The Theory of Money and Credit, the recent financial crisis could have been avoided.

It was through Mises’ (1912) Theorie des Geldes und der Umlaufsmittel (The Theory of Money and Credit )—or more likely through popular versions of it—that Hitler became a convert to Austrian Business Cycle Theory (Leeson 2018). A fair-minded observer detected not a school of economics but a cult: There was a great difference in focus between Hayek (the Austrians) and Chicago as a whole. I really respect and revere those guys. I am not one of them, but I think I once said that if somebody wants to approach economics as a religion, the Austrian approach is about as good as you can

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get. They approach it from the angle of philosophy: They derived the principles of free market economics from what they saw as ‘the nature of man’ and other fundamental principles. (Harberger 1999)

In ‘The economics of perversion,’ North (2016)—invoking the authority of the notorious fraud, ‘Deacon’ McCormick—complained that ‘Christians have been naive. They think they can send their sons and daughters to colleges that call themselves Christian, but whose faculty members are loyal Keynesians (to the extent that they understand anything about economics).’ Promoting the ‘separation of school and state,’ North (1986a, xv) insisted: The state is not to be trusted with the shaping of the minds of the voters. Getting the state out of education at every level is the only way to achieve God-honoring education. It is not the state’s function to support the educational establishment. If it does, this is the equivalent of state-supported religious worship. It is the re-establishment (compulsory tax-financing) of the church, with a new priesthood, the teachers [North’s emphases].

Presumably, for his contributions to ideology, Boettke was given an Honorary Doctorate from Universidad Francisco Marroquín, Guatemala.41 What is required to obtain a ‘free’ market undergraduate degree? Multiple choice questions offering one of two boxes to be ticked? ‘This problem can best be solved by’ either • ‘Suppressing liberty and expanding the federal government’; or • ‘Leaving it to the free market.’ Do non-free market external examiners play any role in the accreditation process? How are ‘free’ market Ph.Ds awarded? Must conclusions be approved by supervisors before doctoral students begin their research (Leeson 2018)? ‘Free’ market economics appears to consist of religiously correct conclusions derived from elementary misunderstandings. According to ‘free’ market Presuppositionalists such as North (1986b), those engaging in ‘natural’ sex may go to heaven; whilst hell awaits those who indulge in

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‘unnatural’ (‘Godhating,’ ‘homosexual pervert’) sex like Keynes (and Hayek with his cousin and second wife). Likewise, liability-managing banks that acquire funds (liabilities) to make loans (assets) will succeed only if the interest rate is ‘natural’ (a price that reflects domestic savings). According to Mises (1951 [1932], 510), the ‘socialist commonwealth lacks above all one quality which is indispensable for every economic system which does not live from hand to mouth but works with indirect and roundabout methods of production: that is the ability to calculate, and therefore to proceed rationally. Once this has been generally recognized, all socialist ideas must vanish from the minds of reasonable human beings.’ According to Epstein (2011), Rothbard had a devastating refutation of the theory of imperfect or ‘monopolistic’ competition — dear to leftists’ hearts, since it highlighted the irrationality of capitalism … What Rothbard exposed was the preposterousness of the whole formulation. For why assume that all such monopolistic competitors necessarily invest in excess capacity? ‘To plan a plant for producing x units,’ he quotes economist Roy Harrod observing, ‘while knowing that it will only be possible to maintain an output of x − y units, is surely to suffer from schizophrenia.’ It made no more sense to believe that all such businessmen would waste funds on excess as it was to believe that they would all consistently underinvest and plan on inadequate capacity.

Austrians also believe that capitalists can’t proceed rationally because they are vulnerable to false consciousness. Austrian Business Cycle Theory asserts that as Central Banks lower interest rates (below the ‘natural’ rate), banks will supply loans to unsustainable demanders who will use more capital than domestic savings ‘allows.’ Profit-maximizing banks and firms will fail—along with the aggregate economy (the Central Bank-induced boom-bust cycle). This will inevitably require the standard Austrian response—deflation. But a lower interest rate from internationally-sourced funds would be observationally equivalent to a Central Bank-induced lower-than-­ ‘natural’ interest rate. The quantity of funds demanded from banks

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would increase—but banks have the discretion to supply either (a) more demanders or (b) more to each demander. If (b), this would, Austrians assert, facilitate a deterioration in quality—more ‘roundabout’ (i.e. capital intensive) production methods. There are two possibilities. The Koch brothers fund the Austrian School of Economics because • they are worried that the Federal Reserve will lower interest rates below the ‘natural’ rate which will fool them into using more roundabout methods of production and lead them into bankruptcy; or • they are buying lobbyists. ‘Roundabout’ was designed by Böhm Ritter von Bawerk to refute the Marxian concept of exploitation and to justify the return to capital. But using more capital (a long-run adaptation) increases production for any given labour input (the production function shifts upwards)—which has other beneficial consequences. A price ceiling—such as that imposed by governments in response to the 1973 OPEC oil shock—causes short-run excess demand. The total—explicit and implicit (opportunity—queuing)—cost may be close to (or even exceed) the ‘free’ (non-ceiling) market price. One advantage of avoiding an explicit price ceiling is that the long-run price elasticity of demand is higher than the short-run—in the long-run, demand will shift to lower-cost renewable alternatives: OPEC’s market power will be eroded by market forces as ‘steep’ short-run demand ‘flattens’ out in the long-run (causing downward pressure on price). Even without subsidies, capital will be attracted to the renewable sector, lowering the costs of renewable energy still further. According to efficiency wage analysis, because the labour input has some discretion over its own productivity, increasing wages (and thus the ‘cost’ of ‘shirking’) can reduce Real Unit Labour Costs. Likewise, an increase in the price floor on wages will take the employed off welfare-supplements—which will reduce government expenditure (and welfare-dependency). This change in relative prices—making labour relatively more expensive than capital—will encourage capital substitution (more capital-intensive methods of production), raising both

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capital-per-worker and the average (and maybe also the marginal) product of labour. Since the price of output may rise in line with the increase in the minimum wage, the marginal revenue product of labour should rise—and with it the profit-maximizing real wage. ‘Laffer-drawn’ on a napkin, this would ‘show’ that an increase in the minimum wage is a free lunch: the long-run demand for labour increases to eliminate any short-run disequilibrium unemployment. (The backward-bending supply curve of labour could also be used to ‘draw’ a positively-sloped short-run Phillips curve.) But outside the ‘free’ market, economists aspire to disinterested analysis. It is also clear that an increase in the minimum wage (w) has consequences similar to a reduction in interest rates (i)—w/i increases: Austrians vehemently oppose both policies. In the short-run, some—presumably lower productivity—workers will be displaced by a higher minimum wage: the challenge of policy is to provide incentives for (long-run) human capital acquisition so as to raise their productivity.

3 ‘Cadre’ Development The 1986 MPS meeting addressed: ‘How Can Liberty Be Sold: The Freedom Promotion Business.’42 The GMU Market Process brochure contains a photograph of Boettke presenting a paper on ‘Understanding Market Processes’ to the American Marketing Association.43 According to a 1987 IHS/GMU document on ‘Fund Raising for the Free Society’: ‘You are selling a product’ to the ‘potential donor (PoDo)’; the ‘best advice comes from TV training manuals’: • • • •

alertness, e.g. sitting on the front edge of the chair—not lolling back; not being side-tracked; being positive; coming to a clear conclusion.

Letters should end with: ‘Yours for less government and less taxation,’ and referees and addresses should be provided: Kirzner, Bartley III, Pearson and ‘Ms. Kimberley Ohnemus, John Ohlin Foundation.’44

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According to the GMU graduate and President of the Society for Development of Austrian Economics, Austrians should try to be the best Austrians they can be, rather than trying to compete against M.I.T. economists at their own game. The failure to do this is the biggest pitfall of many young people interested in free markets in general. They compete on margins they are bad at and unfortunately they have little success. I eschewed such a strategy and decided to be Austrian all the way … Without the backing of one’s committee it is difficult to find a job, so I recommend that students pick a school where their committee members will support them and allow them to be Austrian. (Stringham 2002)

According to Mark Thornton (1986, 8, 11), the historian of economic thought, David Colander, was ‘given the task of defending the mainstream’ at the ‘Southern Economics [sic] Association’ meeting: He initially characterized Austrians (and other ‘fringe’ economists) as parasites, only viable as long as they criticize the mainstream.

But there was an Austrian present, Jack High: ‘After a short lesson in the history of economic thought, Colander retreated from his position that the Austrians were parasites on the mainstream to describing the mainstream as a parasite on the Austrian School of Economics!’ The Habsburg chief of police explained: ‘His Majesty desires the purely monarchical and the purely catholic since they support and strengthen each other’ (cited by Seaman 1972, 45). After the fall of the Berlin Wall, ‘many’ of the 400-strong ‘Von Habsburg clan have staked claims to properties previously confiscated by the Communists’ (Watters 2005; Morgan 2011). The Habsburgs once ‘owned’ Spain and thus much of the New World (1516–1700) until they became extinct due to in-breeding. (The House of Lorraine acquired their name.) Their Spanish successors, the House of Bourbon, ‘lost’ their American property after Wars of Independence (1809–1821).45 After the ‘Great’ War, what Hayek (1978a) denigrated as a ‘republic of peasants and workers’ liberated themselves from the Habsburg-Lorraine

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Austrian Empire; and after a War of Independence (1919–1921), the Irish left the British Empire.46 Chaired by David O’Mahoney, Kirzner gave a talk at one of the Austrian ‘clusters’ (University College in Cork, Ireland) ‘centered around a theme to which much of his recent work has been devoted: the subjective nature of knowledge and the role of the entrepreneur in discovering and making use of such knowledge.’ Afterwards, he and Gerald O’Driscoll ‘spoke to a group of businessmen in London’ (Austrian Economics Newsletter 1978, 3). O’Mahoney was on the editorial board of the Review of Austrian Economics and Hayek’s ‘friend’ and MPS member.47 Ebeling (2014)—who rejoiced that there are ‘at least three scholarly economics journals devoted to the Austrian approach’—has been ‘fed’ in at least thirteen of these Austrian ‘clusters’: ‘Adjunct Instructor in Economics, Rutgers University,’ ‘Lecturer in Economics, National University of Ireland at Cork,’ ‘Assistant Professor of Economics, University of Dallas,’ ‘Professor of Economics Northwood University,’48 Shelby C. Davis Visiting Professor in American Economic History and Entrepreneurship at Trinity College, Hartford, Connecticut, Hillsdale College, CLS, FEE, IHS (‘Hayek Fellow’), the Mises Institute, Future of Freedom Foundation, the American Institute for Economic Research, and the Heartland Institute.49 Peter Calcagno (2002) obtained a B.S. from Hillsdale College and a Ph.D. from Auburn University and could ‘honestly say that I am where I am today because of Richard Ebeling. Richard became a mentor and a friend introducing me to Austrian economics and providing me with an understanding of the importance of economic principles. He helped me in choosing a graduate program and encouraged me to study and understand mainstream theory as well as Austrian theory.’ When Austrian Economic Newsletter stated: ‘It does seem that it is becoming easier for Austrians to get by,’ Calcagno (2002) responded: It does. I am not sure that we should go running up and down the halls shouting ‘I am an Austrian economist,’ but I do not think we should shy away from our interests.

In his Nobel Banquet speech, Hayek (1974b) perceptively predicted that the Prize ‘would tend to accentuate the swings of scientific fashion.’

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Ebeling (2014) reflected about the ‘logic of the political game in modern democracies. Since governments have the power to redistribute wealth and regulate market activities, it is inevitable that those who hope to gain from this process will try to eat at the trough [emphasis added] of government spending and control.’ Referring to ‘those writers on monetary affairs who happen to be on the payroll of the various associations for the destruction of our money,’ Hülsmann (2008, 14–15, n. 6) also reflected: This is of course not to deny that there might be good economists working for the IMF or the Federal Reserve. Our point is merely that their qualification to speak on the issue is not at all enhanced by their professional affiliation. Quite to the contrary, given the incentive structure, we would have to expect that good monetary economists only accidentally find their way to these institutions … Is it really necessary to point out the non sequitur implied in granting expert status in matters monetary to the employees of these organizations?

Hayek (1978a) complained that an ‘always steadily increasing part of the population did no longer learn in daily life the rules of the market on which our [emphasis added] civilization is based.’50 Outside the ‘free’ market, academic grades signal quality; and recommendations provide dispassionate assessments. Hayek received honorary degrees from universities in at least three military dictatorships: Chile, Argentina and Guatemala (where a private school has been established, Colegio Preparatorio Pre-Universitario Friedrich von Hayek  ). Hayek (1978b [1976], 303) denigrated those who emphasized the great superiority of central direction over the so-called ‘chaos of competition.’

In post-Mandela South Africa, President Jacob Zuma promoted ‘cadre development’—a euphemism for stacking the State with unqualified party loyalists. Rothbard (1978, 22) asked: ‘who make up the cadre, how is it generated, and what are the proper relations between cadre and various groups of noncadre? The cadre are simply the consistent

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libertarians. In the first place, libertarianism is a set of ideas, and hence the original cadre are bound to be largely intellectuals, people who are professional or semiprofessional dealers in abstract ideas. Mises and Hayek have pointed out how ideas filter out from original theoreticians to scholars and followers, to intellectuals as dealers in general ideas, and then to the interested public. Thus the body of intellectuals is of prime importance in influencing the general movement and, ultimately, the general public. It is to be hoped that the cadre begins as a tiny few and then grows in quantity and impact [Rothbard’s emphasis].’ Rothbard (1978, 22) proposed: First, we might put forward the concept of the ‘pyramid of ideology.’ For while ‘cadre’ and ‘noncadre’ may be a first approximation to the real world situation, the actual condition at any given time is akin to a pyramid, with the cadre at the top of the ideological pyramid as the consistent and uncompromising ideologists, and then with others at lower rungs, with varying degrees of approximation to a consistent and comprehensive libertarian vision. Since people usually become cadre by making their way up the various steps or stages of the pyramid - from totally nonlibertarian to completely libertarian - some rapidly, some slowly, this implies that the stages will assume a pyramid form, with a smaller number of people at each higher stage. The major task of the cadre, then, is to try to get as many people as high up the pyramid as possible. [Rothbard’s emphasis]

Charles Koch (1978, 30) approvingly quoted California Governor Jerry Brown: ‘I am really concerned that many businessmen are growing weary of the rigors of the free market.’ In ‘Strategies for a Libertarian Victory,’ Rothbard (1978, 23) asked: ‘If a person were a budding young scholar, he could go to graduate school and join the educational wings of the movement; but what if he was not?’ Rothbard (1994, 5) promoted the neo-feudal ‘spoils system’ (which was undermined by the civil service reforms that sought to allocate public service jobs on the basis of nonpartisan merit rather than patronage).51 And through fraudulent recommendations, Hayek (1978a) constructed an Austrian Welfare State for his academically unqualified disciples—in one instance, ennobling a library assistant without an undergraduate degree

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as ‘Dr.’ to allow him to become a full Professor of Economics at a North American university: ‘That I cannot reach the public I am fully aware. I need these intermediaries.’52 At NYU, ‘Dr. Leube’ is regarded as ‘brilliant.’53 After promoting Shenoy, Rizzo (SHOE 13 May 2014) reflected about his NYU students: ‘I guess this is more fun than grading exams or term papers at this time of the year.’ In Austrian Economics in America, GMU’s Karen Vaughn (1994, 66–67) diplomatically stated that during ‘most’ of the years of Mises’ NYU seminars, ‘Austrian economics seemed to stand for opposition to Keynesian economics and interventionist policy coupled with a steadfast belief in the superiority of free markets for economic prosperity an individual freedom. There were the issues that increasingly occupied Mises’ thought during the interwar period in Austria and Switzerland, and these were the issues that were central to Mises’ life in America.’ They were also the issues that ‘brought students to study with him’ at NYU. ‘Not surprisingly,’ Mises’ NYU seminar became ‘more a focal point for conservative and libertarian thought during the 1950s and 1960s than a training ground for contemporary economists.’ According to Mises (2009/1978 [1940], 79–80, 81–82), at the University of Vienna many professors could hardly be called ‘educated men.’ In Austria, there existed an ‘unbridgeable divide’ between the ‘vanishingly small group of Viennese intellectuals’ and the ‘masses of so-called educated people.’ In contrast, in his Privatseminar ‘We cultivated neither school, nor community, nor sect. It was through contradiction rather than agreement that we supported each other.’ But in ‘one thing we were united: in the desire to further the sciences of human action.’ Again diplomatically, Vaughn (1994, 66–67) reported that at NYU, Mises was ‘more the professor instructing the faithful students who treated him with corresponding reverence.’ His seminar ‘served less as a locus for active scholarly debate about economic theory than as a forum for Mises to impart his wisdom to a respectful audience.’ According to Boettke (2011a), ‘we have no better intellectual role models in this endeavor of constantly learning from professional peers than Mises and Hayek.’ ‘Free’ Market Believers (FMB) look at Knowledge, past (Kt-1), present (Kt), and future (Kt+1), and see Paradise,

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Salvation or Emergency; non-FMB do not. In Mises’ ‘free’ market for ‘sycophancy,’ did ‘demand’ dominate—as James Buchanan (1992, 190) observed—or supply? Koether (2000) appeared to explain that it was the supply of FMB sycophancy that drove the structure of Austrian ‘knowledge’: ‘We were all so awed by his intellect that what he hoped would be a seminar became, in fact, a lecture series.’ When asked by the Austrian Economic Newsletter ‘Which lectures by Mises got you hooked?’ Koether replied, ‘All of them’: it was his ‘great wisdom that endeared him to us.’ According to Koether (2000), ‘The first seminar took place in a large lecture hall and must have attracted many curiosity seekers. Shortly afterward, we were directed to a much smaller room where no more than fifteen or twenty students (apparently hand-picked by Mises) could attend.’ Laurence Moss (2005, 447) described what happened in the ‘free’ market to those with scientific curiosity: these 1960s NYU seminars consisted of a ‘motley collection of Mises’s friends, protectors, and benefactors. They formed a physical protective belt around Mises and stared down all who would dare to question or disbelieve.’ Richard Cornuelle reported that ‘The seminar wasn’t really a seminar. Mises would lecture, we’d sit around a table. He’d make a long, long statement but there was no give and take like in a real seminar, where everyone puts their cards on the table. Mises didn’t think that way, didn’t work that way. If you asked a question he’d just repeat that portion of the lecture he thought you didn’t quite grasp’ (cited by Doherty 2007). According to Bettina Greaves (1998), there were three types of people who came to Mises’ NYU seminar: students who ‘wanted an easy credit’; ‘more serious people’ like Rothbard, Kirzner and Hans Sennholz; and ‘people like me, George Koether, Mary Sennholz, and many others. We came and just got hooked.’ Whether supply or demand, Alfred Marshall’s scissors cut Mises off from genuinely diverse intellectual engagements. In addition, Margit Mises ‘shielded’ Mises ‘from the world so he could get his writing done.’ Neither Koether, nor Moss, nor Greaves mention the ‘basement’ that Mises was (Rothbardallegedly) forced to work in after he ‘escaped the Nazis.’ Rockwell (2007) promoted mythology: ‘Like his great teacher Mises, Rothbard’s views prevented him from getting a teaching position at a major

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American university. Finally he was hired by Brooklyn Polytechnic, an engineering school with no economics majors, where his department consisted of Keynesians and Marxists. He worked there, in a dark and dingy basement office.’54 But if low-status Keynesians and Marxists would tolerate Rothbard—why wouldn’t high-status academics? At the University of Vienna, Mises (2009/1978 [1940], 80) ‘administered the examinations in economics and finance in the state’s master examinations in the social sciences. The ignorance displayed by the candidates was devastating … One can thus imagine the average educational level of students.’ What Mises taught appears to be inconsistent with the process by which Central Banks operate. The Money Supply (M) is conventionally defined as C  +  D (Currency + Deposits); and the Monetary Base (MB)—the monetary liabilities of the Central Bank—consists of C + R (Currency + Reserves): • M = C + D • MB = C + R Central banks do not create money—they ‘pay’ for second-hand bonds with Reserves—which are not part of the Money Supply. Central Banks hope that the newly-created Reserves will be lent-out—but ‘competitive private industry’—commercial banks—decide who gets the loans. According to Austrian economists, ‘malinvestment’ and severe recessions will follow if Central Bank interest rates don’t reflect the personal time preferences of domestic savers—which are constantly being manipulated by those who fund them (e.g. the tobacco industry). From the tax-funded University of Nevada, Los Vegas, Hoppe (2014 [1995]) told Austrian Economics Newsletter: ‘Taxation is a present expropriation and an expected future expropriation … In the short run, I’m always better off ripping you off. Government institutionalizes the high-time-preference motivation to rip people off instead of producing.’ And ‘unlike trendy articles in the mainstream literature, Austrian works written from Menger to the present day claim universal and immutable scientific validity. It is this pure theory aspect of the Austrian School that gives us a huge advantage.’

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Like other Austrians, Hoppe (2014 [1995]) cannot distinguish between an accounting identity and a theorem: ‘I was surprised by the claims of people like Milton Friedman. He said that economic theorems have to be tested and cannot be known through deduction. But he would give examples like the quantity theory of money, which I always thought was true by definition: as more money is produced, the value of existing money relative to goods it can purchase falls, all else being equal. This is a statement of logic that does not need to be empirically tested to discover whether it is true.’ The Quantity Equation is a true-by-definition accounting identity because the unobservable Velocity (V) of Money (M) is whatever is required to make the left-hand side—nominal Income (Y), or real Income (y) multiplied by the Price (P) level—equal the right: • P·y = Y = M·V The relationship between M and P needs to be empirically investigated— during the Global Financial Crisis, the relationship became very weak. Salerno (1986)—the leading monetary economist of the Austrian School—appears to be unaware of the accounting identities than underpin monetary economics: any excess supply of fiat money does not go out of existence, but is spent and respent and continually passed on like a ‘hot potato’ throughout the economy until the surplus money is finally and fully absorbed by the resulting increase in general prices and in desired dollar holding.

Salerno’s Austrian ‘logic’ is i. Unlike any good produced in the market, including a commodity money, whose quantities are ultimately determined by the interaction of supply and demand, the quantity of government fiat money (but not its purchasing power) at any point is determined solely [emphasis added] by decisions of suppliers of the good, i.e. the government central banks, without respect to the desires and actions of the demanders.

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ii. The fact that money is routinely accepted as the final means of payment by all participants in the market means that fiat money can be literally lent and spent into existence regardless of the public’s existing demand for it. For example, if an additional quantity of Fed notes is printed up and spent by government [emphasis added] on various goods and services, an excess supply of money will temporarily be created in the economy. iii. The initial recipients of the new money will quickly get rid of the excess cash [emphasis added] simply by increasing their own spending on goods; those who eagerly receive the new money as payments in the second or later rounds of spending will do likewise, in the process bidding up the prices of goods, reducing the purchasing power of the dollar, and, consequently, increasing the quantities of dollars that each individual desires to keep on hand to meet expected future payments or for other purposes. With respect to (i), Central Banks create Reserves which are not part of the Money Supply. With respect to (ii), the US government is prohibited by law from selling bonds (debt) to the Federal Reserve: the Bureau of Engraving and Printing print Fed notes. And with respect to (iii), Reserves only becomes part of the Money Supply when banks create Deposits (issue loans). The ‘initial recipients’ of these deposits are those who have applied for and received loans from commercial banks. Non-Austrian economic theory is a constrained discovery process— it organizes and categorizes and allows implications to emerge. In contrast, Hayek (1999 [1977], 132) described the purpose of Austrian ‘theory’: ‘I have often had occasion to explain, but may never have stated in writing that I strongly believe that the chief task of the economic theorist or political philosopher should be to operate on public opinion to make politically possible what today may be political impossible.’ Hayek (1978a) saw policy outcomes as a battle between fashionable superstitions: ‘You know, I’m frankly trying to destroy the superstitious belief in our particular conception of democracy which we have now, which is certainly ultimately ideologically determined, but which has created without our knowing it an omnipotent government with really

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completely unlimited powers, and to recover the old tradition, which was only defeated by the modern superstitious democracy, that government needs limitations,’55 And ‘Government has always destroyed the monetary systems. It was tolerable so long as government was under the discipline of the gold standard, which prevented it from doing too much harm; but now the gold standard has irrevocably been destroyed, because, in part, I admit, it depended on certain superstitions which you cannot restore. I don’t think there’s any chance of getting good money again unless we take the monopoly of issuing money from government and hand it over to competitive private industry.’56 This message appeals to fear-promoting financial planners. Jerome Smith, for example, wrote The Coming Currency Collapse and What You Can Do About It (1980) in a ‘breathless two weeks.’ His advice: Hoarding durable goods not subject to obsolescence is only prudent, argues Smith, who figures that bedroom bureaus can become private banks if properly stuffed with ‘socks, underwear, belts, anything that doesn’t go out of style.’ Of course, he warns, ‘Don’t stock up on suits and dresses—they do change.’ He spends much of his time on his monthly newsletter, World Market Perspective, which has 30,000 subscribers, and on the Economic Research Counselors Center he opened in Vancouver 14 years ago. Although Smith dropped out of law school and developed much of his economic theory on his own, he still extols the benefits of education.57

Smith (1980, Acknowledgements) owes a ‘debt to the late Ludwig von Mises for most of my understanding of the underlying principles of human action involved herein; and also to several other laissez-faire Austrian school economists, most of whom were his students, and especially to Dr. Murray Rothbard and Dr. F.A. Hayek.’ In 1986, Rothbard, Reisman and Salerno were ‘Associate Editors’ of ‘Jerome Smith’s Investment Perspectives The Investment Advisory Newsletter Based on The Austrian School of Economics.’58 Salerno obtained a Ph.D. from Rutgers and became Academic Vice President of the Mises Institute, Professor of Economics at Pace University, and editor of the Quarterly Journal of Austrian Economics.59

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Mises had his own superstitious story to tell NYU students: In the last series of Mises’s lectures that I typed, he was speaking about the continual easing of money. He pointed out that when the quantity of money and credit is being increased, monetary authorities must decide who will get the new money first. Those who do are content; those who don’t are resentful. In any event, every such case of selective expansion must lead to economic distortion. We have seen the total collapse of some Asiatic economies when things got out of kilter. The monetary authorities don’t seem to have a clue as to how to manage the situation. (Greaves 1998)

Lloyd Reynolds (2003) described the market power (monopolistic competition) that ‘free’ market promoters seek: ‘The main thing is to just keep showing up. Among the young, who are the future, we have great promise. We have a differentiated product that is very attractive, and we are greatly helped by the aridity of mainstream economics. The truth is powerful and attractive. People do want to hear it.’ But ‘people’ didn’t want to receive an education: at NYU, Richard Cornuelle ‘didn’t take a degree, I just took Mises’ seminars. The first year I tried taking other courses, but then realized I was only interested in Mises. I stayed three years’ (cited by Doherty 2007). In private, Rothbard (2010 [1961], 22) insisted that intellectual work should be undertaken for purely ideological motives: Mises is teaching at a business school, with the result that his students are almost all low level, and when they graduate they do not teach or do research and thus do not have the ‘leverage effect’ which is the main purpose of furthering intellectual work.

Was Mises recruiting ‘useful idiots’ who could obtain an Ivy League degree by just ‘showing up’? According to Rothbard, Mises’ NYU students included ‘The Mongolian Idiot’ (Casey 2013, 10). Also according to Rothbard 1988 [1973], 106, n. 56), initially, Mises gave ‘every student an A. When told he could not do that, he alternatively gave students As and Bs depending on their alphabetical placement. When told he could not do that [emphasis in original], he settled on a policy of

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giving and A to any student who wrote a paper for the course, regardless of its quality and a B to everyone else.’ This allowed Wall Street brokers to obtain Ivy League academic qualifications as they slept throughout Mises’ NYU class (Doherty 2007, 212). But for fundraising purposes, Rothbard (December 1981) described Mises’ ‘brilliant teaching record’ (see above).60 Hayek (1978a) reported that his Law, Legislation and Liberty (2013 [1973–1979]) had been written in response to his discovery that ‘nineteenth-century liberals had no answers to certain questions … I was now tackling problems which had not been tackled before. I was not merely restating, as I thought, in an improved form what was traditional doctrine; I was tackling new problems, including the problem of democracy.’61 Mises (2009/1978 [1940], 55) described the ‘evil’ of democracy: ‘It has been said that the problem lay within the realms of public education and public information. But we are badly deceived if we believe that the right opinions will claim victory through the circulation of books and journals and with more schools and lectures; such means can also attract followers of faulty doctrines. Evil consists precisely in the fact that the masses are not intellectually enabled to choose the means leading to their desired objectives. That ready judgments can be foisted onto the people through the power of suggestion demonstrates that the people are not capable of making independent decisions. Herein lies the great danger. Thus had I arrived at the hopeless pessimism that had long pervaded the best minds of Europe [emphases added].’ Mises (2009/1978 [1940], 55) combined apodictic faith with pretentious displays of high-status erudition: Ludo Hartmann, Max Weber and Alfred Frances Pribram ‘were so steeped in historicism that it was difficult for them to recognize that my position was correct … Pribram remained faithful to his quietism and agnosticism. Of him one could say what Goethe said about the Sphinx’: Sitzen vor den Pyramiden Zu der Völker Hochgericht, Übershwemmungen, Krieg and Frieden Und verziehen kein Gesicht.62

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As Americans debate whether to relocate their Confederate statues to museums, at Alabama’s public Auburn University a statue was erected to (and an Institute named after) a card-carrying Austro-Fascist and promoter of ‘Ludendorff and Hitler.’ Rockwell (2007) reported that in 1986, Rothbard (thanks to ‘free-market businessman S.J. Hall’) was offered a ‘distinguished’ professorship of economics at the University of Nevada, Las Vegas. In 2017, Las Vegas became the scene of America’s worst sole-shooter terrorist attack. At the public university in Las Vegas, Rothbard (1993) celebrated the first bombing of the World Trade Centre—and, in effect, became a spotter for Al Qaida (Chapter 6, above). According to Rothbard (1990, 5), at the University of Las Vegas, Nevada, ‘Austrians are at the top of their classes.’ What type of ideology was Rothbard rewarding? Who did Rothbard—the Mises Institute Academic Vice President—provide recommendations for? Mises was a ‘Distinguished Fellow’ of the American Economic Association.63 How many of his ‘straight A’ students became Austrian ‘Professors of Economics’? To protect the employment prospects of their members, the AEA, the Royal Economic Society and other professional bodies should formally investigate this ‘free’ market for academic jobs.

Notes 1. https://www.cdc.gov/tobacco/data_statistics/sgr/2001/highlights/ marketing/. 2. CLS Archives Box 1.2. 3. http://www.npr.org/sections/health-shots/2016/11/28/502566553/ trump-chooses-rep-tom-price-an-obamacare-foe-to-run-hhs. 4. https://www.youtube.com/watch?v=wM5-PAH0ukg. https://www.youtube.com/watch?v=DfmDGW05W90. 5. http://www.politico.com/story/2017/09/21/tom-price-private-charterplane-flights-242989. 6. https://www.heartland.org/about-us/reply-to-critics/index.html. 7. https://www.heartland.org/about-us/who-we-are/richard-ebeling. 8. In the early 1970s, Martin was instrumental in setting up the Federal Home Loan Mortgage Corporation (Freddie Mac), the

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government-sponsored agency that bought mortgages and packaged them for sale to investors; he was also one of the principal designers of the adjustable-rate mortgage during his tenure as California Savings and Loan Commissioner. Martin was a Reagan loyalist who challenged Chairman Volcker’s hawkish anti-inflation policies. In February 1986, he led a group of four Reagan-appointed Fed governors who voted to cut a key interest rate against Volcker’s wishes. The vote was reversed when Volcker threatened to resign and the White House was obliged to intervene (Zuckerman 2007). 9. https://www.heartland.org/about-us/who-we-are/thomas-dilorenzo. 10. http://www.legacy.com/obituaries/sfgate/obituary.aspx?pid=181348612. 11. MPS Archives Box 92. 12. https://www.montpelerin.org/statement-of-aims/. 13. http://wvutoday-archive.wvu.edu/n/2014/02/24/wvu-business-schoolto-create-center-for-free-enterprise-with-5-million-in-gifts.html. 14. http://polluterwatch.org/charles-koch-university-funding-database. 15. http://rdc1.net/vita.pdf. 16. http://sciencecorruption.com/ATN167/01712.html. 17. Davenport Archives Box 37.6. 18. 1981 and 1983 MPS Members Directory. Davenport Archives Box 23.3. 19. https://www.sanders.senate.gov/koch-brothers. 20. The present writer detected a similar cult-like atmosphere while delivering a seminar to the GMU Ph.D. program. 21. In 1954, after a visit to Cornell University organized by Harper, Fisher’s smuggled twenty-four White Rock eggs into Britain and started Buxted Chickens (Hoplin and Robinson 2008, 154). 22. ‘Businessmen have always been anxious to convince a gullible public and an opportunistic Congress that the free market cannot work efficiently in their industry, that some governmental planning and regulations would be in the “public interest.” Indeed, much of the government regulation which plagues us today has come only after businesses have begged and lobbied for it. Nearly every major piece of interventionist legislation since 1887 has been supported by important segments of the business community [Koch’s emphases].’ 23. Friedrich Hayek interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/).

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24. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). Three decades before, Hayek (1949, 432–433) had described the ‘inferior calibre … mediocrities’ who promoted his agenda (Chapter 3, above). 25. http://austrianeconomists.typepad.com/weblog/2009/08/setting-therecord-straight-on-austropunkism-and-the-sociology-of-the-austrianschool-of-economics.html. 26. Prychito was given a $1800 Earhart Fellowship. MPS Archives Box 108. 27. MPS Archives Box 110. 28. MPS Archives Box 108. 29. https://www.mercatus.org/richard-fink. 30. https://www.jbs.org/about-jbs/fred-koch. 31. https://twitter.com/BackOnTrackUSA/status/627842506269569024. 32. Hayek Archives Box 27.6. 33. http://austrianeconomists.typepad.com/weblog/2007/03/austrian_ vices_.html. 34. ‘How dare Crane make my stand within the LP a criterion for my continued shareholder or board membership at Cato?’ 35. CLS Archives Box 4.9. 36. CLS Archives Box 4.9. 37. MPS Archives Box 46.1. 38. Niskanen added: ‘but that won’t happen and does not provide guidance about what, if anything, should be put in its place.’ 39. MPS Archives Box 45.9. 40. https://www.cato.org/news-releases/2011/10/26/william-niskanen-formerreagan-economist-cato-board-chair-dead-78. 41. https://www.ufm.edu/index.php/Honorary_Doctoral_Degrees#In_ Business. 42. MPS Archives Box 82. 43. MPS Archives Box 45.9. 44. MPS Archives Box 2.2. 45. Cuba and Puerto Rico remained under Spanish rule until the 1898 Spanish-American War. 46. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/).

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47. http://libertystory.net/LSTHINKHAYEKLIFE.htm. 48. MPS member Howard E. Kershner, of Christian Freedom Foundation, the publisher of Christian Economics, lectured in economics at the Northwood Institute which became Northwood University (Fowler 1990). 49. http://www.citadel.edu/root/images/business_administration/2016_ faculty_cvs/ebeling_cv_2016.doc.pdf. 50. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 51. Rothbard (1994, 5) described the ‘spoils system’ as ‘genuine democracy in government’ installed by Jacksonian Democrats in the US, and ‘continued until the goo-goo civil service reformers began to encroach upon the throw-out-the-rascals process in the 1880.’ It ‘really means allowing the voters to kick out bureaucrats they don’t like.’ 52. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 53. Kirzner (2 October 1984) to ‘Dr’ Leube. MPS Archives Box 47.2. 54. Hoppe (2017) mentions no basement—it was a ‘small, grungy and windowless office that he had to share with a history professor.’ 55. Friedrich Hayek interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 56. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 57. http://people.com/archive/these-bad-news-bears-are-bullish-on-gloomand-doom-and-best-sellers-vol-15-no-18/. 58. MPS Archives Box 2.7. 59. https://mises.org/profile/joseph-t-salerno. 60. At Johns Hopkins University, the MPS member and former Wehrmacht officer, Gottfried Dietze (who organized part of Hayek’s 1975 tour of the US and was opposed to majoritarian democracy and civil rights legislation), is remembered (perhaps unfairly) for setting identical examination questions throughout his teaching career and for awarding top marks for those who answered with verbatim quotes from the footnotes of his books. The fraternities reportedly supplied model answers to their ‘brothers.’

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61. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 62. Mises’ editor was obliged to add a translation: ‘Sitting in front of the Pyramids, In the people’s highest court, Floods and war and peace, Without change in facial expression.’ 63. https://www.aeaweb.org/about-aea/honors-awards/distinguished-fellows.

References Archival Insights into the Evolution of Economics (and Related Projects) Leeson, R. (2018). Hayek: A Collaborative Biography Part VIII The Constitution of Liberty: ‘Shooting in Cold Blood’ Hayek’s Plan for the Future of Democracy. Basingstoke: Palgrave Macmillan.

Other References Allison, J. (2015). The Leadership Crisis and the Free Market Cure. New York: McGraw Hill. Austrian Economics Newsletter. (1978). CLS Summer Fellow, 1(3). Batemarco, R. (1995, June 1). Three Fallacies of Rent Control. The Freeman. https://fee.org/articles/three-fallacies-of-rent-control/. Bennett, J., & Johnson, M. H. (1981). Better Government at Half the Price: Private Production of Public Services. Ottawa, IL: Caroline House. Block, W. (2008). Labor Economics from a Free Market Perspective Employing the Unemployable. Hackensack, NJ: World Scientific. Boettke, P. J. (1995). Book Review of Yuri N. Maltsev (Ed.) Requiem for Marx. Austrian Economics Newsletter, 15 (summer), 5–6. Boettke, P. J. (2007). The Economics of Atlas Shrugged. In E. W. Younkins (Ed.), Ayn Rand’s Atlas Shrugged: A Philosophical and Literary Companion. New York: Routledge. Boettke, P. J. (2009, August 19). Human Action: The Treatise in Economics. FEE. https://fee.org/articles/human-action-the-treatise-in-economics/.

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Boettke, P. J. (2010, January 25). Exclusive Interview. Peter Boettke: The Transformative Rise of Austrian Economics By Anthony Wile. Daily Bell. http://www.thedailybell.com/exclusive-interviews/anthony-wile-peterboettke-the-transformative-rise-of-austrian-economics/. Boettke, P. J. (2011a, December 6). Thank You Alex for the Corrective to Krugman and Warsh. Coordination Problem. http://www.coordinationproblem.org/2011/12/thank-you-alex-for-the-corrective-to-krugman-and-warsh. html. Boettke, P. J. (2011b). Teaching Austrian Economics to Graduate Students. Journal of Economics and Finance Education, 10(2), 19–30. http://www. economics-finance.org/jefe/econ/special-issue/Special%20Issue%20AE%20 003%20Boettke-Abstract.pdf. Boettke, P. J., Horwitz, S., & Prychito, D. (1986). Austrian Tradition. Market Process Fall 42.2. MPS Archives Box 44.4. Buchanan, J. (1992). I Did Not Call Him ‘Fritz’: Personal Recollections of Professor F. A. v. Hayek. Constitutional Political Economy, 3(2), 129–135. Calcagno, P. (2002). The New Generation: Part 1 (Edward Stringham, Shawn Ritenour, Peter Calcagno). Austrian Economic Newsletter, 2(2). https://mises. org/library/new-generation-part-1-edward-stringham-shawn-ritenour-petercalcagno. Casey, G. (2013). Murray Rothbard Major Conservative and Libertarian Thinkers (Vol. 15). New York: Bloomsbury. Chilton, M. (2016, January 21). How the CIA brought Animal Farm to the screen. Daily Telegraph. http://www.telegraph.co.uk/books/authors/ how-cia-brought-animal-farm-to-the-screen/. Confessore, N. (2014, May 17). Quixotic ’80 Campaign Gave Birth to Kochs’ Powerful Network. New York Times. https://www.nytimes.com/2014/05/18/ us/politics/quixotic-80-campaign-gave-birth-to-kochs-powerful-network. html. Coppin, C. A. (1990, May 1). John Arbuckle: Entrepreneur, Trust Buster, Humanitarian. FEE. https://fee.org/articles/john-arbuckle-entrepreneurtrust-buster-humanitarian/. Coppin, C. A., & High, J. (1999). The Politics of Purity: Harvey Washington Wiley and the Origins of Federal Food Policy. Ann Arbor: University of Michigan Press. Davenport, J. (1983, October 1). Why Not Deregulate Labor? FEE. https://fee. org/articles/why-not-deregulate-labor/.

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de Ampuero, D. (2010). How I became a Liberal. In W. Block (Ed.), I Chose Liberty: Autobiographies of Contemporary Libertarians. Auburn, AL: Ludwig von Mises Institute. Dickinson, T. (2014, September 24). Inside the Koch Brothers Toxic Empire. Rolling Stone. http://www.rollingstone.com/politics/news/inside-the-kochbrothers-toxic-empire-20140924. DiLorenzo, T. (1999). The Practical Science of Austrian Economics: An Interview with Thomas J. DiLorenzo. Austrian Economics Newsletter, 19(4) (Winter). https://mises.org/library/practical-science-austrian-economicsinterview-thomas-j-dilorenzo. Doherty, B. (2007). Radicals for Capitalism: A Freewheeling History of the Modern. American Libertarian Movement. New York: Public Affairs. Dorsey, C. (2011). Southern West Virginia and the Struggle for Modernity. Jefferson, NC: McFarland. Ebeling, R. M. (2014, February 16). Exclusive Interview, Gold & Silver. Richard Ebeling on Austrian Economics, Economic Freedom and the Trends of the Future. Daily Bell. http://www.thedailybell.com/gold-silver/ anthony-wile-richard-ebeling-on-austrian-economics-economic-freedomand-the-trends-of-the-future/. Epstein, G. (2011, April 7). Murray, My Intellectual Mentor. Mises Daily. https://mises.org/library/murray-my-intellectual-mentor. Evans, K. (2010, August 28). Spreading Hayek, Spurning Keynes. Professor Leads an Austrian Revival. Wall Street Journal. Fallin, A., Grana, R., & Glantz, S. A. (2013, February 08). ‘To Quarterback Behind the Scenes, Third-Party Efforts’: The Tobacco Industry and the Tea Party. Tobacco Control. Published Online First. https://doi.org/10.1136/ tobaccocontrol-2012-050815. Farnham, T. W. (2012, March 3). Koch Brothers Sue for Control of Cato Institute. Washington Post. https://www.washingtonpost.com/politics/kochbrothers-sue-for-control-of-catoinstitute/2012/03/02/gIQAHQ9XpR_ story.html?utm_term=.ed033bc01dd8. Fink, R. (1986). Economist wins Nobel prize for blowing politicians’ cover. Mimeo. Fowler, G. (1990, January 3). H. E. Kershner, 98, A Longtime Worker In Children’s Causes. New York Times. http://www.nytimes.com/1990/01/03/ obituaries/h-e-kershner-98-a-longtime-worker-in-children-s-causes.html. Frame, J. (1987). The Doctrine of the Knowledge of God (Theology of Lordship). Philadelphia: Presbyterian & Reformed.

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Gildenhuys, J. S. H. (2004). The Philosophy of Public Administration—A Holistic Approach: An Introduction for Undergraduates. Stellenbosch: Sun Books. Goldman, A. (2010, July 25). The Billionaire’s Party—David Koch is New York’s Second-Richest Man, A Celebrated Patron of the Arts, and the Tea Party’s Wallet. New York. http://nymag.com/news/features/67285/index1. html. Greaves, B. (1998). Mises’s Bibliographer: An Interview with Bettina Bien Greaves. Austrian Economics Newsletter, 18(4). https://mises.org/library/ misess-bibliographer-interview-bettina-bien-greaves. Greaves, P. (1971). On Behalf of Profits. In F. A. Hayek, L. Read, H. Hazlitt, F. A. Harper, & G. Velasco (Eds.), Towards Liberty Essays in Honor of Ludwig von Mises (Vol. 2). Menlo Park: Institute for Humane Studies. Grinder, W. (1977, July). Crosscurrents. Libertarian Review. https://www.libertarianism.org/lr/LR777.pdf. Harberger, A. C. (1999, March). Interview with Arnold Harberger. An Interview with the Dean of the ‘Chicago Boys.’ The Region. The Federal Reserve Bank of Minneapolis. https://www.minneapolisfed.org/ publications/the-region/interview-with-arnold-harberger. Hayek, F. A. (1949). The Intellectuals and Socialism. University of Chicago Law Review, 16(3), 417–433. Hayek, F. A. (1974a, December 11). The Pretence of Knowledge. https://www. nobelprize.org/nobel_prizes/economic-sciences/laureates/1974/hayek-lecture.html. Hayek, F. A. (1974b, December 10). Banquet Speech. http://www.nobelprize. org/nobel_prizes/economic-sciences/laureates/1974/hayek-speech.html. Hayek, F. A. (1978a). Oral History Interviews. Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library. ucla.edu/. Hayek, F. A. (1978b). New Studies in Philosophy, Politics, Economics and the History of Ideas. London: Routledge & Kegan Paul. Hayek, F. A. (1999). Good Money, Part 1. The New World. The Collected Works of F. A. Hayek (S. Kresge, Ed.). London: Routledge. Hayek, F. A. (2013). Law, Legislation and Liberty. London: Routledge. Hilts, P. (1994, April 15). Tobacco Chiefs Say Cigarettes Aren’t Addictive. New York Times. http://www.nytimes.com/1994/04/15/us/tobacco-chiefs-saycigarettes-aren-t-addictive.html?pagewanted=all.

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Hoplin, N., & Robinson, R. (2008). Funding Fathers: The Unsung Heroes of the Conservative Movement. New York: Regency. Hoppe, H.-H. (2014 [1995]). The Private Property Order: An Interview with Hans-Hermann Hoppe. Austrian Economic Newsletter, 18(1). https://mises. org/library/private-property-order-interview-hans-hermann-hoppe. Hoppe, H.-H. (2017, October 7). Coming of Age With Murray. Mises Institute’s 35th Anniversary Celebration in New York City. https://mises. org/library/coming-age-murray-0. Hülsmann, J. G. (2007). Mises: The Last Knight of Liberalism. Auburn, AL: Ludwig von Mises Institute. Hülsmann, J. G. (2008). Deflation and Liberty. Auburn, AL: Ludwig von Mises Institute. Hunt, E. H. (1974). Undercover: Memoirs of an American Secret Agent. New York: G. P. Putnam’s Sons. Koch, C. (1978, August). The Business Community: Resisting Regulation. Libertarian Review, 7(7), 30–34. https://www.libertarianism.org/lr/LR788. pdf. Koch, C. (2007). The Science of Success: How Market-Based Management Built the World’s Largest Private Company. New York: John Wiley & Sons. Koch, C. (2014, April 2). I’m Fighting to Restore a Free Society. The Wall Street Journal. https://www.wsj.com/articles/charles-koch-im-fighting-to-restorea-free-society-1396471508. Koether, G. 2000. A Life Among Austrians. Austrian Economics Newsletter, 20(3). https://mises.org/system/tdf/aen20_3_1_0.pdf?file=1&type=document. Leonard, C. (2017, July 2). How the Koch Brothers Do Business and Make Money Away from Politics. Australian Financial Review. http://www.afr. com/business/manufacturing/how-the-koch-brothers-do-business-andmake-money-away-from-politics-20170702-gx30nt. Lewis, C., Holmberg, E., Campbell, L., & Beyoud, A. G. (2013, July 1). Koch Millions Spread Influence Through Nonprofits, Colleges. Investigative Reporting Workshop. http://investigativereportingworkshop. org/investigations/the_koch_club/story/Koch_millions_spread_influence_ through_nonprofits/. Major, B. (2017, November 7). Hayek’s Economics Society Enters The Digital Era With A Bang. Peter Boetke Brings a Fresh Perspective and Wide Range of Talent to the Prestigious Mont Pelerin Society, an Economic Powerhouse Among the Intelligentsia. The Federalist. https://thefederalist. com/2016/11/07/hayeks-economics-society-enters-digital-era-bang/.

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Martin, A. (2009, August 1). Give BB&T Liberty, But Not a Bailout. New York Times. http://www.nytimes.com/2009/08/02/business/02bbt.html?_r= 5&pagewanted=all. Martin, A. (2010, September). The Analects of Boettke. Journal of Private Enterprise, 26(1), 125–141. Mayer, J. (2010, August 30). Covert Operations: The Billionaire Brothers Who Are Waging a War Against Obama. New Yorker. https://www.newyorker. com/magazine/2010/08/30/covert-operations. Mayer, J. (2016). Dark Money: The Hidden History of the Billionaires Behind the Rise of the Radical Right. New York: Penguin. McLean, I., & Johnes, M. (2000). Aberfan—Government and Disaster. Cardiff: Welsh Academic Press. McMaken, R. (2014, April 24). Our Oligarchs Can Thank James Madison. Mises Daily. https://mises.org/library/our-oligarchs-can-thank-james-madison. Meier, B. (2011, January 18). Vocal Physicians Group Renews Health Law Fight. New York Times. http://www.nytimes.com/2011/01/19/business/ 19physicians.html. Millman, O. (2017, April 14). Scott Pruitt Hails Era of Environmental Deregulation in Speech at Coal Mine. Guardian. https://www.theguardian.com/environment/2017/apr/13/scott-pruitt-epa-coal-miningderegulation-speech. Mises, L. (1912). Theorie des Geldes und der Umlaufsmittel. Munich: Duncker and Humblot. Mises, L. (1922). Die Gemeinwirtschaft: Untersuchungen über den Sozialismus. Jena: Gustav Fischer Verlag. http://docs.mises.de/Mises/Mises_Gemeinwirtschaft. pdf. Mises, L. (1951 [1932]). Socialism: An Economic and Sociological Analysis (J. Kahane, Trans.). New Haven: Yale University Press. Mises, L. (2008). Profit and Loss. Auburn, AL: Ludwig von Mises Institute. Mises, L. (2009/1978 [1940]). Memoirs. Auburn, AL: Ludwig von Mises Institute. Morgan, L. (2011, July 18). End of a royal dynasty as Otto von Habsburg is Laid to Rest… with His Heart Buried in a Crypt 85 Miles Away. MailOnline. Moss, L. (2005). Richard A. Musgrave and Ludwig von Mises: Two Cases of Emigrè Economists in America. Journal of the History of Economic Thought, 20(1), 443–450.

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Mueller, M. (1978, August). Towards a Libertarian Theory of Revolution. Libertarian Review, 7(7), 14–17. https://www.libertarianism.org/lr/LR788. pdf. Mueller, M. (1979, April). The Movement. Libertarian Review. https://www. libertarianism.org/lr/LR794.pdf. New York Times. (1966, June 30). New Power in A.M.A. Niskanen, W. (1990). Environmental Policy: A Time for Reflection. Regulation 1: 9–11. https://object.cato.org/sites/cato.org/files/serials/files/regulation/1994/1/ v17n1-2.pdf. North, G. K. (1986a). Editor’s Introduction to Robert L. Thoburn’s The Children’s Trap The Biblical Blueprint for Education. Tyler, TX: Dominion Press. https://www.garynorth.com/freebooks/docs/pdf/the_children_trap.pdf. North, G. K. (1986b). Foreword to Ian Hodge’s Baptized Inflation: A Critique of ‘Christian’ Keynesianism. Tyler, TX: Institute of Christian Economics. North, G. K. (2016, July 2). The Economics of Perversion. https://www. garynorth.com/public/15320.cfm. Oliphant, J. (2017, June 27). The Conservative Koch Brothers’ Network is Warming to Trump. Business Insider. http://www.businessinsider.com/r-onceon-the-outside-conservative-koch-network-warms-to-trump-2017-6?IR=T. Orwell, G. (1945). Animal Farm a Fairy Story. London: Secker and Warburg. Pacyga, D. A. (2015). Slaughterhouse: Chicago’s Union Stock Yard and the World It Made. Chicago: University of Chicago Press. Reynolds, M. (2003). Labor and the Austrian School. Austrian Economic Newsletter (summer). https://mises.org/library/labor-and-austrian-school. Robbins, J. (2010). The Sine Qua Non of Enduring Freedom. The Trinity Review 295. http://www.trinityfoundation.org/PDF/The%20Trinity%20 Review%2000295%20SineQuaNonEnduringFreedom.pdf. Rockwell, L. H., Jr. (1990, May 3). Tobacco Is a Dirty Weed; I Like It. Los Angeles Times. http://articles.latimes.com/1990-05-03/local/me-20_1_tobaccoindustry. Rockwell, L. H., Jr. (2007, August). Three Economists who are National Treasures. The Free Market 5(8). https://mises.org/library/three-economistswho-are-national-treasures. Rothbard, M. N. (1978, August). Strategies for a Libertarian Victory. Libertarian Review, 7(7), 18–24, 34. https://www.libertarianism.org/lr/ LR788.pdf. Rothbard, M. N. (1980, September–December). The Clark Campaign: Never Again. Libertarian Forum.

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Rothbard, M. N. (1981, January–April). It Usually Ends With Ed Crane. Libertarian Forum, 14, 1–2. https://www.lewrockwell.com/1970/01/murray-nrothbard/it-usually-ends-with-ed-crane/. Rothbard, M. N. (1988). The Essential Von Mises. Auburn, AL: Ludwig von Mises Institute. Rothbard, M. N. (1990). A Conversation with Murray N. Rothbard. Austrian Economics Newsletter, 2(2). https://mises.org/library/rothbard-reader/html/c/368. Rothbard, M. N. (1993, August). Who Are the Terrorists? (Rothbard Rockwell Rep. No. 4.8). http://www.unz.org/Pub/RothbardRockwellReport-1993aug00001. Rothbard, M. N. (1994, July). Revolution in Italy! (Rothbard Rockwell Rep. No. 5.7), 1–10. http://www.unz.org/Pub/RothbardRockwellReport-1994jul00001. Rothbard, M. N. (2010). Strictly Confidential: The Private Volker Fund Memos of Murray N. Rothbard (D. Gordon, Ed.). Auburn, AL: Ludwig von Mises Institute. Salerno, J. (1986). The ‘true’ Money Supply: A Measure of the Supply of the Medium of Exchange in the US Economy. Austrian Economic Newsletter (spring). https://mises.org/system/tdf/aen6_4_1_0.pdf?file=1&type=document. Schotter, A. (1985). Free Market Economics: A Critical Appraisal. New York: Macmillan. Schulman, D. (2014). Sons of Wichita: How the Koch Brothers Became America’s Most Powerful and Private Dynasty. New York: Grand Central Publishing. Seaman, L. C. B. (1972). From Vienna to Versailles. London: Meuthen. Skousen, M. (2000, December). Dr. Jekyll and Mr. Robhard. Inside Liberty, 14(12), 52–53. http://mises.org/journals/liberty/Liberty_Magazine_December_ 2000.pdf. Smith, J. (1980). The Coming Currency Collapse and What You Can Do About It. San José, Costa Rica: Griffin Publishing Company. Stewart, J. B. (2017, July 13). As a Guru, Ayn Rand May Have Limits. Ask Travis Kalanick. New York Times. https://www.nytimes.com/2017/07/13/ business/ayn-rand-business-politics-uber-kalanick.html. Stringham, E. (2002). The New Generation: Part 1 (Edward Stringham, Shawn Ritenour, Peter Calcagno). Austrian Economic Newsletter, 2(2). https://mises. org/library/new-generation-part-1-edward-stringham-shawn-ritenour-petercalcagno. Sublett, S. (1987, July 30). Libertarians’ Storied Guru. Washington Times. MPS Archives Box 45.7.

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Thornton, M. (1986). Southern Economics Association—1986. Austrian Economic Newsletter (spring). https://mises.org/system/tdf/aen6_4_1_0.pdf?file=1&type= document. Vaughn, K. (1994). Austrian Economic in America. Cambridge: Cambridge University Press. Vaughn, K. I. (2015). How James Buchanan Came to George Mason University. The Journal of Private Enterprise, 30(2), 103–109. Vogel, K. (2017, August 4). Pence to Speak at Conservatives’ Meeting Organized by Koch Brothers. New York Times. https://www.nytimes. com/2017/08/04/us/politics/pence-koch-conservatives-americans-for-prosperity.html. Watters, S. (2005, June 28). Von Habsburg on Presidents, Monarchs, Dictators. Women’s Wear Daily. http://www.wwd.com/eye/people/von-habsburg-onpresidents-monarchs-dictators. Zuckerman, S. (2007, June 1). Preston Martin—ex-Fed Vice Chair. San Francisco Chronicle. http://www.sfgate.com/bayarea/article/.

8 Mises’ ‘Evil Seed’ of Christianity

Carver (1949, 241) reported that through the influence of ‘Mullendore, Read, Watts, and myself,’ the Los Angeles Chamber of Commerce became the ‘spearhead of an active crusade for the return to the principle of freedom of enterprise. That enterprise seems to have made an impression, since nearly everyone now (1947) talks in favour of free enterprise and against the police state. If I had something to do with starting Mullendore, Read, and Watts on this crusade, it may turn out to be the most important work of my life.’ The founder and President of The Future of Freedom Foundation explained that it was Read’s ‘uncompromising, moral defense of liberty which ultimately changed the course of my life’ (Hornberger 1988). Jacob Hornberger (1988) found ‘one aspect of Read’s writings very disconcerting. Underlying his entire philosophy was a belief in God. I simply could not understand how such an intelligent person, who had such brilliant insights into political theory, could actually believe such nonsense. Becoming quite exasperated with Read’s conviction on this matter, I finally decided to investigate. It was not long after I began reading the Gospels that I discovered that Read was right about this aspect of life as well.’ © The Author(s) 2018 R. Leeson, Hayek: A Collaborative Biography, Archival Insights into the Evolution of Economics, https://doi.org/10.1007/978-3-319-77428-2_8

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Referring to an academic fraud, Samuel Bostaph (SHOE 15 May 2014)—Texas Christian University graduate, Mises Institute Fellow and ‘Ph.D. Professor Emeritus of Economics University of Dallas’— described Austrian faith-logic: ‘Sudha Shenoy was the daughter of prominent Indian economist Bellikot [sic] Shenoy and an economic historian on the faculty of the University of Newcastle in Australia for many years. I knew her personally and what I have read of her works shows careful scholarship.’ Adolescents are drawn towards the ‘free’ market via Rand’s fictional and narcissistic heroes. Hornberger (2001) described his own journey to ‘liberty’: he was ‘single, 50, Catholic,’ had a ‘well-worn copy of Cooking for Dummies’ and Ebeling ‘became my best friend and gave me a private tutorial in Mises’s Human Action. Also, Sam Bostaph, head of the economics department at the University of Dallas, gave me a private tutorial in classical economics … it was Bostaph and Ebeling who gave me a sound foundation in economics.’ A ‘big seed was planted when I was in law school. I was watching a [sic] afternoon movie on television entitled, The Fountainhead, and was stunned. I bought the book and it had a big impact on me.’ According to Choosing the Right College, published by the Buckleyfounded Intercollegiate Studies Institute (ISI), the University of Dallas is ‘one of the few genuinely countercultural universities in the nation,’ where students are ‘taught to see freedom not as an opportunity for self-aggrandizement, but as the ability to pursue truth, goodness and beauty’ (cited by Honan 1998). Its motto is: ‘The Catholic University for Independent Thinkers.’1 The ‘free’ market has colonized several university departments: William Hutt, for example, was employed at both California State College (later University), Hayward, and the University of Dallas.2 With a Ph.D. from Auburn University and a Professorship of Economics at Grove City College, Shawn Ritenour (2002) described his ‘dream project?’ I’ll be starting it soon: a principles of economics text from a distinctively Christian perspective. It seeks to place economics in the context of the

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Christian view of man made in the image of God, and who can thus think and act purposefully. I also would like to do an extended study on the issue of art, culture, and the free market.

According to Ritenour (2002), The field of religion and economics is starting to make real inroads in the profession. Even in the history of thought, economic theory was first advanced by trained theologians. The Positivists have their own religious ideas, inherited from those who sought to create a ‘religion of humanity.’ Economics is a formal, theoretical science. However, because it focuses on the actions of humans, it is also heavily bound up with questions about morality, culture, and faith. This is especially true in the area of ­economic policy. Austrians have always been on the cutting edge, so why not here as well?

At Southwest Baptist University, Ritenour (2007) produced a biographical essay on Röpke which asserted that his ‘1931 analysis of fascist economics, published under the pseudonym Ulrich Unfried, protested against anti-capitalist intellectuals who were using the world-wide depression to pave the way for national socialism.’ Yet Ritenour failed to mention the role that the Hayek and Mises had played in promoting the deflation that paved the way for National Socialism. How does the ‘free’ market operate? Röpke recruited Mises to Geneva in 1934 and in 1961 succeeded Hayek as MPS President. Röpke (1962) then resigned from the Society—along with two other foundation members (Hunold and Brandt) because of its ‘internal warfare’—he had been ‘insidiously attacked’ and ‘some members only stopped short of physical violence to retain me in my own [hotel] room and to prevent me from closing officially the annual meeting.’ According to the January 1962 Mont Pelerin Society Quarterly, President Hayek had prevented the Society’s Vice President from reading a ‘Happy Birthday’ message from President-elect Röpke on the occasion of Mises’ 80th birthday dinner.3 What would happen to religious liberty if the ‘free’ market ruled? Rand ‘grilled’ Joey Rothbard on the

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reasons for her religious faith and suggested that she read a pamphlet put out by the Randians that ‘disproved’ the existence of God. When Joey refused to recant her heresy, Murray was told that he had better find himself a more ‘rational’ mate. That was enough for Murray. The break was finalized by his formal ‘trial’ held by the Randian Senior Collective, which Murray declined to attend.4

Or intellectual dissent? Chamberlain (1987) ended a ‘perfectly ­laudatory review’ of Atlas Shrugged with the suggestion that she should have stuck to the story instead of trying to rewrite the Sermon on the Mount. She hated that. I saw her at a party, and she cut me absolutely dead.

In Faith & Economics, the journal of the Association of Christian Economists, Laurence R. Iannaccone (2005, 4, 6) described ‘free’ market academic freedom: ‘as a faculty member at George Mason University, I am contractually bound to sing the praises of Public Choice.’ He was aiming (and praying) for nothing less than a new and self-sustaining ‘ecology’ … At the base of the food chain sit hundreds of religiouslyoriented colleges anxious to provide undergraduate training that compares favorably to that of high-quality secular schools yet also integrates religion in distinctive ways.

The ‘most important lessons’ that Boettke (2005, 14–15) ‘learned at Grove City College were with respect to religion’: 1. Spiritually—that Jesus Christ is Lord and Savoir [sic] and that one must commit to a personal relationship with God and to strive to live a Christcentered life. 2. Historically—the role of the Christian Church in the development of Western Civilization. 3. Intellectually—the philosophical and epistemological importance of Christian presuppositionalism.

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According to Block (2000, 40), a Mises Institute Senior Fellow, the Austrian School of Economics maintains a ‘united front’ with ‘NeoNazis.’ Timothy Terrell (2003) found that his ‘Austrian ideas and connections with the Mises Institute were an asset when I was in the job market. I won’t say that the Austrian label would have helped me at any school, because that is certainly not true.’ But the schools in which he was ‘most interested saw my Austrian ideas as a plus.’ He is optimistic: ‘over time, I expect Austrian economists will have many more opportunities in the job market.’ The ‘Herf ’ (Herfindahl or Herfindahl–Hirschman Index) is a measure of competition within an industry (the size of firms in relation to the industry); the ‘Hayek’ should measure the degree of discrimination. In competitive equilibrium there can be no long-run economic profits and no short-run discrimination. But when the equivalent résumés of white, black and Latino job applicants (matched also on demographic characteristics and interpersonal skills) were sent to hundreds of entrylevel jobs, black applicants were discovered to be half as likely as equally qualified whites to receive a callback or job offer; and black and Latino applicants with clean backgrounds fared no better than white applicants who were just released from prison (Pager et al. 2009). Before the Civil War, the South was ‘largely free’ of public schools. When non-whites were allowed access to human capital formation, a former Confederate Army chaplain and a leader of the Southern Presbyterian Church, Robert Lewis Dabney, ‘railed against the new public schools.’ An avid defender of the biblical ‘righteousness’ of slavery, in the 1870s Dabney protested against the unrighteousness of taxing his ‘oppressed’ white brethren to provide ‘pretended education to the brats of black paupers.’ For Dabney, the root of the evil in ‘the Yankee theory of popular state education’ was democratic government itself, which interfered with the ‘liberty of the slaver South.’ In the twentieth century, Rushdoony (an ‘admirer’ of Dabney and contributor to Fifield’s Faith and Freedom ) advocated a return to ‘biblical’ law in America (‘theonomy’) in which power would rest ‘only on a spiritual aristocracy with a direct line to God—and a clear understanding of God’s libertarian economic vision.’ Public education, Rushdoony

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asserted, ‘basically trains women to be men’ and had ‘leveled its guns at God and family’ (Stewart 2012, 2017). As an undergraduate at Clemson University, Terrell (2003) read books on ‘theology, apologetics, and ethics.’ He became interested in the writings of the Calvinist theologian, the ‘late Rousas J. Rushdoony, who believed very strongly in the morality [emphasis added] of the free-market system.’ Rushdoony had been ‘influenced by Cornelius Van Til, whose defense of Christianity pointed out that everyone has certain internal presuppositions that serve as starting points for deducing all we know.’ In college, Terrell also read ‘some of Gary North’s work.’ In his ‘Lou Church Memorial Lecture on Religion and Economics at the Austrian Scholars Conference,’ Terrell (2003) planned to examine the ‘evangelical environmental movement.’ Terrell was outraged by Christians who ‘say stewardship over creation means that the state has to save the environment from the market. Reforming the religious underpinnings of this movement will go a long way toward refuting them. Pointing to scientific studies will only go so far among people who believe they have a moral duty to fight for higher fuel economy standards.’ Terrell is a ‘Policy Advisor, Heartland Institute.’5 Terrell (2003) was outraged that there is ‘this tendency to treat economics as a secular discipline that deals only with financial matters.’ With a Ph.D. from Auburn University, Terrell then outlined two-stage Austrian ‘logic’: a. ‘Let’s say that our priority is to behave morally.’ Therefore: b. ‘In order to do so, we need information about the world around us. We need to know the needs of others, what production processes are available, what processes consume the fewest resources to achieve a given result. To gather that information, you have to have a freely functioning market economy.’ Yet the same ‘logic’ applies with a different premise: you have to have a ‘freely functioning market economy’ if your priority is to behave amorally. Terrell (2003) saw his mission as encouraging non-academics to create groups that would ‘put pressure on schools to teach the virtues of liberty, and support organizations that oppose the deification of the state.’

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Terrell worships other deities—he combines ‘free’ market ­economics with the theocracy of the Chalcedon Foundation (which had been founded in 1965 by ‘Rush,’ Rushdoony) because he ‘felt that there needed to be a Christian ministry dedicated to promoting the idea that the Christian faith is a faith for all of life, and that individuals, families, churches, communities, and civil governments must take their marching orders from God’s law-word.’6 The Chalcedon Foundation explains their objective: Christian theocracy is not the dictatorial rule of an elite self-appointed group of religionists seated at the top of a centralized state. It is rather the rule of God (theos, God + kratos, rule) expressed through self-governing Christians who apply their faith and create tithe agencies to govern and service various areas and needs. It involves theonomy: the rule of God’s law.7

On the Chalcedon Foundation website, Terrell (2005) highlighted the role of propaganda and funding: ‘At a time when many Christians were being enticed by socialist ideas, Rushdoony provided Bible-based counter-arguments. The kind of work Rushdoony did is critical to the building of a Biblical society. My hope is that funds will always be available for the books to be published and put online … People who can build on what Rushdoony did, and communicate it to a wider audience, are desperately needed.’ In ‘Rushdoony and His Impact on Economics,’ Terrell (2005) explained that Rushdoony’s ‘thought on law and economics’ has been ‘the most helpful’ to him. Although ‘law schools and economics departments had long ago rejected the authority of Biblical law, Rushdoony wanted to reestablish the connection’—he ‘understood from Scripture that it was impossible for anyone, however intelligent, to organize society according to a central plan.’ Terrell connected this insight to two other deities: ‘I expect that Rushdoony had also read enough of the work of Ludwig von Mises and F.A. Hayek to be familiar with their arguments against socialism, which went along similar lines.’ Terrell (2007) complained that ‘we find tremendous resistance to economic freedom’ because economic freedom means that ‘College students and their parents would have to do without their federally

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subsidized student loans.’ Terrell (2016, 283) also complained that despite ‘Nymeyer’s heroism,’ he ‘never addressed a more fundamental objection to government schools that would now be de rigueur for libertarians. Why should the population be taxed to subsidize the education of a subgroup in the population? Perhaps Nymeyer should be granted clemency on this point, however.’ According to Terrell (2016, 284), Nymeyer (10 April 1970) claimed to accept the doctrine of biblical inerrancy—writing to Rushdoony: I reiterate what I have probably told you before that I consider the word of God inerrant, but I do not hold all the past and present interpretations of Scripture to be inerrant. Those ‘interpretations’ are something different from Scripture itself.

For over a quarter-of-a-century (1946–1973), Mises was funded by Read’s FEE as their ‘spiritus rector ’—literally: ‘Führer ’ or ‘ruler’ (Hülsmann 2007, 884). Noting that it is ‘ideas and ideals that make us free,’ Read shared the ‘testimony of a dear friend, Norman Ream’ (1983), who, in ‘The Law That Makes Us Free,’ declared: There is, indeed, a law which governs human freedom and that law is the moral and spiritual law ordained by God.

Mises flip-flopped on ‘Fascists’ (1927–1938) before flip-flopping on theocrats (1922–c1947).8 In The Doctrine of the Knowledge of God (Theology of Lordship), John Frame (1987, 45) explained that Presuppositionalism ‘merely applies the doctrine of scriptural infallibility to the realm of knowing.’ Five years before his proposed Pact with ‘Fascists,’ Mises (1922, 410; 1932, 389; 1951 [1932], 416, 420) insisted that the Church must liberate itself from ‘the words of the Scriptures’: Considering the attitudes of Jesus to social life, no Christian Church can ever make anything more than a compromise here, a compromise that is effective only as long as nobody insists on a literal interpretation of the words of the Scripture. It would be foolish to maintain that Enlightenment, by undermining the religious feeling of the masses, has cleared the way to

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Socialism. On the contrary, it is the resistance which the Church has offered to the spread of liberal ideas which has prepared the soil for the destructive resentment of modern socialist thought. Not only has the church done nothing to extinguish the fire, it has blown the embers.

Mises also described the ‘böse Saat ’—‘evil seed’—of Christianity: ‘Faith and faith alone, hope, expectation—that is all he needs. He need contribute nothing to the reconstruction of the future, this God Himself has provided for. The clearest modern parallel to the attitude of complete negation of primitive Christianity is Bolshevism.’ One thing of course is clear, and no skilful interpretation can obscure it. Jesus’ words are full of resentment against the rich, and the Apostles are no meeker in this respect. The Rich Man is condemned because he is rich, the Beggar praised because he is poor. The only reason why Jesus does not declare war against the rich and preach revenge on them is that God has said: ‘Revenge is mine’ … Up to the time of modern Socialism no movement against private poverty which has arisen in the Christian world has failed to seek authority in Jesus, the Apostles, and the Christian Fathers, not to mention those who, like Tolstoy, made the Gospel resentment against the rich the very heart and soul of their teaching. This is a case in which the Redeemer’s words bore evil seed.

Mises’ (2009b/1978 [1940], 55) self-chosen motto was ‘Do not give into evil, but proceed ever more boldly against it’ (Chapter 5, above). Mises (2009a [31 December 1946], 1) objected to some of those who had been invited to Mont Pelerin because they had failed to ‘stop the progress on the road to serfdom’: The cause of this lamentable failure was that the founders of these movements could not emancipate themselves from the sway of the very ideas of the foes of liberty.

Mises described evil: ‘All those evils which the interventionists charge to the market economy are the products of allegedly beneficial interference.’ But ‘Laissez faire does not mean: let the evils last. It means: let the consumers, i.e., the people, decide—by their buying and by their

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abstention from buying—what should be produced and by whom. The alternative to laissez faire is to entrust these decisions to a paternal government. There is no middle way. Either the consumers are supreme or the government.’ Five years later, Mises (1951 [1932], 385) argued that monopoly was exceedingly rare: ‘Perhaps the nearest approach to such a monopoly was the power to administer grace to believers, exercised by the medieval Church. Excommunication and interdict were no less terrible than death from thirst or suffocation.’ Two years after that, Mises arranged for the theocrat, Nymeyer, to be invited to the MPS (Hülsmann 2007, 1005, n. 31); and in the 1960s, he excommunicated Machlup and Haberler for recommending the use of the price mechanism in the foreign exchange market (Leeson 2017a, Chapter 7). According to Jacques Kahane’s translation, Mises (1951 [1922/1932], 420) complained that although the ‘Church as an organisation had certainly always stood on the side of those who tried to ward off communistic attacks,’ it ‘could not achieve much in this struggle’ because it was being continually disarmed by the words: ‘Blessed be you poor; for yours is the Kingdom of God.’

But the words that Mises (1922, 411; 1932, 389) believed were sabotaging his liberty were actually: ‘Selig seid Ihr Bettler, denn Euer ist das Reich Gottes’—‘Blessed be you beggars, for yours is the kingdom of God.’ In The Collected Works of F.A. Hayek, Caldwell (1997, 11) insisted: ‘Hayek wrote nothing about socialism during the 1920s.’ In writing about socialism during the 1920s, Hayek (1925) proposed that Mises’ (1922) Die Gemeinwirtschaft: Untersuchungen über den Sozialismus be translated into English. The English version—Socialism: An Economic and Sociological Analysis (1936 [1932], 1951 [1932])—sparked the ‘socialist calculation debate’ with Oskar Lange, the author of On the Economic Theory of Socialism (1938), and others. In The New York Times, Hazlitt (1938) calculated that the English language version of Mises’ (1936 [1932]) book ‘must rank as the most devastating analysis of socialism yet penned … an economic classic in our time.’ According to

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Rockwell (2016), Hazlitt’s review of Mises’ ‘first book to be translated into English … made Socialism an instant hit’ in the United States. In 1922, Robbins (1971, 91)—who had a ‘love affair with Vienna, its setting and its culture’—visited Austria with Kahane (Howson 2011, 87–89). Hayek (1978) reflected that Sozialismus ‘had the decisive influence of curing us, although it was a very long struggle. At first, we all felt he was frightfully exaggerating and even offensive in tone. You see, he hurt all our deepest feelings, but gradually he won us around.’9 Rectification assisted the process of winning others around. In 1700, the Habsburg spontaneous order ended due to inbreeding; while the Habsburg-Lorraine spontaneous order began to break down during their ‘Great’ War. Hayek (1978) ‘grew up in a war, and I think that is a great break in my recollected history. The world which ended either in 1914 or, more correctly, two or three years later when the war had a real impact was a wholly different world from the world which has existed since. The tradition died very largely; it died particularly in my native town Vienna, which was one of the great cultural and political centres of Europe but became the capital of a republic of peasants and workers afterwards. While, curiously enough, this is the same as we’re now watching in England, the intellectual activity survives this decay for some time. The economic decline [in Austria] already was fairly dreadful, [as was] cultural decline. So I became aware of this great break very acutely.’10 Hayek (1978; 1994, 63) recalled that when in 1918, ‘I got back to Vienna somebody put me on to Carl Menger and that caught me definitely.’11 During his first year at the University of Vienna (1918–1919), ‘somebody introduced me to a group of single-­ taxers [Dodenreformers ]—the German version of Henry George, led by one Damaschke—and I was persuaded to read to them a paper on the Ricardian theory of rent.’ The first and possibly the second ‘somebody’ was ‘Othmar Spann The Philosopher of Fascism’ (Polanyi 1934, 1935). Using one of his dissembling words, Hayek (1978) explained: ‘Well, I think the main point is the accident of, curiously enough, Othmar Spann at that time telling me that the book on economics still to read was Menger’s (1871) Grundsetze. That was the first book which gave me an idea of the possibility of theoretically approaching economic

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problems.’12 Throughout his time at the University, Hayek attended the Spannkreist seminar (Leeson 2017a). By plagiarizing the concept of ‘consumer sovereignty,’ Mises repeatedly stole Frank A. Fetter’s property (Leeson 2015, Chapter 7). But The Last Knight of Liberalism could not be described as a plagiarist; instead, others were ‘anticipating’ his arguments: for example, according to Hülsmann (2007, 198, 432, 537, 538, n. 30), ‘anticipating’ an argument that Mises would later ‘carefully develop,’ Friedrich Naumann argued that proposed government interventions could not attain the ends that they were meant to achieve. Mises—regarded by many of his devotees as a saint—was (like Naumann) a ‘classical liberal’ who promoted Lebensraum, German colonies, and political Fascism (Leeson 2018). How do Miseans deal with cognitive dissonance? a. According to Hülsmann (2007, 198, 432, 537, 538, n. 30), Naumann was the ‘father’ of Hitler’s non-Marxist German National Socialists who, by a ‘strange’ coincidence, later came to be regarded as the ‘godfather’ of twentieth-century German classical liberalism. b. According to Raico’s (2012, 67, 127, 322, n. 26) ‘The Liberal Surrender,’ the ‘final capitulation of German liberalism was inaugurated by Friedrich Naumann, today viewed in what pass for liberal circles in the Federal Republic as a kind of secular saint,’ regarded by ‘many nowadays as the exemplary German liberal leader of the early twentieth century.’ c. Naumann, ‘today a liberal icon in Germany, founded his National Social Association in 1896 to promote social welfare measures and an imperialist agenda’ (Raico 2012, 127, n. 26). d. ‘In some respects, Naumann anticipated the central insight of the school of Public Choice when he described the development of modern democracy: ‘The economic classes contemplated to what end they might make use of the new means of parliamentarianism… gradually, they learned that politics is fundamentally a great business, a struggling and a haggling [Markten] for advantages, over whose lap collects the most rewards cast by the legislation-machine’ (Naumann cited by Raico 2012, 322).

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Max Weber became a ‘good friend’ of Mises (2009b/1978 [1940], 55); they were ‘connected by a rare mutual respect’ and a ‘close scholarly relationship’ (Hayek 2009 [1977], xiv, xvii). Together with his ‘close friend,’ Max Weber, Naumann tried to fashion a liberalism more ‘adapted’ to the circumstances of the twentieth century … Naumann knew how to shape a political vision and offer it to a new generation alienated from classical liberal ideas. (Raico 2012, 323)

In Naumann’s ‘conception, liberalism had to make its peace with Social Democracy, by taking up the cause of Sozialpolitik ’ and other ‘claims’ of labour. Mises—a career-long lobbyist for employer trade unions— sought to form an alliance with ‘Fascists’—before forming an alliance with theocrats like Nymeyer, who ‘was unalterably opposed to [labour] unions, calling them coercive and therefore a violation of the 6th Commandment’ (Terrell 2016, 280). Adolf Wilhelm Ferdinand Damaschke (1865–1935), a ‘master of manipulating tropes’ of ‘chauvinism nationalism, anti-Semitism and cultural despair,’ ‘tapped the anti-Semitic undercurrents that nourished the urban artisans’ movement at the end of the 19th century.’ The proto-Nazi Mayor of Vienna, Karl Lueger (1844–1910), joined his League for Land Ownership and ‘promised the corporate membership of his city, which soon followed’ (Repp 2000, 68, 88, 89–90). Damaschke distanced himself from what Kevin Repp (2000, 95) described as Naumann’s ‘disturbing enthusiasm for military inventions,’ though ‘without severing his ties to this important ally,’ and thus stumbled upon the magic formula that soon allowed to portray land reform as Germany’s ticket to a ‘place in the sun.’

Naumann founded the German Democratic Party at the end of the ‘Great’ War (Caldwell 2007, 187, n. 19); and Hayek (1994, 53) founded a ‘German Democratic party when I was a student in 1918– 1921, in order to have a middle ground between the Catholics on the side and the socialists and communists on the other side.’13 But for Hayek (1984a [1956], 189–190), Mises’ (1922) Sozialismus ‘was much

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too strong a medicine and too bitter a pill.’ Yet the ‘logic of the argument was inexorable. It was not easy. Professor Mises teaching seemed directed against all we had been brought up to believe.’ Hayek had been brought up in a proto-Nazi (and later card-carrying Nazi) family. In the feudal and neo-feudal hierarchy, the Pope and Kaiser plus the First and Second Estates (the clergy and the nobility) were the foundations of ‘von’ Mises and ‘von’ Hayek’s intergenerational entitlement program. Hayek was not impressed with the Habsburg Pretender’s intelligence (Cubitt 2006, 48); and in ‘Christianity and Property,’ Mises (1922, 409; 1932, 387; 1951 [1932], 416) expressed contempt for role played by the First Estate in bolstering this social pyramid: Die Bestrebungen, die Einrichtung des Sondereigentums überhaupt und im besonderen die des Sondereigentums an den Produktionsmitteln auf die Lehren Christi zu stützen, sind ganz vergebens [All efforts to find support for the institution of private property in general and private ownership of the means of production in particular, in the teachings of Christ are quite vain].

Five years after Sozialismus, Mises (1985 [1927], 19, 29, 51) found a replacement for the First Estate: ‘The program of liberalism, therefore, if condensed into a single word, would have to read: property [Mises’ emphasis], that is, private ownership of the means of production… All the other demands of liberalism result from this fundamental demand … the socialists say, it is not enough to make men equal before the law. In order to make them really equal, one must also allot them the same income. It is not enough to abolish privileges of birth and of rank. One must finish the job and do away with the greatest and most important privilege of all, namely, that which is accorded by private property … The victory of Fascism in a number of countries is only an episode in the long series of struggles over the problem of property.’ The ‘Fascists’ praised by Mises (1985 [1927], 44) included ‘Germans and Italians,’ ‘Ludendorff and Hitler.’ But in a footnote, Raico (2012, 258, n. 7) asserted that (in addition to Mussolini) Mises was not referring to General Erich Ludendorff and Corporal Hitler but instead

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had in mind (48) the ‘militarists and nationalists’ of the first years following World War I, particularly the Freikorps.

Ashby Henry Turner (1985, 10) implicitly explained why this defining article of Austrian faith is a myth: Until their disbandment in the summer of 1920, the Freikorps also served as training schools for a generation of young, reactionary political hoodlums who would later assassinate prominent Republican leaders, serve as foot soldiers in the [Ludendorff and Hitler] Munich Beer Hall Putsch of 1923, and man the political armies that eventually turned the streets of Germany into battlefields. The big businessmen who helped finance the Freikorps thus incurred a share of responsibility—along with the Majority Socialists who called these units into being—for swelling the ranks of the violence prone young men who would bedevil the democratic processes of the Republic throughout its brief existence.14

Two years after their disbandment, Mises (1922) could have praised the Freikorps for forestalling socialism—but didn’t. He was seeking an alliance with active—not disbanded—‘Fascists.’ In his introduction to the English translation of Sozialismus, Hayek (1992 [1978/1981], 141) explained that the first English language edition had been inspired by Robbins who ‘found a highly qualified translator’—Kahane. In the first German edition, Mises (1922, 420)—who was notorious for making statements such as the ‘eternal’ merits of ‘Fascism’ ‘cannot be denied’—stated: Aus dieser Erkenntnis ergibt sich die Verneinung jener oben gestellten Frage, ob es nicht vielleicht doch möglich wäre, Christentum und freie, auf dem Sondereigentum an den Produktionsmitteln beruhende Gesellschaftsordnung zu versöhnen. Lebendiges Christentum kann neben und im Kapitalismus nicht bestehen.

Which Hülsmann (2007, 442)—referring to ‘1st ed., p. 421’— translated as: ‘This evidence leads to the negation of the question asked above: whether it might not be possible to reconcile Christianity with a free social order based on private ownership in the means of production.

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A living Christianity cannot [emphasis added] exist side by side with, and within, Capitalism.’ In Kahane’s translation, Mises’ (1951 [1932], 428) cannot-be-denied statements about Christianity were rectified by inserting an epistemological distinction between what ‘seems’ and Mises’ reality: ‘In face of all this evidence, it would seem that only a negative answer can be made to the question asked above: whether it might not be possible to reconcile Christianity with a free social order based on private ownership in the means of production. A living Christianity cannot, it seems [emphases added], exist side by side with Capitalism.’ Hülsmann (2007, 442, 441)—a devout Christian who reported that this rectification was undertaken for ‘unknown reasons’—also reflected about the German version: ‘One can only imagine how these passages must have endeared Mises to his Christian readers.’ Yet Kahane was translating not from the German ‘1st ed.’ but from the second—in which Mises (1932, 398) stated: Diese Erkenntnis fiihrt zur Verneinung jener oben gestellten Frage, ob es nicht vielleicht doch moglich ware, Christentum und freie, auf dem Sondereigentum an den Produktionsmitteln beruhende Gesellschaftsordnung zu versohnen. Lebendiges Christentum, scheint es [emphasis added], kann neben und im Kapitalismus nieht bestehen.

The second change (‘scheint es’—‘it seems’) was made by Mises (1932, 398). Moreover, in his ‘Translator’s Notes,’ Kahane (1951, 14) stated that Mises had ‘lent assistance at every stage’ and had ‘inserted certain additions’ which are ‘not to be found in the [1932] German edition.’ Using Socialism (1936 [1932]) as his witness, Mises (16 January 1950) told a ‘high clergyman’ of the Church of England in Canada that he fully agreed with his statement that the Gospels do not advocate ‘anticapitalistic’ policies. Mises also fully agreed with the clergyman’s proposition that Human Action contains not ‘one word’ which is in ‘opposition’ to the faith of Christians (cited by Hülsmann 2007, 854). Hülsmann (2007, 442–443) summarised Mises’ attitude: Liberalism and Christianity were ‘foes by their very nature,’ engaged in a ‘struggle of life or death.’ Either Christianity would maintain the ‘upper hand,’

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or liberalism would ‘crowd it out. No compromise was possible.’ Then: ten years later, Mises had ‘changed his mind … It is not known [emphasis added] what changed his mind.’ Hülsmann speculated that Mises may have had second thoughts on Christianity and liberalism as a consequence of his activity as a counsellor to Monsignor Ignaz Seipel, who according to many Catholic ‘witnesses’ had a ‘saintly’ character. Seipel (1876–1932) was Party Chairman (1921–1930) and Federal Chancellor (1922–1924, 1926–1929) of Lueger’s clerical conservative Christian Social Party. Mises (2009b [1978 (1940)], 64, 66) felt the ‘highest respect’ for the ‘genteel and honest character’ of this ‘noble priest.’ Along with Wilhelm Rosenberg, Mises felt obliged to bring to Seipel’s attention the ‘fact’ that a stabilization of the currency would in time allow the consequences of inflation to become outcropped in the form of a ‘stabilization crisis.’

They explained to Seipel that public opinion would ‘place responsibility for the depression that would follow the inflation boom on the combatants of inflation, and not on those who caused it.’ The Christian Social Party would ‘harvest ingratitude’ rather than thanks. Seipel, who ‘appreciated our candor,’ felt that ‘useful and necessary measures must be taken, even if they meant damage to the party.’ Mises pontificated that the ‘statesman distinguishes himself from the demagogue in that he prefers that which is right over that which brings him acclaim.’ Unfortunately, there were not many politicians in Austria who ‘shared’ this type of thinking. But Rosenberg and Mises succeeded in ‘winning Seipel and his party over to monetary stabilization.’ As leader of a right-wing coalition government supported by the anti-Semitic Greater German People’s Party (German Großdeutsche Volkspartei, which merged with the Nazi Party in 1933–1934), Seipel’s main priority was to encourage cooperation between big business and the paramilitary units of the nationalist Heimwehr—which culminating in the July 1927 Revolt (a prelude to the 1934 Austrian civil war): thereafter, the Social Democrats referred to Seipel as the ‘Bloody Prelate,’ or the ‘prelate without mercy’ (Sachar 2015, 190; Gadshiiev 2004 [1996], 325; Weyr 2005, 51).

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Within the ‘free’ market, it is ‘not known’ what changed Mises’ mind about Christians; while outside, Cubitt (2006, 10, 122) reported that when Hayek was caught in the ‘cheating matter’—stealing, or double-dipping, from ‘educational charities’ to maintain his aristocratic lifestyle—Hayek ‘just laughed, said he did not mind in the least, that all his professional considerations had been based on financial considerations.’ In America, Mises (like Hayek) was dependent on donor funding; and after the failure of his proposed Pact with ‘Ludendorff and Hitler’ et al., Mises re-evaluated the Christians who were funding him: Mises’ agnosticism (or atheism) did not prevent Nymeyer from describing himself as Mises’ ‘protégé’ while also being a quasi-follower of the Presuppositionalist, Rushdoony (Terrell 2016, 270, 272). Nymeyer became convinced that Mises was the ‘greatest living champion’ of the ‘innermost rampart’ of Christianity (cited by Hülsmann 2007, 854–855). In return, Mises cooperated ‘openly and productively’ with the American Religious Right. In letters to J. Howard Pew (1882–1971), Nymeyer summarized Mises’ significance for Christianity: Mises’ economics was by ‘far’ the most satisfactory means to ‘modernize the ethics’ of the HebrewChristian religion. This would facilitate a ‘re-Reformation’ with Mises, apparently, playing the role of Martin Luther—inculcated with the resulting synthesis between Mises and the Dutch Reform Church, ‘one turns out to be an extraordinarily conservative adherent of the Christian religion.’ Simultaneously, some of the ‘absurdities’ of Christianity are ‘removed’ (cited by Hülsmann 2007, 854–855). Hülsmann (2007, 915–916) described Mises’ response: he knew ‘very well’ that the majority of Protestant leaders championed some form of ‘socialism’ or ‘interventionism,’ and that while the Catholic Church valiantly fought communism, it did not oppose socialism. Despite having devoted a significant part of Sozialismus (1922, 1932) to the failures of the First Estate, Mises concluded that he now thought that ‘only’ theologians are ‘called’ to deal with the issue. Nymeyer’s concurred with Mises’ new-found ‘opinion.’ His motive for spreading Mises’ message was ‘precisely’ the ‘complementary relation’ that he perceived existed between the ‘free’ market and Christianity (Hülsmann 2007, 915–916). In 1950, Nymeyer set up the publishing

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company that later became the Libertarian Press. Initially, he published copies of Mises’ (1950) ‘Middle-of-the-Road Policy Leads to Socialism,’ and then planned an American edition of Mises’ (1934 [1912]) Theory of Money and Credit plus a translation of Böhm-Bawerk’s (1959) three-volume work on Capital and Interest. According to Davenport, the original MPS members could ‘agree on everything save the subjects of God and gold’ (cited by Gaza 1997). In a session on ‘Liberalism and Christianity,’ they heard Knight—almost in imitation of the interwar Mises—‘launch an attack against his favorite bete noire, the clergy, with all the vehemence of a Voltaire.’ Morley got to his feet and made it plain as a devout Quaker he had not crossed the Atlantic to hear religion and gentlemen of the cloth defamed; indeed, he implied that if this kind of thing went on, he was taking the next funicular down the mountain on his way home. (Davenport 1981)

According to Harper’s notes taken at an MPS dinner, Hayek indicated that he had not spoken about these matters previously, ‘except to the closest of friends.’ While his family background was Catholic (both of his grandfathers had left the Church), he ‘had never quite bothered to classify himself religiously, other than perhaps to consider himself something of an agnostic.’ However, he hoped that somehow it might be possible to bring two distinct ‘liberal’ [Harper interpolates: ‘European meaning’] factions into harmony and cooperation for the cause of liberty: (1) a group strongly oriented in religion, and (2) a group who prided themselves in being agnostics and/or atheists. It was in that intent that the original members of the Mont Pelerin Society were selected [emphasis added].

But this ‘seemed hopeless … the two factions were not inclined to leave the religious differences lie idle.’ While Hayek did not name names, Harper and his wife recalled that following a visit to an old monastery, Knight was moved to deliver an ‘atheistic sermon,’ and that one of six people sitting with them got up and moved to another table (Shearmur 2015). When Hayek (1978) called ‘that first meeting on Mont Pélerin,’

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I had already had the idea we might turn this into a permanent society, and I proposed that it would be called the Acton-Tocqueville Society, after the two most representative figures. Frank Knight put up the greatest indignation: ‘You can’t call a liberal movement after two Catholics!’ [laughter] And he completely defeated it; he made it impossible. As a single person, he absolutely obstructed the idea of using these two names, because they were Roman Catholics.15

Friedman stated that in 1947, the inaugural MPS sessions were marked by vigorous controversy over such issues as the role of religion and moral values in making possible and preserving a free society; the role of trade unions and the appropriateness of government action to affect the distribution of income. I particularly recall a discussion of this issue, in the middle of which Ludwig von Mises stood up, announced to the assembly ‘You’re all a bunch of socialists,’ and stomped out of the room. (Friedman and Friedman 1998, 161)

According to Rockwell (1998): ‘The event happened, not at the opening meeting of the Mont Pelerin Society in 1947, but in the mid-1950s, as the Chicago School was gaining dominance over the free-market movement, and the Mont Pelerin Society was falling under their sway.’ According to The Last Knight of Liberalism, Friedman described those Mises had insulted as an ‘assembly that contained not a single person who, by even the lowest standards, could be called a socialist.’ Hülsmann (2007, 871) added that Friedman didn’t specify what he meant by ‘the lowest standards.’ In any case, while Mises was able to hold socialists in high esteem, the incident showed that he had little patience with socialists parading as liberals.

Friedman didn’t need to specify what ‘the lowest standards’ meant because he hadn’t used the phrase: he used, instead, ‘the loosest standards’ (Friedman and Friedman 1998, 161). Neither did Mises (1951 [1932], 24) hold socialists in high esteem—stating in the Preface to the second German edition of Sozialismus: ‘I know only too well how

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hopeless it seems to convince impassioned supporters of the Socialistic Idea by logical demonstration that their views are preposterous and absurd.’16 According to FEE’s Greg Kaza (1997), the ‘legacy’ of the MPS is ‘substantial. It helped to keep alight the lamp of classical liberalism and free-market thought at a time when the damp winds of socialism and interventionism threatened to extinguish it.’ Davenport’s son suffered from schizophrenia17; and in ‘Reflections on Hayek,’ Davenport (n.d.) recalled encountering the pre-Nobel Hayek in a ‘profound mood of depression.’ Hayek (12 March 1970) told Davenport that if he were younger and able to tap into some appropriate donors, he would set up a smaller and informal alternative to the MPS to discuss the psychiatrists and psychologists who were the source of ‘our’ troubles.18 Mises (1985 [1927]) sought to become the intellectual Führer of a ‘Fascist’-Classical Liberal Pact; and then embraced Christianity as a replacement—but he would not tolerate the evidence-respecting Chicago School of Economics. As MPS President (1970–1972), Friedman sought to close the Society down on its 25th anniversary (Leeson 2013, Chapter 1). Kaza (1997) reported: ‘At age 50,’ the MPS is ‘still going strong, boasting as members some of the best minds working in the realm of economics. Inspired by their illustrious predecessors, they will, I am confident, continue to keep that lamp burning brightly.’ In contrast, Stigler (MPS President, 1976–1978) described FEE’s Read and Watts (inaugural MPS members) as dishonest ‘bastards’—and Friedman concurred (Chapter 1, above). Friedman’s (2017 [1991]) ‘Say “No” to Intolerance’ was openly directed at Mises. The Wall Street Journal (26 October 1982) non-editorial pages reported that the press were brought to the White House expecting to hear a ‘glowing evaluation’ of Reagan’s economic program from the newly-minted Nobel Laureate, Stigler. But instead, Stigler declared: ‘we’re in a depression.’ Stigler—who had been responsible for ‘Dr.’ Laffer being dismissed from the University of Chicago (Leeson 2003)—gave Reagan not an A but an ‘Incomplete,’ and called supply-side economics a ‘gimmick or if you wish a slogan.’ The White House aides that accompanied him became ‘more and more fidgety, increasingly desperate,’ and a White House deputy press secretary Peter Roussel, tried ‘several times to

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choke off questions.’ Finally, Roussel managed to ‘interrupt the proceedings and steer the Nobel laureate gently but firmly away from reporters, who laughed and cheered.’ In his account of the story, Stigler (1988, 137) reported that had he not declined the George Shultz-inspired offer to become Foreign Trade Adviser to Nixon, he might have ‘learned to be discreet and also possibly to be illegal.’ The FBI objected to the activities of a ‘professional anticommunist,’ Dr. Fred Schwartz who is an ‘opportunist … such people as Dr. Schwarz are largely responsible for misinforming people and stirring them up emotionally to the point that when FBI lecturers present the truth, it becomes very difficult for the misinformed to accept it.’19 In ‘It All Began With Fred Schwarz,’ North’s (2010, 240) reported that My father was in the FBI. He monitored ‘the swoopers’ — the Socialist Workers Party, a Trotskyite splinter group. Once in a while, he would put on his Sherman Williams Paint (SWP) cap for effect. But he wouldn’t wear it while surveilling the Trotskyites. Sometimes, dad would be called in to monitor ‘the real stuff ’: the local Communist Party.

North’s (2010, 240) ‘main academic interest in 1958 was anti-Communism.’ At age 14, a ‘little old lady in tennis shoes’ (who didn’t actually wear tennis shoes) had taken him to hear the anti-Communist Australian physician Fred Schwarz, on one of his first speaking tours of the United States. Having ‘figured that practically everyone was leftist,’ at age 13 Reisman (2001, 3–4) heard George Sokolsky mention The Freeman on his Sunday night radio broadcast: ‘I bought it … That was my first exposure to Mises’s writing. I could see for the first time that here was someone who was arguing, very authoritatively, in defense of capitalism.’ Mises (1951 [1932], 24) knew ‘only too well’ that socialist ‘do not want to hear, to see, or above all to think, and that they are open to no argument.’ According to Hülsmann (2007, 892), for a few ‘glorious’ years the Pew-financed Freeman spread Austrian economics among a ‘larger’ public. In contrast, Knight described FEE’s The Freeman—to which Mises was a regular contributor—as seeming to ‘scream’ in a way that may ‘tickle’ the ears of those already converted or ‘overconverted,’

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but would hardly convert anybody else, at least nobody open to ‘reason’ (as reported by Hazlitt, cited by Hülsmann 2007, 910–911). Knight was describing the entire Austrian School of Economics: ‘Jerome Tuccille wrote a book thirty years ago, It Usually Begins With Ayn Rand. It was a good book, especially the sections on the Galambosian, but it was wrong. Back when he wrote it, it usually began with The Freeman. Today, it usually begins with LewRockwell.com’ (North 2010, 239). Knight was also describing Reagan’s agenda. Reason asked Chamberlain (1987) that when he founded The Freeman, did he have ‘any idea at the time that 30 years later the viewpoint represented by this magazine would win the White House?’ Some of the links between the Austrian School of Economics and Hitler are described in Eugenics, Cultural Evolution, and The Fatal Conceit (Leeson 2017b). Read (1965) described the ‘evil forces’ that promoted ‘evolutionary setbacks’: ‘The power of creative energies to manifest themselves in the face of man-made obstacles accounts for the progress we observe even when the worst elements in society get on top. But these worst people and their numerous inanities, by themselves, are incapable of putting a crimp in evolution. The danger is that millions of people, observing progress and human intervention proceeding simultaneously, are tempted to correlate the two and, thus, regard the foolish actions as the cause of the progress. They may fail to see that the progress is in spite of the obstruction. In such situations the destructive forces become so overpowering that whole civilizations decline and fall. Historically speaking, the setbacks are temporary, but who wants to be an accomplice to evolutionary setbacks? To avoid such disaster, we must know the nature of the evil forces.’ Read (1965) illustrated his point by referring to inventors: ‘Robert Fulton the steamboat … Alexander Graham Bell the telephone.’ Referring to private property and the inventor of the telephone, Mises (1990 [1949/1950], 297) stated: ‘a new idea can be put into practice in a limited field with small resources. Thus men like Fulton and Bell could succeed in realizing plans to which the majority of their contemporaries laughed.’ The April 1947 Fools’ Day convening atop Pilgrim Mountain occurred as Hayek was seeking to finance his post-‘bootleg’-divorce life. Yet Hayek (1985) devoted his 1984 MPS address to the

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moral inheritance which is an explanation of the dominance of the western world, a moral inheritance which consists essentially in the belief in property, honesty and the family, all things which we could not and never have been able adequately to justify intellectually. We have to recognize that we owe our civilization to beliefs which I have sometimes have offended some people by calling ‘superstitions’ and which I now prefer to call ‘symbolic truths’ … We must return to a world in which not only reason, but reason and morals, as equal partners, must govern our lives, where the truth of morals is simply one moral tradition, that of the Christian west, which has created morals in modern civilization.

In cocking a snook at the US$450 that he apparently owed the MPS, one French member (10 November 1990) told Feulner that Mises had once told him ‘never to ask a libertarian about his wife, most of them being likely to be divorced.’20 The Roman Catholic Feulner (22 November 1996) told Benegas Lynch that at the 1997 reconvening atop Pilgrim Mountain, Becker had been invited to present a paper on ‘Liberalism, Religion and the Family.’21 Mises met Margit (1984, 1, 27) in 1925 (when he was 43 or 44), asked her to marry him the following year, but didn’t sign what he called that ‘scrap’ of paper until he was 58. Mises’ mother (1858–1937) became widowed in 1903; and in 1925, the non-Jewish Margit was a 35-year-old widow with two young children. Mises declined to marry her until after his own intensely religious mother had died despite knowing that his fiancé ‘needed’ a father for her children and was aware that she gave them ‘all the love and affection’ that she was capable of. Her children needed more than a ‘loving and doting mother’: They needed ‘guidance and direction’ for their development—she, as a single mother, was ‘well aware’ that she was not ‘strong’ enough to give them what they ‘deserved.’ Queen Victoria (reigned: 1837–1901) went into mourning after the death of her husband and first cousin, Prince Albert of Saxe-Coburg and Gotha (1819–1861). The sexual encounters of her son, the future Edward VII (reigned: 1901–1910), undermined the image of bourgeois respectability that she sought to project for her dynasty. Her children and grandchildren presided over the Crowned Houses of the neo-feudal

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century (which led, inexorably, to their ‘Great’ War)—a version of which von Mises’ ‘children’ and ‘grandchildren’ sought and seek to reconstruct. Hayek (1978) described one of his own contributions: ‘I believe there is a chance of making the intellectuals proud of seeing through the delusions of the past. That is my present ambition, you know. It’s largely concerned with socialism, but of course socialism and unlimited democracy come very much to the same thing. And I believe–at least I have the illusion–that you can put things in a way in which the intellectuals will be ashamed to believe in what their fathers believed.’22 Referring to the religiosity of those who funded him, Hayek (1978) explained: ‘I hate offending people on things which are very dear to them and which doesn’t do any harm.’23 According to North, the Mises Institute ‘Medal of Freedom’ holder: ‘When people curse their parents, it unquestionably is a capital crime. The integrity of the family must be maintained by the threat of death’ (cited by Olson 1998). Citing North, Skousen (1991, 153, 155, 212) asserted that Marx was wealthy and not a ‘good family man.’ Citing ‘Deacon’ McCormick’s (1985) Cambridge Apostles ten times, North (1986) concluded that Keynes was a ‘Godhating, principle-hating, State-loving homosexual pervert,’ and Keynesians have ‘pushed the world into evil, and therefore toward God’s righteous judgment.’ In 1930, Keynes switched from a free trade position to the tariff reform position, based on the ‘beggar thy neighbor’ principle. Presumably referring to buggery, North added: ‘Keynes had long since decided to do a lot worse than just beggar his neighbor.’ Rothbard (1992a) also cited ‘Deacon’ McCormick (1985) and described Keynes’ ‘deep hatred and contempt for the values and virtues of the bourgeoisie, for conventional morality, for savings and thrift, and for the basic institutions of family life.’ For the Hillsdale College celebration of the anniversary of Mises’ birth, Shenfield (1981) compared the ‘morally mature’ ‘free’ system to ‘morally stunted’ socialism. The ‘morally inherent’ quality of private property was ‘respect for sanctity of contract’ and ‘love thy neighbour as thyself ’—which ‘must mean that one wishes one’s neighbour to have what one most values for oneself.’ After MPS President Leoni was hacked to death by an underworld business associate, the devout Christian President of Hillsdale College, George Roche III, emerged

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as the premier Austrian morality promoter and fund-raiser. He became a fund-raising liability after Lissa Jackson Roche confessed to her husband, George Roche IV, that she had been having sex with her fatherin-law for 19 years (Rapoport 2000). The editor of the Libertarian Review, Roy Childs, reported to Scott Sublett (1987) that Rothbard treated him as a ‘sort of intellectual son’ until they fell out: ‘Anyone who finds himself on the opposite side of an issue can expect to find himself savaged in any number of ways.’ His ‘feuds are legendary.’ Rothbard’s (11 March 1954) position changes were also legendary—telling Read that: ‘One of the actions that particularly outrages me is the politicking of clergymen… Use of the pulpit as a soap-box or platform is complete degradation whatever the political views are.’24 Rothbard (1979, 11) saw ‘nothing wrong with either the desire for or the exercise of one’s right to revenge. On the contrary, I believe that revenge is necessarily entailed by a love of justice and a desire to uphold one’s rights against aggressors.’ Rothbard explained what motivated him: ‘hate is my muse’ (cited by Tucker 2014; Peterson 2014). Rothbard (1992b, 9), who promoted a ‘Defend Family Values’ strategy, appeared to hate children: Like many who are childless, he had little patience for unruly, noisy, smelly little savages that disrupted civilized adult activity. He was often puzzled that parents with obvious intelligence could allow the ‘little monsters’ to run amuck. Murray greatly admired how the English upper classes deal with their children. (As recorded in novels and bad English movies, the nanny would bring them in at an appointed time to visit their father. They always addressing him as ‘Sir,’ and after reporting on their activities for the day, were summarily dismissed.) (Blumert 2008, 325–326)

In ‘Kid Lib,’ Rothbard (2000 [1974], 152) asserted: ‘Can we say that the law—that outside enforcement agencies—have the right to step in and force the parents to raise their children properly? The answer must be no. For the libertarian, the law can only be negative, can only prohibit aggressive and criminal acts by one person upon another. It cannot compel positive [Rothbard’s emphasis] acts, regardless of how

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praiseworthy or even necessary such actions may be. And so a parent may be a moral monster for not caring for his child properly, but the law cannot compel him to do otherwise. It cannot be emphasized too strongly that there is a host of moral rights and duties which are properly beyond the province of the law.’ In a ‘purely libertarian society,’ there would be a ‘free market in babies and other children … parents who now neglect or dislike their children would be able to sell their offspring to those parents who would desire and care for them properly. Every party involved would gain by the actions of such a market: the child would be shifted from cruel or neglectful parents to those who would desire and care for it; the neglecting parent would acquire the preferred amount of money instead of the unwanted child; and the new foster parents would at last be able to adopt a child.’ Rothbard’s (2000 [1974], 152) authority was the financial adviser and editor of The Twelve-Year Sentence Radical Views on Compulsory Education (Rickenbacker 1974): ‘William Rickenbacker, in his column in National Review, has, in fact, recently advocated such a free-baby market.’ In The Ethics of Liberty, Rothbard (2002 [1982], 100) argued that ‘the parent may not murder or mutilate his child’ but ‘the parent should have the legal right not to feed his child, i.e. to allow it to die.’ And in ‘Right-wing Populism: A Strategy for the Paleo Movement,’ the atheist Rothbard (1992b, 9) promoted a slogan: ‘get the State out of the family, and replace State control by parental control. In the long run, this means ending public schools, and replacing them by private schools.’ In the short-run: ‘public schools must allow prayer.’ According to Hülsmann (2008, 188–189), it is ‘widely known’ that the (non-Austrian) Welfare State has been a ‘major’ factor in the decline of the family. Perennial inflation slowly but assuredly ‘destroys the family, thus suffocating the earthly flame of morals': Indeed, the family is the most important ‘producer’ of a certain type of morals.

Hülsmann was specific: family life is only possible if ‘all members endorse norms such as the legitimacy of authority, and the prohibition of incest.’ And Ebeling (2014) promoted the pre-Keynes

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existing ‘Victorian’ values of that time,

which he describes as: ‘Individual responsibility for one’s actions, respect for the rights of others … and forgoing some pleasures of the present to plan for and undertake investments for a better tomorrow.’ Mises (1951 [1932], 87, 104, n. 1) reflected: ‘Waking and dreaming man’s wishes turn upon sex.’ Mises lived with his mother until he was 53: the ‘only’ explanation that Margit (1984, 25) could find was that his mother’s household was running ‘smoothly’—their two maids had served them for decades and Mises could ‘come and go’ whenever it ‘pleased’ him and could concentrate on his work without being ‘disturbed.’ Mises displayed what Hayek called the ‘female evil of hysteria’ (Cubitt 2006, 64, 77). Margit Mises (1976, 33, 36) recalled that the ‘one thing’ about Mises that was as astonishing as it was frightening was his temper. Occasionally he showed terrible outbursts of tantrums. I do not really know what else to call them. I had experienced them in Vienna on various occasions. Suddenly his temper would flare up, mostly about a small, unimportant happening. He would lose control of himself, start to shout and say things, which coming from him, were so unexpected, so unbelievable, that when it happened the first few times I was frightened to death. Whatever I said would enrage him even more.

Disciples found that it was impossible to reason with Mises’ ‘free’ market (see, for example, North 1992, 1999, 57; Chapter 5, above). Margit (1976, 33, 36) observed the same trait: it was ‘impossible to reason with him. So I kept silent or went out of the room.’ As James Buchanan (1992, 130) observed: Mises ‘seemed to demand sycophancy.’ Mises felt himself to be God-like—able to solo-generate perfect knowledge (Chapter 2, above). Margit (1976, 20–21, 36) gradually realised that Mises’ ‘outbursts had nothing to do with me. I was just there, I was the outlet which gave him the opportunity to relieve himself.’ ‘Sometimes’, she didn’t see her fiancé for ‘weeks. But I knew very well that he was in town. At least twice daily the telephone rang, and when I answered there was silence at the other end of the line—not a

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word was spoken.’ She ‘knew’ it was Mises: ‘I was so tormented, so torn to pieces that the children must have felt it.’25 Mises also relieved himself by feeling Margit’s six-year-old daughter, Gitta. Mises (31 July 1927) wrote passionate letters: ‘I kiss your mouth and your hair.’ Two days earlier, Mises (29 July 1927) explained that he had been too busy to look after her children. In addition to sending Margit their ‘love and greetings, he also had some egotistical reasons, too: I wanted to touch Gitta’s hair and think of you’ (cited by Margit Mises 1976, 15–16). Margit then confronted him as what Mises (3 November 1927) described as not a ‘loving woman’ but as a ‘cold adversary’: if he wanted to get married, it was ‘Today or never!’ Margit would not allow her fiancé to postpone the decision by even a couple of hours (cited by Hülsmann 2007, 608). In Sozialismus, Mises (1951 [1932], 85, 87, 90) justified his type of behaviour: ‘In the life of a genius, however loving, the woman and whatever goes with her occupy only a small place… Genius does not allow itself to be hindered by any consideration for the comfort of its fellows even of those closest to it.’ With respect to women, ‘the sexual function,’ the urge to ‘surrender to a man,’ and ‘her love for her husband and children consumes her best energies’; anything more was a ‘spiritual child of Socialism.’ In an interview in Playboy, Rand (1964) provided further legitimization: her overarching philosophy was that ‘man exists for his own sake, that the pursuit of his own happiness is his highest moral purpose, that he must not sacrifice himself to others, nor sacrifice others to himself.’ Those who ‘place such things as friendship and family ties above their own productive work … are immoral. Friendship, family life and human relationships are not primary in a man’s life. A man who places others first, above his own creative work, is an emotional parasite; whereas, if he places his work first, there is no conflict between his work and his enjoyment of human relationships.’ According to Hülsmann (2008, 190), the ‘excessive’ (non-Austrian) welfare state is an ‘all-out direct attack on the producers of morals.’ It was also fiendish: it weakens these morals in ‘indirect ways,’ by ‘subsidizing bad’ moral examples. Libertine ‘lifestyles’ carry ‘great economic risks’ which the (non-Austrian) welfare state socializes and therefore

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allows ‘far greater prominence’ to immorality than it would have in a ‘free society.’ Neoclassical economic incentives created an economic penalty for the licentious—but under the (non-Austrian) welfare state ‘licentiousness’ might actually go ‘hand in hand with economic advantages, because it frees the protagonists from the costs of family life (for example, the costs associated with raising children).’ The (non-Austrian) welfare state ‘backed’ protagonists as they ‘mock conservative morals.’ Austrians are outraged that Keynes (1883–1946) had sexual encounters with young men: from the (all-male) Eton College to his marriage in 1925. For Mises (1881–1973), only ‘one sin was unforgivable: lack of integrity’ (Hülsmann 2007, 1000). There is strong circumstantial evidence that Gitta was deeply traumatized by her childhood encounters with Second Estate ‘liberty’ (Leeson 2018). Margit Mises (1984, 43–44) reflected: there was ‘one thing’ about her husband that she never understood and still don’t understand. From the day of our marriage he never talked about our past. If I reminded him now and then of something, he cut me short. It was as if he had put the past in a trunk, stored it in the attic, and thrown away the key. In thirty-five years of marriage he never, never-not with a single word-referred to our life together during the thirteen years before our marriage. As the past was part of my life, part of the person I became, I could not forget. His silence about the past remains in my mind like a crossword puzzle that one cannot solve because one needed letter is missing.

Notes 1. http://www.udallas.edu/. 2. Hutt (27 July 1970) to Arthur Kemp. MPS Archives Box 55.5. 3. MPS Archives Box 3.6. 4. https://www.lewrockwell.com/1970/01/murray-n-rothbard/an-eveningin-ayn-rands-livingroom/. 5. http://sites.wofford.edu/terrelltd/. 6. https://chalcedon.edu/founder. 7. https://chalcedon.edu/about/what-we-believe.

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8. Presumably, not all the Christians who funded Mises were theocrats. 9. Friedrich Hayek, interviewed by Earlene Craver date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 10. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 11. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 12. Friedrich Hayek, interviewed by Axel Leijonhufvud date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 13. Was Hayek—an Orwellian rectifier—referring to the religious foundations of the neo-feudal order or to socialism? Describing his early Fabian influences, Hayek (1978) stated: ‘The influence which led me to economics was really Walter Rathenau’s conception of a grand economy. He had himself been the raw materials dictator in Germany, and he wrote some very persuasive books about the reconstruction after the war. And [those books] are, of course, socialist of a sort–central planning, at least, but not a proletarian socialism.’ Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory. library.ucla.edu/). Referring to Mises’ (1922) Sozialismus, Hayek (1984b [1956], 190) asserted: ‘It was a time when all the fashionable intellectual arguments seemed to point to socialism and when nearly all “good men” among the intellectuals were socialists … Because for the young idealist of the time it meant the dashing of all his hopes; and since it was clear that the world was bent on the cause whose destructive nature the work pointed out, it left us little but black despair. And to those of us who knew Professor Mises personally, it became, of course, soon clear that his own view about the future of Europe and the world was one of deep pessimism. How justified a pessimism we were soon to learn.’ 14. According to Clark (1964, 57), the Freikorps consisted of three elements: ‘soldiers, mainly young soldiers, from the frontline who preferred to go on soldiering, youthful idealists of the aristocratic and professional classes who had experience of local bolshevisants, and frank adventurers.’

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15. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 16. Mises added: ‘But new generations grow up with clear eyes and open minds. And they will approach things from a disinterested, unprejudiced perspective. It is for them that this book is written.’ 17. Letter to ‘Dr. Scarfe’ (n.d.). Davenport Archives Box 5.9. 18. Davenport Archives Box 3.24. 19. https://web.archive.org/web/20090904041655/, http://ernie1241.googlepages.com:80/skousen. 20. MPS Archives Box 100. 21. In 1970, Becker’s wife, Doria Slote, committed suicide leaving her husband to bring up two young daughters. He remarried in 1980. 22. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 23. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 24. https://history.fee.org/publications/murray-n-rothbard-to-leonard-eread/. 25. Margit Mises (1984, 28) attributed his behaviour to shyness: ‘he wanted to hear my voice.’

References Archival Insights into the Evolution of Economics (and Related Projects) Friedman, M. F. (2017 [1991]). Say ‘No’ to Intolerance. In R. Leeson & C. Palm (Eds.), Milton Friedman on Freedom. Stanford, CA: Hoover Press. Leeson, R. (2003). Ideology and the International Economy: The Decline and Fall of Bretton Woods. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2013). Hayek: A Collaborative Biography Part I Influences From Mises to Bartley. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2015). Hayek: A Collaborative Biography Part II Austria, America and the Rise of Hitler, 1899–1933. Basingstoke: Palgrave Macmillan.

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Leeson, R. (2017a). Hayek: A Collaborative Biography Part VII ‘Market Free Play with an Audience’: Hayek’s Encounters with Fifty Knowledge Communities. Basingstoke: Palgrave Macmillan. Leeson, R. (Ed.). (2017b). Hayek: A Collaborative Biography Part X Eugenics, Cultural Evolution, and The Fatal Conceit. Basingstoke: Palgrave Macmillan. Leeson, R. (2018). Hayek: A Collaborative Biography Part VIII The Constitution of Liberty: ‘Shooting in Cold Blood’ Hayek’s Plan for the Future of Democracy. Basingstoke: Palgrave Macmillan. Shearmur, J. (2015). The Other Path to Mont Pelerin. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part IV England, the Ordinal Revolution and the Road to Serfdom (pp. 1931–1950). Basingstoke: Palgrave Macmillan.

Other References Block, W. (2000). Libertarianism vs Objectivism; A Response to Peter Schwartz. Reason Papers, 26, 39–62. http://www.reasonpapers.com/pdf/26/ rp_26_4.pdf. Blumert, B. (2008). Bagels, Barry Bonds and Rotten Politicians. Auburn, AL: Ludwig von Mises Institute. Boettke, P. J. (2005). Religion and Economics. Faith & Economic, 46, 1–9. Böhm-Bawerk, E. (1959). Capital and Interest (3rd Vol.) (H. Sennholz, Trans.). South Holland, IL: Libertarian Press. Buchanan, J. (1992). I Did Not Call Him ‘Fritz’: Personal Recollections of Professor F.A. v. Hayek. Constitutional Political Economy, 3(2), 129–135. Caldwell, B. (1997). Editorial Introduction. In Socialism and War: Essays, Documents, Reviews—The Collected Works of F.A. Hayek. Indianapolis: Liberty Fund. Caldwell, B. (2007). Introduction and Editorial Notes. In F. A. Hayek (Ed.), The Road to Serfdom—Texts and Documents—The Definitive Edition. The Collected Works of F.A. Hayek. Chicago: University of Chicago Press (Edited by Bruce Caldwell). Carver, T. N. (1949). Recollections of an Unplanned Life. Los Angeles: The Ward Ritchie Press. Chamberlain, J. (1987, March). Reason Interview with John Chamberlain. Reason. http://reason.com/archives/1987/03/01/reason-interview-with-john-cha/2. Clark, R. T. (1964). The Fall of the German Republic a Political Study. New York: Russell and Russell.

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Cubitt, C. (2006). A Life of August von Hayek. Bedford, England: Authors on line. Davenport, J. (1981, July). Reflections on Mont Pelerin. The Mont Pelerin Society Newsletter. Ebeling, R. M. (2014, June 16). The Rise and Fall of Classical Liberalism. Free Market Liberalism. https://rebeling.liberty.me/the-rise-and-fall-of-classicalliberalism-by-richard-ebeling/. Friedman, M. F., & Friedman, R. D. (1998). Two Lucky People: Memoirs. Chicago: University of Chicago Press. Gadshiiev, K. (2004 [1996]). Totalitarianism as a Twentieth Century Phenomenon. In H. Maier (Ed.), Totalitarianism and Political Religions. London: Routledge. Hayek, F. A. (1925, April 14). A Critic of Socialism. The Times, p. 11. Hayek, F. A. (1978). Oral History Interviews. Los Angeles: Centre for Oral History Research, University of California. http://oralhistory.library.ucla. edu/. Hayek, F. A. (1984a). 1980s Unemployment and the Unions: The Distortion of Relative Prices by Monopoly in the Labour Market. Essays on the Impotent Price Structure of Britain and Monopoly in the Labour Market. London: Institute of Economic Affairs. Hayek, F. A. (1984b). My Years with Ludwig von Mises (2nd ed.) (M. Mises, Ed.). Cedar Falls, IA: Center for Futures Education. Hayek, F. A. (1985, June). Professor Friedrich Hayek’s Closing Speech. Mont Pelerin Society Newsletter. MPS Archives Box 67. Hayek, F. A. (1992). The Fortunes of Liberalism: Essays on Austrian Economics and the Ideal of Freedom—The Collected Works of F.A. Hayek (P. Klein, Ed.). Chicago: University of Chicago Press. Hayek, F. A. (1994). Hayek on Hayek an Autobiographical Dialogue. Supplement to the Collected Works of F.A. Hayek (S. Kresge & L. Wenar, Eds.). Chicago: University of Chicago Press. Hayek, F. A. (2009). Introduction. In L. Mises. (2009/1978 [1940]). Memoirs. Auburn, AL: Ludwig von Mises Institute. Hazlitt, H. (1938, January 9). A Revised Attack on Socialism. New York Times. Honan, W. (1998, September 6). A Right-Wing Slant on Choosing the Right College. New York Times. http://www.nytimes.com/1998/09/06/us/a-rightwing-slant-on-choosing-the-right-college.html. Hornberger, J. G. (1988, September 1). Leonard Read Changed My Life. Foundation for Economic Education. https://fee.org/articles/ leonard-read-changed-my-life/.

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Hornberger, J. G. (2001, January 31). Full Context Interview with Jacob F. Hornberger by William and Karen Minto. The Future of Freedom Foundation. https://www.fff.org/explore-freedom/article/full-context-interviewwith-jacob-g-hornberger/. Howson, S. (2011). Lionel Robbins. Cambridge: Cambridge University Press. Hülsmann, J. G. (2007). Mises: The Last Knight of Liberalism. Auburn, AL: Ludwig von Mises Institute. Hülsmann, J. G. (2008). Ethics of Money Production. Auburn, AL: Ludwig von Mises Institute. Iannaccone, L. R. (2005). Economics of Religion: Debating the Costs and Benefits of a New Field. Faith & Economics, 46, 1–9. https://www.gordon. edu/ace/pdf/SymposiumF05F&E46.pdf. Kahane, J. (1951). Translator’s Notes. In L. Mises. (1951 [1932]). Socialism: An Economic and Sociological Analysis (J. Kahane, Trans.). New Haven: Yale University Press. Kaza, G. (1997, June 1). The Mont Pelerin Society’s 50th Anniversary. Foundation for Economic Education. https://fee.org/articles/the-mont-pelerin-societys50th-anniversary/. Lange, O. (1938). On the Economic Theory of Socialism (B. Lippincott, Ed.). Minneapolis: University of Minnesota Press. McCormick, D. (pseudonym: Deacon, R.). (1985). The Cambridge Apostles: A History of Cambridge University’s Elite Intellectual Secret Society. London: Royce. Menger, C. (1871). Grundsätze der Volkswirtschaftslehre. Wien: Erster allgemeiner Teil. Mises, L. (1922). Die Gemeinwirtschaft: Untersuchungen über den Sozialismus. Jena: Gustav Fischer Verlag. http://docs.mises.de/Mises/Mises_Gemeinwirtschaft.pdf. Mises, L. (1932). Die Gemeinwirtschaft: Untersuchungen über den Sozialismus (2nd ed.). Jena: Gustav Fischer Verlag. Mises, L. (1934 [1912]). The Theory of Money and Credit (H. E. Batson, Trans.). London: Jonathan Cape. Mises, L. (1936 [1932]). Socialism: An Economic and Sociological Analysis (J. Kahane, Trans.). London: Jonathan Cape. Mises, L. (1950, May 4). Middle-of-the-Road Policy Leads to Socialism. Commercial and Financial Chronicle. https://mises.org/library/middle-roadpolicy-leads-socialism. Mises, L. (1951 [1932]). Socialism: An Economic and Sociological Analysis (J. Kahane, Trans.). New Haven: Yale University Press.

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Mises, M. (1976). My Years with Ludwig von Mises. New York: Arlington House. Mises, M. (1984). My Years with Ludwig von Mises (2nd ed.). Cedar Falls, IA: Center for Futures Education. Mises, L. (1985 [1927]). Liberalism in the Classical Tradition (R. Raico, Trans.). Auburn, AL: Mises Institute. Mises, L. (1990). Money, Method and the Market Process. Auburn, AL: The Ludwig von Mises Institute (Selected by Margit von Mises and edited with an introduction by Richard M. Ebeling). Mises, L. (2009a). Observations on Professor Hayek’s Plan. Libertarian Papers,1(2). www.libertarianpapers.org. Mises, L. (2009b/1978 [1940]). Memoirs. Auburn, AL: Ludwig von Mises Institute. North, G. K. (1986). Foreword to Ian Hodge’s Baptized Inflation: A Critique of ‘Christian’ Keynesianism. Tyler, TX: Institute of Christian Economics. North, G. K. (1992). The Coase Theorem A Study in Economic Epistemology. Tyler, TX: Institute for Christian Economics. North, G. K. (1999, August/September). Recollections of the 1974 South Royalston Conference on Austrian Economics. Biblical Economics Today, 21(5). http://www.garynorth.com/BET-Aug1999.PDF. North, G. K. (2010). It All Began with Fred Schwartz. In W. Block (Ed.), I Chose Liberty: Autobiographies of Contemporary Libertarians. Ludwig von Mises Institute: Auburn, AL. Olson, W. (1998, November). Reasonable Doubts: Invitation to a Stoning Getting Cozy with Theocrats. Reason. http://reason.com/ archives/1998/11/01/invitation-to-a-stoning. Pager, D., Western, B., & Bonikowski, B. (2009, October 1). Discrimination in a Low-Wage Labor Market: A Field Experiment. American Sociological Review, 74(5), 777–799. https://doi.org/10.1177/000312240907400505. Peterson, J. (2014). Hated Was My Muse. Liberty.me. https://wti.liberty.me/ hatred-was-my-muse/. Polanyi, K. (1934). Othmar Spann: The Philosopher of Fascism. New Britain, 3(53), 6–7. Polanyi, K. (1935). The Essence of Fascism. In D. Lewis, K. Polanyi, & J. Kitchen (Eds.), Christianity and the Social Revolution. London: Gollancz. Raico, R. (2012). Classical Liberalism and the Austrian School. Auburn, AL: Ludwig von Mises Institute. Rand, A. (1964, March). Interview. Playboy. http://www.discoveraynrand.com/ playboyinterview.html.

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Rapoport, R. (2000). Hillsdale: Greek Tragedy in America’s Heartland. Oakland, CA: RDR Books. Read, L. (1965). The Miraculous Market. LewRockwell.com https://www. lewrockwell.com/1970/01/leonard-e-read/the-miraculous-market/. Ream, N. (1983, July). The Law That Makes Us Free. Notes From FEE. https:// history.fee.org/publications/the-law-that-makes-us-free/. Reisman, G. (2001). Mises as Mentor an Interview with George Reisman. Austrian Economics Newsletter, 21(3). https://mises.org/system/tdf/aen21_3_ 1_0.pdf?file=1&type=document. Repp, K. (2000). Reformers, Critics, and the Paths of German Modernity: Anti-Politics and the Search for Alternatives, 1890–1914. Cambridge, MA: Harvard University Press. Rickenbacker, W. F. (Ed.). (1974). The Twelve-Year Sentence Radical Views on Compulsory Education. LaSalle, IL: Open Court. Ritenour, S. (2002). The New Generation: Part 1 (Edward Stringham, Shawn Ritenour, Peter Calcagno). Austrian Economic Newsletter, 2(2) (Summer). https://mises.org/library/new-generation-part-1-edward-stringham-shawnritenour-peter-calcagno. Ritenour, S. (2007, August 1). Biography of Wilhelm Röpke (1899–1966): Humane Economist. Mises Daily. https://mises.org/library/biography-wilhelmr%C3%B6pke-1899-1966-humane-economist. Robbins, L. (1971). Autobiography of an Economist. London: Macmillan. Rockwell, L. H., Jr. (1998, September 15). Mises and Liberty. ‘This was the keynote address at the Ludwig von Mises Institute’s new building dedication and conference on the great Austrian economists, June 5–6, in Auburn, AL.’ Mises Institute. https://mises.org/library/mises-and-liberty. Rockwell, L. H., Jr. (2016, December 21). A Message from Lew Rockwell. https://mises.org/blog/message-lew-rockwell. Röpke, W. (1962, January). Farewell Message of the Resigning President. Mont Pelerin Society Quarterly, 3(4). MPS Archives Box 3.6. Rothbard, M. N. (1979, January). Rothbard Replies. Libertarian Review, 11. http://www.unz.org/Pub/LibertarianRev-1979jan-00010. Rothbard, M. N. (1992a). Keynes the Man. In M. Skousen (Ed.), Dissent on Keynes: A Critical Appraisal of Keynesian Economics. New York: Praeger. Rothbard, M. N. (1992b, January). Right-Wing Populism: A Strategy for the Paleo Movement. Rothbard Rockwell Report, 5–14. http://rothbard.altervista.org/articles/right-wing-populism.pdf. Rothbard, M. N. (2000). Egalitarianism as a Revolt Against Nature and Other Essays. Auburn, AL: Ludwig von Mises Institute.

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Rothbard, M. N. (2002 [1982]). The Ethics of Liberty. Auburn, AL: Ludwig von Mises Institute. Sachar, H. M. (2015). The Assassination of Europe, 1918–1942: A Political History. Toronto: University of Toronto Press. Shenfield, A. (1981, December). Capitalism Under the Tests of Ethics. Imprimis, 10(12). MPS Archives Box 95. Skousen, M. (1991). Economics on Trial: Lies, Myths and Realities. Homewood, IL: Business One Irwin. Stewart, K. (2012). The Good News Club: The Christian Right’s Stealth Assault on America’s Children. New York: Public Affairs. Stewart, J. B. (2017, July 13). As a Guru, Ayn Rand May Have Limits. Ask Travis Kalanick. New York Times. https://www.nytimes.com/2017/07/13/ business/ayn-rand-business-politics-uber-kalanick.html. Stigler, G. J. (1988). Memoirs of an Unregulated Economist. New York: Basic Books. Sublett, S. (1987, July 30). Libertarians’ Storied Guru. Washington Times. MPS Archives Box 45.7. Terrell, T. D. (2003). The Vocation of Economics: An Interview with Timothy Terrell. Austrian Economics Newsletter, 23(1). https://mises.org/library/vocationeconomics-interview-timothy-terrell. Terrell, T. D. (2005). Rushdoony and His Impact on Economics. Chalcedon Foundation website. https://chalcedon.edu/magazine/rushdoony-and-hisimpact-on-economics. Terrell, T. D. (2007, March 1). The Dollar’s Decline and American Prosperity. Chalcedon Foundation website. https://chalcedon.edu/magazine/the-dollarsdecline-and-american-prosperity. Terrell, T. D. (2016). The Economics and Ethics of Frederick Nymeyer. Quarterly Journal of Austrian Economics, 19(3), 267–287. Tucker, J. (2014, March 18). What Explains the Brutalism Uproar? The Libertarian Standard. http://libertarianstandard.com/2014/03/18/whatexplains-the-brutalism-uproar/. Turner, H. A. (1985). German Big Business and the Rise of Hitler. New York: Oxford University Press. Weyr, T. (2005). The Setting of the Pearl: Vienna Under Hitler. Oxford: Oxford University Press.

9 ‘German Villains and Austrian Victims’

1 ‘Facts,’ Labour Unions and Wartime Propaganda: Hayek’s Cold War Model of Knowledge Construction and Dissemination The Cold War and fears of a Russian invasion were fuelled by journalists and fiction writers. ‘Deacon’ McCormick wrote ‘faction’—a mixture of the banal and the fraudulent. He also wrote novels and promoted astral travel (Sayer 2015). One of Robert Moss’ novels was described in Commentary as: ‘The ending is too good to be true—things will not be nearly so easy—and The Spike is not going to win any awards for literary excellence. There is too much formula sex and the manuscript needed a more aggressive editorial hand’ (Ledeen 1980). Moss (1973), who (implausibly) described how Allende was plotting a blood-thirsty coup, also describes himself as a dream teacher, on a path for which there has been no career track in our culture. He is the creator of Active Dreaming, an original synthesis of dreamwork and shamanism. Born in Australia, he survived three © The Author(s) 2018 R. Leeson, Hayek: A Collaborative Biography, Archival Insights into the Evolution of Economics, https://doi.org/10.1007/978-3-319-77428-2_9

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near-death experiences in childhood. He leads popular seminars all over the world, including a three-year training for teachers of Active Dreaming. A former lecturer in ancient history at the Australian National University, he is a best-selling novelist, journalist and independent scholar. He has published twelve books on dreaming, shamanism and imagination. Moss started dreaming in a language he did not know that proved to be an archaic form of the Mohawk language. Helped by native speakers to interpret his dreams, Moss came to believe that they had put him in touch with an ancient healer, an arendiwanen or ‘woman of power’ and that they were calling him to a different life. Out of these experiences he wrote a series of historical novels and developed the practice he calls Active Dreaming, an original synthesis of contemporary dreamwork and shamanic methods of journeying and healing. A central premise of Moss’s approach is that dreaming isn’t just what happens during sleep; dreaming is waking up to sources of guidance, healing and creativity beyond the reach of the everyday mind.1

Grinder (1977, 8) reported that ‘Professor Stephen Strasnick of the Philosophy Department of Stanford University, under the auspices of the Cato Institute, is now writing a college-level textbook on libertarian theory.’ Although this was not apparently completed, Strasnick (1979) published a ‘Comment’ in the Journal of Libertarian Studies. And in his Miraculous Journeys of a Mundane Man Illustrated True Stories of Other Lives, Other Worlds, and Visionary Travel, Strasnick (2017) reported that ‘In repeated visits over an extended period, the author, very much a mundane man, experienced a plethora of strange visions and apparitions. These led him on a journey across multiple realms and worlds, ultimately taking him into the celestial chambers of a mysterious whitebearded being, where final secrets were revealed, before returning him to earth, transfigured. The narrative chronicle of the author’s journey is presented in this volume, beautifully illustrated by the whimsical drawings of the gifted artist, Diana Moll.’ Shenoy (11 May 1982) nominated for MPS membership one of her Australian undergraduate students, Tony Dimmitt, because he was ‘active’ in the ‘Liberal Party (i.e. Conservative Party)’ and was ‘pushing the right sorts of ideas.’2 The Sydney Morning Herald reported that

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Dimmitt was a ‘seekers of wisdom’ who wore a ‘blindfold in an organic dance’ at the ‘Mind Body Spirit festival’ (Lawson 2003). Cold Warriors promoted mythical statements. The 1989 collapse of the Berlin Wall was rapidly followed by elections in the former Soviet Empire. ‘Deacon’ McCormick (1990, 197) appeared to suggest that this was part of the Soviet master plan. He asserted that Mikhail Gorbachev stated in November 1987: ‘We are travelling to a new world, a new world of communism. We shall never deviate from this path.’ This was supposedly a continuation of the philosophy allegedly outlined in 1972 by Soviet leader Leonid Brezhnev: ‘we must use every means we can to devise to subvert orderly government, especially those making a success of parliamentary democracy [the source of the emphasis is not revealed].’ One method of achieving this was revealed by ‘Vladimir Kryuchkov, shortly to become the head of the KGB,’ who stated in a ‘Soviet Foreign Ministry publication’ that the Kremlin’s priority was to cultivate ‘green’ movements in West Germany and other nations of the West.

Citing Nixon’s (1980, 23) The Real War, Richard Fisher (1986, 2), the Heritage Foundation’s ‘Distinguished Fellow in China Policy,’ stated that Brezhnev had ‘admitted’ that ‘Our aim is to gain control of the two great treasure houses on which the West depends—the energy treasure house of the Persian Gulf and the mineral treasure of central and southern Africa.’ Davenport (30 August 1985) sent this alleged quote to all US Senators urging them to vote against the 1985 Anti-Apartheid legislation.3 (Simultaneously, he encouraged President Reagan to distinguish between ‘make believe and harsh reality’ and veto the Bill.’4) But according to They Never Said it: A Book of Fake Quotes, Misquotes, and Misleading Attributions, the Library of Congress Research Service discovered no evidence that Brezhnev had ever made such a flowery statement—which appears to have originated in the far-right American Sentinel (Boller and George 1989, 10). Before the ‘Great’ War, fears of a German invasion were fuelled by journalists and fiction writers. Erskine Childers’ (1903) Riddle of the Sands was followed by a Daily Mail serialisation of one of William

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Tufnell Le Queux’s (1906) invasion fantasies, The Invasion of 1910 with an Account of the Siege of London, which, in book form, sold more than one million copies. Le Queux (1894) wrote 150 novels including a best-selling invasion fantasy The Great War in England in 1897 (Twigge et al. 2008, 20). ‘Deacon’ McCormick (1973, 105; 1993, 202; 1978, 277, Chapter 4, n. 1) was alert to the impact of both Childers and Le Queux: ‘Childers was in advance of official naval intelligence.’ During the Great War, the British government (like other governments) used propaganda with a quasi-academic surface appearance. In September 1914, a group of writers, including Arthur Conan Doyle, H.G. Wells, Rudyard Kipling and George Macaulay Trevelyan, plus newspaper editors and owners was convened at Wellington House, ­ London, as the British War Propaganda Bureau (Taylor 1999, 36; Sanders 1975; Lashmar and Oliver 1998). ‘Deacon’ McCormick (1969, 221) noted Trevelyan’s role and the ‘special’ place of ‘propaganda writing.’ The mystery of the 1916 sinking of the HMS Hampshire was solved by ‘Deacon’ McCormick (1959, 53, 58, 98, Chapter 8, 58, 84, 175–176). A verbatim quote from Rasputin was used to reveal Russian knowledge of Lord Kitchener’s death: ‘Ah I see’ said Rasputin to the Czar, ‘so you were drunk and told your friends about the telegram.’

An eye-witness of the 1916 sinking, who ‘declines to have her name published,’ recounted in verbatim detail the events of a night over forty years before; an agent, with verbatim recall of the conversations overheard while spying in a Turkish bath in 1916, was quoted; and a 1936 conversation with the long-dead IRA leader, Frank Ryan, was reported, verbatim. More than forty years after the sinking, ‘Deacon’ McCormick found unanimity: Orcadians describe the Admiralty’s alibi … as ‘absolute nonsense.’

The sinking of the unarmed Lusitania (6 May 1915) was followed— the following day—by the publication of Bryce Report. The Bryce Report (overseen by James Bryce, the former British Ambassador to

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Washington and co-signed by the historian, H.A.L. Fisher) contained sensational accusations from anonymous witnesses, verified by ‘diaries taken from the German dead.’ The Report concluded that ‘Murder, lust, and pillage prevailed over many parts of Belgium on a scale unparalleled in any war between civilised nations during the last three centuries.’ This pattern was established early in the War: ‘German officers and men speedily accustomed themselves to the slaughter of civilians … On one occasion children were even roped together and used as a military screen against the enemy, on another three soldiers went into action carrying small children to protect themselves from flank fire.’5 Geoffrey Winthrop Young (1953, 157) described the Parisian barbarism of ‘spy fever … shops with German names were being looted … the brutality of spy panic was more shocking than any destruction I saw later in battle.’ Bertrand Russell (1935, 329–330) described the ‘fear and rage and blood lust’ conjured up by ‘apparently well-authenticated atrocity stories.’ Along with ‘war fever’ came ‘irrational beliefs’ about ‘prevailing myths’—all part of a nation in ‘a state of violent collective excitement.’ After the publication of the Bryce Report, G.M. Trevelyan wrote to a friend that ‘truly we are fighting savages who will destroy us if they win’ (cited by Raina 2001, 91). In 1918, Maxwell ‘Max’ Aitken, 1st Baron Beaverbrook, owner of The Daily Express, Sunday Express and London Evening Standard, became Minister of Information; and Alfred Harmsworth, 1st Viscount Northcliffe, co-owner of The Times, The Sunday Times, Daily Mail and Daily Mirror, became Director for Propaganda.6 Hurrah For The Blackshirts! Fascists and Fascism in Britain Between the Wars documents the role that Northcliffe and his brother and Daily Mail and Daily Mirror co-owner, Harold Harmsworth, 1st Viscount Rothermere, played in promoting German and British fascists as opponents of ‘Red Hooligans.’ After initially supporting Oswald Mosley’s British Union of Fascists 1934 Olympia rally, the Rothermere/Northcliffe press became, in public, more restrained (Pugh 2005). In private, Rothermere congratulated Hitler on his 1939 invasion of Czechoslovakia: his ‘walk into Prague’ (cited by Tweedy and Day 2005). Rothermere (30 June 1939) wrote: ‘My Dear Führer, I have watched with understanding and interest the progress of your great and

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superhuman work in regenerating your country.’ Rothermere (7 July 1939) told Joachim von Ribbentrop, Hitler’s Foreign Minister that ‘Our two great Nordic countries should pursue resolutely a policy of appeasement for, whatever anyone may say, our two great countries should be the leaders of the world’ (Norton-Taylor 2005). The British Ministry of Information was re-formed in 1939. On 9 September 1939, ‘von’ Hayek sought to persuade the BBC to employ him for propaganda broadcasts instead of the ‘Viennese Jew’ with a ‘very unpleasant’ Jewish accent that they were currently employing. He proposed the establishment of a Propaganda Commission to aid the war effort: it was ‘important, in view of the prejudices existing not only in Germany, not to have a person of Jewish race or descent on the commission’ (Leeson 2015, Chapter 2). The von Hayek’s were Nazis. The Mises’ family ‘von’ coat of arms (acquired in April 1881) contained the Stars of the Royal House of David, a symbol of the Jewish people (Hülsmann 2007, 15). Six decades later, another Austrian forced all those with non-Aryan blood lines to wear this coat of arms on their coats; the railroads, for which the Mises family was ennobled, transported millions to extermination camps. At the end of World War II, the functions of the Ministry of Information were transferred to the Central Office of Information.7 The British Foreign Office’s Information Research Department (IRD) was formed at the outset of the Cold War (1948) to circulate grey or black propaganda.8 The use of the word ‘Research’ was ambiguous: a 1955 IRD report indicated that research would be undertaken ‘solely in order to provide propaganda material and otherwise would probably not be undertaken’ (cited by Jenks 2006, 63; Jenks 2015). According to British National Archives scholars, the IRD favoured ‘character assignation and the circulation of scurrilous rumours’ (Twigge et al. 2008, 81). The Congress for Cultural Freedom (CCF) was founded in June 1950 by Hugh Trevor-Roper and others; Michael Polanyi (15 May 1954) invited Hayek to attend the 1955 CCF conference on ‘The Future of Freedom.’9 According to an article in the Central Intelligence Agency’s Studies in Intelligence journal, the CCF was ‘widely considered one of the CIA’s more daring and effective Cold War covert operations … despite the embarrassing exposure of its CIA sponsorship in 1967 … It

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published literary and political journals such as Encounter … ’ (Warner 1995).10 The IRD jointly funded Encounter, which provided authors with a ‘lifeline … intellectual company and an office in the middle of London’ (Rees 1972, 227; Jenks 2006, 109). Encounter (together with The Times, the planned outlet for Hayek’s essay exposing Pigou as a Soviet agent) failed to survive the end of the Cold War (1953–1991). In ‘Death of the Department that never was,’ The Guardian (27 January 1978) reported ‘secret lists were compiled of approved journalists and trade unionists to whom material was offered …’ About 100 journalists were on the list IRD, including five from The Sunday Times. In The British Connection, ‘Deacon’ McCormick (1979, 254) complained: ‘Another propaganda defeat has been the highly secretive demise of the IRD.’ Getting the date of its inception wrong (1949, rather than 1948), he added that ‘IRD worked on a basis of mutual trust between the department and the recipients of the service.’ As he approached retirement age, ‘Deacon’ McCormick (1969, 416) appeared to be almost nominating himself for the position of ‘Director of Literary Intelligence … literary espionage … can in the future be almost as important as scientific espionage.’ ‘Deacon’ McCormick was Assistant Foreign Manager (1958–1963) and Foreign Manager (1963–1973) of The Sunday Times. Simultaneously, the MPS member William Rees-Mogg was Deputy Editor of The Sunday Times; and Charles Douglas-Home was at The Daily Express as deputy to defence correspondent, Chapman Pincher, the author of Their Trade is Treachery (1981), one of ‘Deacon’ McCormick’s spook-hunting rivals. In The Truth Twisters, ‘Deacon’ McCormick (1986, 10, 33) cited Sun Tzu, the presumed author of The Art of War: ‘all warfare is based on deception’; adding that the Cold War had been ‘largely fought by disinformation tactics.’ ‘Deacon’ McCormick (1978, 133) reported Clausewitz’s dictum: ‘a great part of the information obtained in war is contradictory, a still greater part is false, and by far the greatest part is of a doubtful character.’ ‘Deacon’ McCormick (1976, 1, 6) explained that the con-man was a person apart from the ordinary criminal practitioner of fraud … Quite a few have been brilliant practical jokers or fantasists … the true

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con-trickster has ‘something extra’ which in a way amounts to a spark of genius … The con-trickster is in his own sphere of action a craftsman, chiselling away at his imposture with all the skill and patience of a sculptor, introducing all the techniques of an actor. He is an artist to the finger-tips.

Some have acted ‘for patriotic reasons, or for some political cause … Most of them have had something of the Walter Mitty in their make-up.’ The ‘political conmen’ forged documents and ‘some politicians were prepared to believe anyone who spread sufficiently virulent reports …’ In 1934, Thomas Walker was able to con Lady Houston because she had undertaken a ‘self-imposed anti-socialist crusade’ and had been presented with incriminating letters which contained Prime Minister MacDonald’s signature, which had been forged with ‘skill.’ When asked: ‘what has been the most misleading theoretical approach in economics?’ the recipient of the 1972 Nobel Prize for Economic Sciences, Kenneth Arrow (2009, 268), replied: ‘The Austrian a priori dogmatism (von Mises, especially; Hayek, to a lesser degree).’ Hayek’s (1945) ‘The Use of Knowledge in Society’ was selected as one of the top 20 articles published in the American Economic Review during its first 100 years (Arrow et al. 2011). In his Nobel Banquet speech, Hayek (1974a) outlined his approach to ‘Knowledge’: ‘the Nobel Prize confers on an individual an authority which in economics no man ought to possess … the influence of the economist that mainly matters is an influence over laymen: politicians, journalists, civil servants and the public generally. There is no reason why a man who has made a distinctive contribution to economic science should be omnicompetent on all problems of society—as the press tends to treat him till in the end he may himself be persuaded to believe. One is even made to feel it a public duty to pronounce on problems to which one may not have devoted special attention … I am therefore almost inclined to suggest that you require from your laureates an oath of humility, a sort of hippocratic oath, never to exceed in public pronouncements the limits of their competence.’11 According to Mises (1974 [1952], 170), the historian, T.S. Ashton, presented an MPS paper which suggested that much contemporary history was mere ideology, consisting of ‘tortured facts’ and ‘concocted

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legends.’ Hayek also berated the ‘appalling effects of the use of history as propaganda’ (Hartwell 1995, 38, 40–41). These concerns led to a 1954 University of Chicago volume on Capitalism and the Historians. In his introductory essay, Hayek (1954, 4, 7, 9) referred to the ‘socialist interpretation of history which has governed political thinking for the last two or three generations … Most people would be surprised to learn that most of what they believe about these subjects are not safely established facts but myths, launched from political motives.’ Historical beliefs were sometimes ‘the effects rather than the cause of political beliefs. Historical myths have perhaps played nearly as great a role in shaping opinion as historical facts.’ Before his Nobel Prize, Hayek (17 April 1967) informed the Administrator of Manuscripts at Syracuse University that he would probably leave instructions to destroy the ‘whole’ lot of his manuscripts, correspondence, etc.12 But after the Nobel Prize, he left a large quantity of for-posthumous-consumption oral history interviews which his disciples—resumably for fund-raising motives—are suppressing (Leeson 2015, Chapter 2). Hayek (1978a) told Armen Alchian: ‘if it’s on that unmarked tape, I’m quite willing to talk about it.’13 For posthumous purposes, Hayek told Cubitt (2006) about the Austrian origins of Nazism and the activities of his Nazi family—he must have known that the 1974 Nobel Prize could have had the unintended consequences of drawing attention to the labour liquidation that he and Mises promoted and which assisted Hitler’s rise to power. Using a spear-throwing analogy, Hayek (1976, 10–11) made a ‘Personal confession  ’: he ‘largely withdrew from the debate’ over Keynes’ (1936) General Theory ‘since to proclaim my dissent from the near-unanimous views of the orthodox phalanx would merely have deprived me of a hearing on other matters about which I was more concerned at the time.’ Referring to ‘The lost generation,’ Hayek expressed his contempt for the observational capacities of economists: ‘The whole theory underlying the full employment policies has by now of course been thoroughly discredited by the experience of the last few years. In consequence the economists are also beginning to discover its fatal intellectual defects which they ought to have seen all along [emphasis added].’

404     R. Leeson

Leube (2016) recalls: Right before the Nobel, I organized a conference in Vienna, and a major newspaper’s headline was ‘Hayek = unemployment.’ A few months after the award, everybody in Austria was claiming ownership of Hayek. The Academy of Science, which had ignored him until then, invited Hayek to be its corresponding member. I still remember how entertained he was when he received those letters.

One week after the announcement of his Nobel Prize, Hayek (16 October 1974) told readers of The Daily Telegraph: ‘No economist who has lived through the experience of the 1930s will doubt that extensive and prolonged unemployment is one of the worst disasters which can befall a country.’ Mises (1998 [1949], 270, 310) described entrepreneurs as those who ‘steer the ship’—deflation tends to steer debt-­ financed entrepreneurs into bankruptcy; and two months after receiving his Nobel Prize, Hayek (1978b [8 February 1975], 206) used the same analogy in a nuanced confession associated with ‘secondary deflation’— effects of which ‘may be worse, and in the 1930s certainly were worse than what the original cause of the reaction made necessary, and which have no steering functions to perform.’ Hayek then had to ‘confess’ that 40 years previously, he had ‘argued differently’ and that he had ‘since altered’ his opinion—not about the ‘theoretical’ explanation but about the ‘practical possibility’ of removing the obstacles to the functioning of the system in a ‘particular way.’ Hayek (1977) also asserted that the Keynesian ‘promise of full employment by cheap money methods swept the world so much that I got so disgusted with monetary policy, which was once my special field, that for 30 years I didn’t touch it.’ The 30 years that Hayek was referring to corresponds with the three decades between his self-reinvention as the Road to Serfdom (1944) scourge of ‘Socialists of All Parties’ his 1974 Nobel Prize. Gregory, ‘von’ Hayek, Arnold Plant and Robbins (19 October 1932) told readers of The Times that ‘many of the troubles of the world at the present time are due to imprudent borrowing and spending on the part of the public authorities.’ They promoted, instead, private savings (deposits

9  ‘German Villains and Austrian Victims’     405

into a banking system that had severely curtailed lending), plus faith in a stock market-led recovery: ‘A rise in the value of old securities is an indispensable preliminary to the floatation of new issues.’ Hayek (August 1980) later told International Management that it he had not been promoting recovery: ‘I’m sure that the UK would be better off now if in the 1930s there had been bigger and better bankruptcies. Policies which prevented this kept many firms alive, or prevented them re-organizing, which amounts to the same thing.’ Simultaneously, in ‘1980s Unemployment and the Unions, Essays on the Impotent Price Structure of Britain and Monopoly in the Labour Market,’ Hayek (1984a [1980], 17) asserted that ‘People seem to forget that the bankruptcy of a company need not mean the disappearance of its productive equipment but merely the replacement of an unsuccessful management by a new one.’ Boettke (2007, 179) asserts: ‘inflation is socially destructive because it distorts the pattern of exchange of production and breaches of trust in the monetary unit, which links all exchange activity’; and two volumes of The Collected Works of F.A. Hayek are devoted to Good Money (1999a, b). Yet Hayek sought to debauch the currency: unanticipated deflation (which Hayek and Mises promoted to deepen the Great Depression) drives otherwise sound business into bankruptcy. The defective ‘management’ exists at the public policy level. Through fraud, Hayek also debauched the currency of academic discourse. The upper Habsburg Estates were primarily focused on maintaining the ‘privileges of their aristocratic members … the nobles regarded the Austrian people as an extension of their own peasantry, their only function to keep the nobility in luxury’ (Taylor 1964, 14, 188–189); ‘von’ Hayek (1978a) observed that in the ‘countryside of southwest England, the class distinctions are very sharp, but they’re not resented. [laughter] They’re still accepted as part of the natural order’14; and ‘von’ Mises (2007 [1958], 11) told Rand: ‘You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you.’ Mises lived with his mother until he was 53: the ‘only’ explanation that his fiancé could find was that his mother’s household was ‘running smoothly’ their two maids had been with them for about twenty years

406     R. Leeson

and Mises could ‘come and go’ whenever it ‘pleased’ him and could work without being ‘disturbed’ (Mises 1984, 25). Hayek (1978a) ‘moved, to some extent, in aristocratic circles, and I like their style of life.’15 Hayek’s (1994, 39, 78) maternal grandparents ‘kept at least three servants’; during the ‘Great’ War, Hayek shared an ‘Italian servant girl’ who had ‘been quite willing to sit on his lap’ (Cubitt 2006, 46, 76, 240). But in London, Hayek (1994, 68) had been reduced to one ‘girl’: ‘We were of course still running the house with the help of a regular maid.’ The 1901 British census reported that 31.6% of females over the age of 10 were in paid employment: there were 1,690,686 female domestic servants (40.5% of the adult female working population).16 Hayek’s style of life was challenged by ‘the servant problem’: ‘By the early 20th century, the rich were getting the uncomfortable sense that the foundations of the social order were shifting’ (Economist, 17 December 2011).17 Between 1910 and 1923, the proportion of the Viennese workforce employed as domestic servants fell from 9.3 to 6.3% (Kirk 1996, 14, Table 0.2). In 1924, the first Labour Prime Minister, Ramsay MacDonald, defined the ‘true separation in society’ as ‘the moral and economic line between the producer and the non-producer, between those who possess without serving and those who serve’ (cited by Steadman Jones 1983, 244; Todd 2014, 14). Virginia Wolf famously dated a societal change (relating to deference to the ‘natural’ or spontaneous order): ‘On or around December 1910, human character changed’—the Great Depression was an opportunity to reverse this change. In promoting the Austrian deregulation of the labour market, Davenport (1983) believed he was promoting—not Hayek’s neo-feudal agenda but—‘liberty’: Back in the seventeenth century Sir Henry Maine argued that the progress of civilization might be measured as a society passes from status to contract. With this exponential jump the West threw off the last vestiges of feudalism and serfdom and entered into an era of Liberty under Law. In the past fifty years governments have been rushing pell-mell to reverse such progress. Deregulating Labor Relations [Heldman et al. 1981] is a sustained plea for turning the clock forward again.

9  ‘German Villains and Austrian Victims’     407

If the demand for domestic servants is unit elastic, three servants would cost as much as one. How could supply be shifted outwards so as to triple the number that declassed aristocrats could afford? As Hayek (1976 [30 September 1975]) explained to readers of The Daily Telegraph: ‘The volume of employment depends on the correspondence of demand and supply in each sector of the economy and therefore on the wage structure on the one hand and the distribution of demand between the different sectors on the other.’ The ‘guiding idea’ of Hayek’s (1977, 13; 1978a; 1979) ‘development’ was the ‘discovery’ that the ‘price system is really essential as a guide [Hayek’s emphasis] to enable people to fit into an order.’ In the ‘Austrian tradition, the price is something which tells people what to do.’ ‘And the curious thing is that in the countryside of southwest England, the class distinctions are very sharp, but they’re not resented. [laughter] They’re still accepted as part of the natural order.’18 In a simple two-sector neoclassical model where labour is employed in either a unionized sector or a non-unionized domestic service sector, deflation increases the real wage in only one sector. Unionized workers will resist downward reductions in the nominal wage—and unemployment will increase: the unemployed will tend to seek work in the non-unionized sector. This will increase supply in that sector and exert downward pressure on the equilibrium in-kind ‘wage.’ With respect to the three in-kind costs of domestic service ‘wages’: lodging is unchanged; food will automatically fall along with deflation; and pocket money can be adjusted downwards by the employer to keep its purchasing power constant. In a Face the Press interview, Hayek was asked: ‘In a speech before a congressional group not long ago, you said that the threat to the free-enterprise system of our society has never been more imminent than it is now. What did you mean by that?’ Hayek (1975b [24 February]) replied: ‘Well it’s a problem of first persuading the public that, in the present situation, the pressure of the [labour] trade union does not deserve public support. That you must achieve before you can do anything by legislation reducing the powers of the [labour] trade unions. It must be a long process. I don’t see any immediate cure.’

408     R. Leeson

Credit crunches can—and do—paralyze an economic system; while labour unions can cause inconvenience to the public and benefit ‘insiders’ to the detriment of ‘outsiders.’ In ‘Inflation and Unemployment,’ Hayek (1974b) asserted: ‘What is known in the world as the British disease is, of course, simply the peculiar system of British [labour] trade unions,’ Hayek prioritized liberty: ‘desperately urgent as a drastic reform of the British monetary system is, I seriously doubt whether it can be successfully undertaken before the fatal [emphasis added] privileges whose grant to unions has conferred upon them the power to paralyse the economic system have been rescinded much more completely than is yet being considered.’19 In 1933, Lackmann (1978) became Hayek’s research assistant at the LSE: ‘I actually worked on secondary depressions. That is to say, what Hayek first used to call the process of secondary deflation, a word that had been coined by a German economist to denote that part of the process of depression which goes beyond any kind of primary maladjustment. That is to say, that kind of depression that would not be an adjustment process in the Hayekian sense. It was by then (1933) admitted that a depression of this kind could develop and I think everybody admitted that by 1933 the world was in a process of secondary depression.’ After Corporal Hitler had come to power—and revealed that he, and not his social superiors, would do the steering—Hayek apparently changed tack: ‘there was an obvious difference between the point of view expressed by Hayek, Robbins and their letter’ to The Times of ‘October, 1932, and their willingness to admit the following year that a secondary depression was possible’ (Lackmann 1978). After a visit to Nazi Germany in spring 1933, Dalton noted that ‘Geistige Gleichschaltung [intellectual coordination] is the Nazi ideal in education. There is something of this to in the economics department of the [London] school of economics’ (cited by Durbin 1985, 103). Gleichschaltung was the process by which Germany became Nazified (1933–1937): • 2 May 1933: The labour union association Allgemeiner Deutsche Gewerkschaftsbund (ADGB) and other associations were replaced by the Deutsche Arbeitsfronf (German Labour Front) and ADGB leaders were imprisoned;

9  ‘German Villains and Austrian Victims’     409

• 14 July 1933: The Nazis were declared the only political party (Gesetz gegen die Neubildung von Parteien—‘The Law against the establishment of political parties’); • 1 August 1934: ‘The Law Concerning the Highest State Office of the Reich’ prescribed that upon the Paul von Hindenburg’s death all presidential powers would be transferred to the ‘Führer und Reichskanzler Adolf Hitler ’; • 15 September 1935: The Nuremberg Laws prohibited marriages and extramarital intercourse between Jews and Germans (‘Law for the Protection of German Blood and German Honour’) and restricted citizenship to those of German or related ‘blood’ (the ‘Reich Citizenship Law’). On 7 March 1936, the Nazis remilitarized the Rhineland—in violation of the terms of the Treaty of Versailles and the Locarno Treaties: war began to look likely. In The Road to Serfdom (1944), Hayek (1978a) responded by apportioning the blame for Hitler—not on the deflation that he and Mises had promoted nor on the advocacy of his proto-Nazi and later card-carrying Nazi family—but on ‘The Socialists of All Parties’: ‘Well, of course, the original occasion was my analysis of the causes of the intellectual appeal of the Nazi theories, which were very clearly … the rise of Hitler was due to an appeal to the great numbers. You can have a situation where the support, the searching for support, from a majority may lead to the ultimate destruction of a democracy.’20 Two years before World War II, Hayek (1999a [1937], 184) declared: ‘Even though there are many concerns about organizing public works ad hoc during a depression, everything speaks in favour of having public agencies perform during a depression whatever investment activities need to be carried out in any case and can possibly be postponed until then. It is the timing of these expenses that presents a problem, since funds are often extremely hard to raise in the midst of a severe depression and the accumulation of reserves in good times generally faces the objections mentioned above. There is little question that in times of general unemployment the state must intervene to mitigate genuine hardship either by disbursing unemployment compensation or, as in earlier times, by legislation to help the poor.’

410     R. Leeson

As war approached, Hayek (1939, 64) retreated still further: ‘There may be desperate situations in which it may indeed be necessary to increase employment at all costs, even if it be only for a short period— perhaps the situation in which Dr. Brüning found himself in Germany in 1932 was such a situation in which desperate means would have been justified. But the economist should not conceal the fact that to aim at the maximum of employment which can be achieved in the short run by means of monetary policy is essentially the policy of the desperado who has nothing to lose and everything to gain from a short breathing space.’ By July 1979, Hayek (2009b [1979])—a serial liar—was pretending to have become an anti-deflationist: ‘I agree with Milton Friedman that once the Crash had occurred, the Federal Reserve System pursued a silly deflationary policy. I am not only against inflation but I am also against deflation. So, once again, a badly programmed monetary policy prolonged the depression.’ Citing these words, Rizzo (2009) illustrates the quality of NYU-Austrian ‘knowledge’: ‘So now we have not only the logic of Hayekian economics (both micro and macro) and the words of the man himself that deflation (of the increase in the relative demand to hold variety) should be avoided. I claim infallibly [emphasis added] that this is the Hayekian position. We can argue about whether he was right but we cannot profitably argue about whether this was his position. QED.’ Would Rizzo give an A to an NYU student who parroted this ‘Truth’? Would he fail an NYU student for providing the evidence that reveals it to be religious nonsense? How did so many Austrian Truth believers come to be employed at NYU? Lackmann (1978) interpreted Hayek as having promoted ‘continuous deflation’: the ‘Austrians’ seemed to be committed to a policy of continuous deflation whatever happened. Yes, I’m quite sure that the apparent insistence of the ‘Austrians’ that the depression must run its course in the sense that both prices and wages in general must fall seemed to make it increasingly difficult for most other economists to support it, because it was by then obvious that wages didn’t fall, not in the Britain of the 1930s anyway.

But Hayek (1978b [8 February 1975], 206) claimed that he promoted not ‘continuous deflation’ but—a ‘short process’:

9  ‘German Villains and Austrian Victims’     411

I did then believe that a short process of deflation might break that rigidity of money wages, that is what economists have since come to call their ‘rigidity downwards’ or the resistance against the reduction of some particular money wages, and that in this way we could restore a determination of relative wages by the market.

If real wages are perceived as being ‘too high,’ there are three remedies. The first is to increase human capital and the productivity of labour (which Pigou promoted). Einzig (1937, 204) described the second: at the LSE, Robbins and his collaborators ‘set up a cult of the Austrian economist, Professor Ludwig von Mises, with his fanatic belief in cutting down prices, and especially wages, as a remedy for all evil [in the Great Depression].’ But cutting nominal wages (in response to the return to the Gold Standard at pre-war parity) led to the 1926 General Strike which intensified class warfare and radicalized Keynes. In sourcing a ‘classical’ whipping boy, Keynes (1936) should have chosen either Robbins or Hayek—but, for polemical reasons, chose Pigou (Leeson and Schiffman 2015). His General Theory promoted the third alternative: raising the price level. Like ‘von’ Mises, ‘von’ Hayek was a paid, aristocratic lobbyist for employer trade unions. Raising the price level tends to promote labour unions—who pursue catch-up increases in nominal wages through collective bargaining. Here Keynes (1936, Chapter 2), in discussing the ‘Postulates of Classical Economics,’ miscalculated: ‘But since no trade union would dream of striking on every occasion of a rise in the cost of living, they do not raise the obstacle to any increase in aggregate employment which is attributed to them by the classical school.’ Ignoring the complexities of the labour market (efficiency wages etc.), in a simple neoclassical model, if wages don’t ‘clear’ a particular sector, unemployment in that micro-market may increase—but the overall macro-economy will continue to function (the unemployed would tend to seek work in alternative sectors). But referring to the ‘resistance against the reduction of some particular money wages,’ Hayek (16 October 1974) informed Daily Telegraph readers: ‘This seems to me still an indispensable condition if the market mechanism is to function satisfactorily. But I no longer believe that it is practically possible to achieve this in this manner [emphases added].’

412     R. Leeson

Hayek must have been amazed that his aristocratic demeanour protected him from being associated with his family’s Nazi ideology and the deflation-assisted rise of Hitler. Robbins knew about Hayek’s Nazi relatives (Howson 2011, 319)—but this knowledge failed to pass from person to person. Mises (1985 [1927]) defended and praised political ‘Fascism’—which Hayek (1995 [1929], 68) apparently described as Mises’ ‘ruthless consistency’ in developing ‘economic liberalism to its ultimate [emphasis added] consequences’ (Chapter 2, above). But Hayek (1980) later told Forbes that he saw ‘very little difference between fascism and socialism.’ When the Cato Policy Report asked when he had realized the ‘important incentive and information functions played by market prices,’ Hayek (1983) replied by using one of his dissembling words: Well, it’s a very curious story, in a way, that I was led to put the emphasis on prices as a signal of what to do.’ ‘Economics and Knowledge’ (Hayek 1937) had been ‘originally written to persuade my great friend and master, Ludwig von Mises, why I couldn’t accept all of his teaching.’ The main purpose of the essay was to show that while it was ‘perfectly true that what I called the logic of choice—analysis of individual action—was, like all logic, an a priori subject, Mises’ contention that all the analysis of the market was an a priori thing was wrong, because it depended on empirical knowledge. It depends on the problem of knowledge being conveyed from one person to another.’ Hayek (1983) attributed the Great Depression not to deflation but to trade policy: ‘one thing has been understood, at least by the more responsible people, that nothing [emphasis added] did more to intensify the depression of the 1930s than the return to protectionism.’ Hayek had supreme confidence in his persuasive ability: ‘I have not yet found anybody who, once he was reminded of this fact, would still continue to believe that it might be necessary to reintroduce protection.’ According to the President of the Mises Institute, ‘democracy is a sham that should be opposed by all liberty-loving people’ (Deist 2017). Hayek told James Buchanan that the spontaneous order would have to be reconstructed (Chapter 5, above); and at GMU, Boettke promotes mysticism: ‘The role of the economist is to teach the principles of spontaneous order so that individuals may become informed participants in their own

9  ‘German Villains and Austrian Victims’     413

democratic process’ (cited by Martin 2010, 136). But as Hayek was writing The Road to Serfdom, the Austrian School philosopher and National Review columnist, ‘Ritter von’ Kuehnelt-Leddihn (pseudonym F. S. Campbell), published The Menace of the Herd (1978 [1943]). ‘God and Gold’ Austrian School reconquistadors embrace restored monarchy, or anything but democracy (Hoppe 2001), pope and monarch, supported by a ‘natural aristocracy’ (Rockwell 1994), a ‘small, self-­ perpetuating ­oligarchy of the ablest and most interested’ (Rothbard 1994) or ‘dictatorial democracy’21—‘a system of really limited democracy’ (Hayek 1978a).22 The Habsburg Pretender was full of hope: ‘There is an extraordinary revival of religion in France … I never would have thought one could dare to say in France what Sarkozy is saying—that the separation of church and state in France is wrong’ (Watters 2005; Morgan 2011). Hayek (1983) appeared to have discovered a biological basis for deference to the neo-feudal ‘spontaneous’ order: civilization has formed by man learning to conform to rules of action, the effects of which were far beyond his vision.’ Hayek had just come up with a ‘new formulation’ which he ‘rather’ liked: that the ‘invention or the development of the market amounts to the invention of a new sense organ in effect, similar to the evolution of sight in addition to the sense of touch’— an ‘extra-somatic or external sense organ, which informs us of things of which we are not aware physically.’ By selection I sometimes speak of the natural selection of religions: those religions which preached the right morals survived and enabled the group to multiply. It is not the intelligence of our ancestors that has left us with more efficient morals, but—as I like to express it to shock people—our ancestors were really the guinea pigs who experimented and chose the right ways which have been transmitted to us. It was not necessarily their superior intelligence. Rather, they happened to be right, so their successes multiplied, and they displaced the others who believed in the different morals.

Rosten asked: ‘Do you find that in societies which have a different religious structure, or a different ethos, that it is permissible to run the society without such values? or that power is in and of itself sufficient?’ Hayek (1978a) replied:

414     R. Leeson

Well, that’s a very long story; I almost hesitate to talk about it. After all, we had succeeded [emphasis added], so long as the great mass of the people were all earning their living in the market, either as head of a household or of a small shop and so on. Everybody learned and unquestionably accepted that what had evolved was–the capitalist ethic was much older than capitalism–the ethics of the market. It’s only with the growth of the large organizations and the ever-increasing population that we are no longer brought up on this ethic. At the same time that we no longer learned the traditional ethics of the market, the philosophers were certainly telling them, ‘Oh, you must not accept any ethical laws which are not rationally justifiable.’ These two different effects–no longer learning the traditional ethics, and actually being told by the philosophers that it’s all nonsense and that we ought not to accept any rules which we do not see have a visible purpose–led to the present situation, which is only a 150-year event. The beginning of it was 150 years ago. Before that, there was never any serious revolt against the market society, because every farmer knew he had to sell his grain.23

On the twenty-fifth anniversary return visit to Mont Pélerin, Friedman (1973) praised Hayek’s stress on the ‘importance of the institution of private property and free enterprise for the preservation of human freedom.’ Yet as Harland Shaw (22 March 1962) noted in a circular, the MPS had ‘totally oligarchic rule.’24 By coincidence, on 4 August the British declared a war that would end the rule of both the Second Reich and the Habsburgs (1914); Anne Frank was arrested in Amsterdam and transferred to BergenBelsen (1944); and the bodies of three voting rights activists, Michael Schwerner, Andrew Goldman and James Chaney, were discovered in an earthen dam in Mississippi (1964). All three events undermined—unintentionally—ascribed status. Liberation from Habsburg feudalism (The Dutch War of Independence, 1568–1648) strengthened property rights; in 1649, Charles I was decapitated—which largely ended the Divine Right of Kings in Great Britain; and the American War of Independence (1775–1783) separated Church and State. According to Angus Maddison’s (1982, Chapter 2) Phases of Capitalist Development, the countries with the highest GDP per man hour were the Netherlands

9  ‘German Villains and Austrian Victims’     415

(1700s–1780s), Britain 1780s–1890) and the United States (1890–). The Habsburg Pretender had to perjure himself to end his family’s banishment from Austria (Leeson 2015, Chapter 3); but in 1960, he was ‘elected’ to the MPS.25 He used this position to nominate those who sought to restore Habsburg ‘property’: a united Catholic Europe (Teacher 2018a, b). In his closing address to the 1984 MPS meeting, Hayek (1985) explained that he had ‘encountered’ Hunold in Zurich and said: ‘How nice it would be if I could only raise the money to organize’ what became known as the MPS. The MPS was designed as a ‘closed’ international society of scholars who would ‘elect’ selected applicants—much like the Nobel Prize in Economic Sciences community (1969–). There are numerous open (non-excusive) national and international organizations—where members fund their own passage.26 The benefits of an exclusive and closed membership presumably exceed that of an open one: neoclassical theory suggests that members would pay for such a privilege. But the MPS Archives reveal a trail of unpaid hotel bills.27 According to Hamowy (2003): ‘As is customary, the Mt. Pelerin meetings were held in one of the most expensive hotels in the city as befitted the fact that almost all attendees were either think-tank executives traveling on expense accounts, South American latifundia owners, for whom hundred-dollar bills were small change, or the officers of the Society itself, a self-perpetuating oligarchy who, thanks to its members’ dues, traveled around the world in first-class accommodations.’ Davenport was one of these tax-exempt beneficiaries—becoming the ‘Roe Foundation Senior Fellow’ (with a stipend of $2000) for the duration of the 1982 Berlin MPS meeting.28 ‘Professor Kurt Leube’ was a ‘Senior Distinguished Members’ Roe Fellow for the 1984 MPS meeting; while Fink was an Earhart Fellow.29 And Ernest van den Haag (23 July 1981) wrote to Baron von Kanon at the Heritage Foundation to collect the promised $3000 associated with attending an MPS meeting.30 Of the original MPS office holders: the President (Hayek) was a tax-evading academic fraud; the Secretary (Hunold) was forced-out (along with one of the Council members, Röpke); one of the Vice Presidents (Jewkes) didn’t pay his own dues (the IEA paid them)31; and according to Hunold (1962), Jewkes offered ‘free board and lodging’ and

416     R. Leeson

‘travel expenses’ for those who travel to the next MPS meeting to expel him. Of the other five Council members, one was a card-carrying AustroFascist, member of the official Fascist social club, and a plagiarist (Mises) and another (Robbins, who had drafted the Society’s Statement of Aims) resigned in disgust because of what he regarded as Hayek’s amorality. Of the proposed founding members, one (Henry Simons) committed suicide before the meeting; another (Graham) committed suicide afterwards (at least according to Hayek); and two suffered from suicidal depression (Hayek and Mises). Of the 36 founding members, two (Watts and Read) were regarded by Stigler and Friedman as dishonest ‘bastards’ and seven appear to have been invited for solely fund-raising purposes (Chapter 1, above). Friedman won his Nobel Prize (in part) for his work on the distinction between ‘permanent’ and ‘transitory’ income; and Stigler was rewarded for his insights about regulatory capture. The Smithian compromise was to restrain the ‘conspiracy against the public’ and the ‘contrivance to raise prices’ through competition; Martin Shkreli is what pre-Thatcher Conservatives regarded as the ‘unacceptable face of capitalism.’ Citizens United seeks to restore our government to citizens’ control. Through a combination of education, advocacy, and grass roots organization, Citizens United seeks to reassert the traditional American values of limited government, freedom of enterprise, strong families, and national sovereignty and security. Citizens United’s goal is to restore the founding fathers’ vision of a free nation, guided by the honesty, common sense, and good will of its citizens.32

The 2010 US Supreme Court 5-4 decision (Citizens United v. Federal Election Commission) prevented any restrictions on campaign spending. The Koch-funded Citizens United had been founded in 1988 after the Senate had refused to confirm Robert Bork for the Supreme Court. As its founder, Floyd Brown, told The New York Times (6 September 1991), ‘What people don’t understand is how bitter conservatives are about Bork.’

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At the 2016 MPS meeting, NYU’s Jonathan Haidt spoke on ‘How Universities Became Cathedrals of Social Justice, and How to Convert Them Back into Marketplaces of Ideas.’33 The MPS increased its members’ tax-exempt ‘permanent income’; how did those ‘captured’ by MPS funding respond to the new incentive structure? Between 1974 and Quantitative Easing (QE)—deemed necessary by the Federal Reserve to prevent the Global Financial Crisis (2008–) from descending into another Great Depression—public policy experienced deregulatory capture. The 1947 MPS meeting marked the beginning of Friedman’s ‘active involvement in the political process.’ Describing himself as a ‘young, naïve, provincial American,’ he took six weeks off from the University of Chicago for what Stigler described as a ‘junket’ to ‘save liberalism.’ In Two Lucky People, Friedman described how (shortly before Hayek was born), his parents left the Austro-Hungarian Empire for the trans-Atlantic trip to Ellis Island: ‘immigrants were strictly on their own except for the assistance they could get from relatives and private charitable agencies’—his mother worked as a ‘seamstress’ in a ‘sweatshop.’ Among his most ‘vivid memories’ of his childhood were ‘heated’ conversations between his parents ‘at night about where the money was going to come from to pay the incoming bills.’ ‘Postponement’ was their standard tactic—post-dated cheques. In his study of monetary arrangements, Friedman later observed that post-dated cheques were common in other countries as well (Friedman and Friedman 1998, 19, 20, 21, 159). ‘Steerage-to-Peerage’ is a cliché that defines one channel of achieved status. Half-a-century after his parents escaped from Habsburg neo-­ feudalism, Friedman—travelling in reverse across the Atlantic on Cunard’s Queen Elisabeth—had heated conversations ‘every night’ with Hazlitt (2004), ‘always about the same subject—Milton’s strict quantity theory of money … I cannot remember why this argument was so persistent, which one of us most often initiated it, or which of us was more disputatious. What I do remember is that neither of us ever convinced the other of anything. We always ended precisely where we began.’ The others at the dining table—Knight, Stigler, and Watts—‘took very little part in it and seemed to be bored by it.’

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This ‘expenses-paid’ trip was ‘George’s and my first trip abroad’— they stayed at the ‘plush’ Dorchester and Grand Hotels (Friedman and Friedman 1998, 19, 20, 159)—a prelude to the Belle Époque Hôtel du Parc, perched atop Mont-Pèlerin, overlooking the ‘glinting’ shores of Lake Geneva, which had been built in 1906, eight years before the ‘Great’ War between the dynasties. In ‘Why Capitalism’s Gurus are still Smiling,’ Friedman told The Sunday Telegraph that was a ‘practically zero’ chance of a ‘world banking collapse.’ He thought that a Reagan and Thatcher failure would be followed by either a ‘limping Welfare State’ or collectivism (which appeared to resemble the Habsburg ‘spontaneous’ order that his parents had escaped from): a ‘handful of people having a great deal and all the rest very little indeed.’ When asked: ‘Commissars instead of dukes?’ Friedman replied: ‘Not quite. Commissars have never heard of noblesse oblige ’ (Turner 1985). A few weeks before the announcement of Hayek’s Nobel Prize, Davenport (1974) told an ISI conference that the ‘big and decisive turn’ came for him atop Mont Pélerin where they discussed how the ‘Socialist tide then sweeping Europe and in a way lapping at the shores of America, might be turned back and how sounder economic ideas could be made to prevail.’ Describing himself as a ‘practical business journalist,’ he discovered that the ‘dismal science’ consisted of more than supply and demand curves: it was the Misean choice between the ‘free market’ or Communist Russia where freedom, all freedom including religious freedom, must die. And so I became like Milton Friedman and others a devout free marketer, if not quite as devout as Ayn Rand (if I may apply that adjective to that iconoclast lady), at least almost as devout [Davenport’s emphases].

Climbing aboard a ‘little funicular railway,’ Davenport (1981) became ‘vaguely conscious that something new and exciting lay at the top’ of Mont Pélerin. The upper-middle-class Keynes had told him that as a ‘Great’ War Treasury official he ‘first met le grand monde ’ (the great world) at weekend retreats at ‘those English country houses where national policies

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were thrashed out and made.’ Davenport (1981) saw an analogy with the Mont Pélerin ‘grand monde’ or ‘haute monde’ which also gathered in a ‘country house’: Hayek’s unique gathering was the gingerbread Hotel Parc … I can still remember the clean sweet smell of the little room to which I was assigned which, as in case of most Swiss hostelries, gave the impression that it had been scrubbed down by an industrious chambermaid just before the guest’s arrival. It was to be my home for some ten days and nights which linger in memory much as I recall my first days in college.

For Friedman and Stigler, this was ‘Our reaction to a T’ (Friedman and Friedman 1998, 160); the first MPS meeting had been a ‘wonderful success.’34 Friedman (4 September 1992) devoted two thirds of his twopage eulogy to one of his ‘closest friends’ to the life-changing experience of the first MPS meeting: ‘Neither George nor I ever recovered from our introduction to so rich and varied a world.’35 Even those who hadn’t attended in 1947 experienced a vicarious epiphany. For the fiftieth anniversary, the MPS invited a select few to a ‘special gathering.’ Joan Culverwell (21 April 1997) told Feulner that it had taken her a week to ‘come down’ out of the Mont Pelerin ‘clouds.’36 One MPS President (26 March 1997) asked Bill Campbell for assistance with the opening of a speech: Speaking of the 1947 gathering and the subsequent fame of members of the Mont Pelerin Society ‘there has never been such a distinguished gathering of defenders of freedom and liberty since Bright and Cobden dined together at the Reform Club in 1829 or??? (Adam Smith dined alone in Kircaudwy [sic]) or???’37

In 1947, Hayek had been unable to name his society after two Catholics, so a compromise was reached: it ‘seemed best to name the organization for the little hill which gave it birth, a happy choice since Pelerin is French for Pilgrim.’ The pilgrims descended ‘refreshed in mind and spirit, but with all the world before them.’ And as Reagan looked set to become President, the Pilgrims’ ideas

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seem to be gaining ground and effecting an historic ‘Turn of the Tide.’ (Davenport 1981)

The Hayeks had been recruited into the ‘von’ section of the Habsburg nobility in 1789—but rule-by-nobility-and-Kaiser had been weakened by advancing democracy; and property rights became increasingly threatened. On 16 December 1773, for example, the property of the East India Company was destroyed in Boston Harbor. • Hayek (1978a) objected to ‘extreme American anti-colonialism: the way in which the Dutch, for instance, were forced overnight to abandon Indonesia, which certainly hasn’t done good to anybody in that form. This, I gather, was entirely due to American pressure, with America being completely unaware that the opposition to colonialism by Americans is rather a peculiar phenomenon.’38 The author of Law, Legislation and Liberty (Hayek 2013 [1973–1979]) told Cubitt (2006, 15) that of the two Empires he had watched decline, ‘England’s downfall had been the more painful to him.’ • George III (31 October 1776) wanted his property—his ‘loyal Colonies’—back: ‘My Desire is to restore to them the Blessings of Law and Liberty, equally enjoyed by every British Subject, which they have fatally and desperately exchanged for all the Calamities of War, and the arbitrary Tyranny of their Chiefs … If their Treason be suffered to take Root, much Mischief must grow from it, to the Safety of My loyal Colonies, to the Commerce of My Kingdoms, and indeed to the present System of all Europe.’39 • Hayek (1978a) also worried about commerce: ‘I did see that our present political order made it almost inevitable that governments were driven into senseless policies. Already the analysis of The Road to Serfdom showed me that, in a sense, Schumpeter was right–that while socialism could never do what it promised, it was inevitable that it should come, because the existing political institutions drove us into it. This didn’t really explain it, but once you realize that a government which has power to discriminate in order to satisfy particular interests, if it’s democratically organized, is forced to do this without limit—Because it’s not really government but the opinion in a

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democracy that builds up a democracy by satisfying a sufficient number of special interests to offer majority support. This gave me a key to the reason why, even if people understood economics correctly, in the present system of government it would be led into a very stupid economics policy.’40 ‘You can tell the people that our present constitutional order forces politicians to do things which are very stupid and which they know are very stupid.’41 • Hayek (1978a) denigrated the post-Habsburg order as a ‘republic of peasants and workers.’42 ‘Even a dictator can say no, but this kind of government cannot say no to any splinter group which it needs to be a majority.’43 ‘I’m frankly trying to destroy the superstitious belief in our particular conception of democracy which we have now, which is certainly ultimately ideologically determined, but which has created without our knowing it an omnipotent government with really completely unlimited powers, and to recover the old tradition, which was only defeated by the modern superstitious democracy, that government needs limitations. For 200 years the building of constitutions aimed at limiting government. Now suddenly we have arrived at the idea where government, because it is supposedly democratic, needs no other limitations. What I want to make clear is that we must reimpose limitations on governmental power.’44 • James Buchanan (1978) referred to the ‘delusion of democracy.’45 Mises (2009a [1978 (1940)], 55) described the ‘evil’ of democracy: ‘It has been said that the problem lay within the realms of public education and public information. But we are badly deceived if we believe that the right opinions will claim victory through the circulation of books and journals and with more schools and lectures; such means can also attract followers of faulty doctrines. Evil consists precisely in the fact that the masses are not intellectually enabled to choose the means leading to their desired objectives. That ready judgments can be foisted onto the people through the power of suggestion demonstrates that the people are not capable of making independent decisions. Herein lies the great danger [emphases added].’ And according to Hayek (1978a), ‘if the politicians do not destroy civilization in the next twenty years, there’s good hope; but I am by no means certain that they shan’t succeed in destroying it before

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then.’46 ‘Schumpeter is right in the sense that while socialism can never satisfy what people expect, our present political structure inevitably drives us into socialism, even if people do not want it in the majority. That can only be prevented by altering the structure of our so-called democratic system. But that’s necessarily a very slow process, and I don’t think that an effort toward reform will come in time. So I rather fear that we shall have a return to some sort of dictatorial democracy, I would say, where democracy merely serves to authorize the actions of a dictator. And if the system is going to break down, it will be a very long period before real democracy can reemerge.’47 • George III (31 October 1776) ‘anticipated’ Buchanan, Mises and Hayek: ‘Nothing could have afforded Me so much Satisfaction as to have been able to inform you, at the Opening of this Session, that the Troubles, which have so long distracted My Colonies in North America, were at an End; and that My unhappy People, recovered from their Delusion, had delivered themselves from the Oppression of their Leaders, and returned to their Duty. But so daring and desperate is the Spirit of those Leaders, whose Object has always been Dominion and Power, that they have now openly renounced all Allegiance to the Crown, and all political Connection with this Country.’48 Article 1, Section 9 of the United States Constitution prohibited Congress from addressing slavery before 1808.49 In 1806, Thomas Jefferson proposed that the ‘free’ international slave trade be criminalizing—asking Congress to ‘withdraw the citizens of the United States from all further participation in those violations of human rights … which the morality, the reputation, and the best of our country have long been eager to proscribe.’50 In 1848, serfdom in Austria was abolished; and in 1865, nearly 4 million slaves were ‘expropriated’ from southern property-owners. According to Thomas Piketty and Gabriel Zucman (2015, 1313), the aggregate market value of slaves was between 1 and 1.5 years of US national income; between $3.1 and $3.6 billion, according to other estimates.51 Hayek’s (1933) Inaugural Professorial Lecture on ‘The Trend of Economic Thinking’ coincided with the Reichstag Fire and the re-­ imposition of autocracy. Hayek- and Mises-promoted deflation had

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facilitated Hitler’s rise to power and led to World War II. But far from having revived neo-feudalism, on VE Day (Hayek’s 46th birthday), the British Labour Party was about to win the general election (5 July 1945) and the Democratic Party continued to occupy the White House. Hayek (1994, 126) turned to the ‘spontaneous’ order to reconstruct a version of neo-feudalism: becoming Professor of Moral and Social Science at the University of Chicago ‘offered me almost ideal opportunities for the pursuit of new interests I was gradually developing … I had, as a matter of fact, become somewhat stale as an economist and felt much out of sympathy with the direction in which economics was developing … I found it difficult to return to systematic teaching of economic theory and felt it rather as a release that I was not forced to do so by teaching duties.’ The Preface of Hayek’s (1960) Constitution of Liberty was dated on his 60th birthday; 19 years later, Hayek later sent Mrs. Thatcher a telegram thanking her for the ‘best’ 80th birthday present anyone could have given him52; and on his 86th birthday, The Times published a celebratory article by Mises’ step-daughter entitled ‘The Sage of the Free Thinking World’ (Sereny 1985). According to Karen Vaughn (1994, 120), ‘increasingly visible at Austrian gatherings, serving as an eminent presence, was the intriguing figure of Friedrich Hayek, a man presumed to have lost interest in economics but whose post-revival noneconomics publications nevertheless had an important impact on how the Austrian paradigm came to be conceptualized.’ Hayek was contemptuous of journalists—including those he had recruited (Chapter 1, above). When Koether (2000, 3) attended as a guest the 1959 MPS meeting, Hayek from the podium referred to teachers, preachers, and journalists as ‘dealers in secondhand ideas.’ I found the comment to be a bit condescending, if not insulting, to journalists—even though for the most part I had to agree.

Koether described himself as a ‘journalist’—but in 1959, he joined the MPS c/o ‘United States Steel Corporation.’53 According to a former Wall Street Journal op-ed columnist and climate change sceptic: ‘respectability’ is defined by ‘op-eds published

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in The Wall Street Journal’ and ‘keynotes delivered to the American Enterprise Institute … scrutiny from experts’ (Stephens 2017). In Neoconservatism: The Autobiography of an Idea, Irving Kristol (1995, 35, 96, 190)—referring to ‘Ludwig von Mises’ as ‘one of our most distinguished economists and ‘Professor Hayek’ as an opponent of ‘scientism’— described what passed for ‘scrutiny from experts’ during a 1976–1977 sabbatical at the AEI: A fair number of people came to the AEI, as a kind of temporary haven. The economists among them were useful for my purposes, since they could help me understand the economic literature, old and new, that I was assiduously studying. But the men I formed the closest ties with were three newly unemployed lawyers—Robert Bork, Antonin Scalia and Lawrence Silberman.

At the AEI, ‘Our main topics were religion (my permanent favorite) and economics, about which none of us knew as much as we would have liked. But it was clear to all of us that the Republican party would have to become more than the party of balanced budgets if it was to be invigorated.’ The Wall Street Journal editorial page writer, Jude Wanninski—the ‘apostle of a new conservative economics’—was also on sabbatical at the AEI, writing The Way The World Works (1978): Jude had tried very hard to indoctrinate me in the virtues of this new economics: I was not certain of its economics merits but quickly saw its political possibilities. To refocus Republican conservative thought on the economics of growth rather than simply on the economics of stability seemed to me to be very promising. Republic economics was then in truth a dismal science, explaining to the populace, parent-like, why the good things in life that they wanted were too expensive.

In 1978, Wanninski was dismissed from the Wall Street Journal for an ethics violation. But in 1976–1977, Wanninski introduced Kristol (1995, 35) to Jack Kemp, a ‘young congressman and a recent convert. It was Jack Kemp who, almost single-handedly, converted Ronald Reagan to supply-side economics. Ideas do have consequences, but in mysterious ways.’

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In The Public Interest ’s thirtieth anniversary issue, Kristol was explicit about his own ‘cavalier attitude towards the budget deficit and other monetary or financial problems’: ‘political effectiveness was the priority, not the accounting deficiencies of government’ (cited by Starr 1995). At the AEI, Kristol (1995, 34) was looking for rhetoric that would ‘strike a popular nerve with the electorate.’ In America, Hayek’s (1944) Road to Serfdom struck a popular nerve by resonating with pre-existing ‘slippery slope’ anxiety. The domino theory (like the search for non-existent weapons of mass destruction) both struck a popular American nerve and destroyed Cambodian society. On 17 April 1975, Pol Pot took power and began the Orwellian process of establishing ‘re-education’ camps. The Chicago Daily News (18 April 1975) reported that ‘Von’ Hayek had told a one-day conference on the international economy that ‘re-education of the public’ was required so that they understood that ‘we have to suffer from unemployment’ to gain a healthy economy.

Deflation (or at least the avoidance of reflation) was also required: He said the current recession need not turn into a deeper slide as long as ‘we avoid the stupid measures of the 1930s.’ But if government is foolish by keeping prices up, it could ‘turn an acute recession into a long-­standing recession’ … ‘We need to find alternative form of democracy.’

A few days earlier, Hayek (1975b [9 April]) had confronted his own past before a sympathetic AEI audience. Haberler (1975, 2) introduced him with a statement that Hayek presumably knew was fraud: in February 1929, he had ‘boldly predicted the imminence of a crisis and a business cycle downturn in the United States.’ Referring to a ‘secondary deflation, which may go on for a very long time,’ Hayek (1975b, 5) nuanced history and promoted a functional approach to economic theory: I am the last to deny - or rather, I am today the last to deny - that, in these circumstances, monetary counteractions, deliberate attempts to

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maintain the money stream, are appropriate. I probably ought to add a word of explanation.

Hayek then had to Hayek ‘admit’ that he had taken a different ‘attitude’ at the beginning of the Great Depression when he ‘believed’ that a process of deflation of ‘some short’ duration might ‘break the rigidity of wages’ which he thought was ‘incompatible with a functioning [emphasis added] economy.’ Hayek (1995 [1929], 68)—while praising Cannan’s ‘fanatical conceptual clarity’ and his ‘kinship’ with Mises’ ‘crusade’—noted that he and the British-Austrians had failed to realize the necessary next step: ‘Cannan by no means develops economic liberalism to its ultimate [emphases added] consequences with the same ruthless consistency as Mises.’ According to Caldwell (1995, 70, n. 67), this was an apparent reference to Liberalism in the Classical Tradition, in which Mises (1985 [1927], 19, 51) stated: The program of [Austrian] liberalism, therefore, if condensed into a single word, would have to read: property [Mises’ emphasis] … All the other demands of liberalism result from this fundamental demand … The victory of Fascism in a number of countries is only an episode in the long series of struggles over the problem of property.

Almost half a century later, Hayek (1975a) reflected about deflation creating a ‘functioning economy’: ‘Perhaps I should even then have understood that this possibility no longer existed. I think it disappeared in 1931 when the British government abandoned its attempt to bring wages down by deflation, just when it seemed about to succeed. After that attempt had been abandoned, there was no hope that it would ever again be possible to break the rigidity of wages in that way. (When Sterling was devalued in September 1931, Mises predicted: ‘In one week England will be in hyperinflation.’ But no hyperinflation resulted (Chapter 3, above). At the time, British unemployment was 21.7%.54) Non-Austrian economic theory is a constrained discovery process—it organizes and categorizes and allows implications to emerge. In contrast, Hayek (1999a [1977], 132) described the purpose of Austrian ‘theory’:

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‘I have often had occasion to explain, but may never have stated in writing that I strongly believe that the chief task of the economic theorist or political philosopher should be to operate on public opinion to make politically possible what today may be political impossible.’ In interwar Austria and Germany, what ‘von’ Hayek (1978a) denigrated as republics of ‘peasants and workers’ were fatally weakened by deflation and the resulting mass unemployment.55 Hayek (1978a) described his ‘principle’: ‘I never ask what is politically possible, but always aim at so influencing opinion as to make politically possible what today is not politically possible.’56 At the AEI, Hayek (1975b, 13) was prompted to reflect about whether he had changed his ‘opinion’ about combatting secondary deflation. He did not have to ‘change’ his ‘theoretical’ views because he had ‘always’ thought that deflation had ‘no economic function.’ But he ‘did once believe, and no longer do’ that deflation was ‘desirable’ because it could ‘break the growing rigidity of wage rates.’ In the 1930s, he regarded this view as a ‘political consideration’ and did not think that deflation improved the ‘adjustment mechanism of the market.’ But Hayek neglected to mention that the flexibility or rigidity of wage rates are part of the adjustment mechanism. Hayek (1978b, 211) complained about being misrepresented—of sometimes being ‘accused’ of having represented the deflationary cause in business cycles as ‘part of the curative process.’ Somewhat ambiguously, his confession consisted of: ‘I do not think that was ever what I argued.’ Referring to the Austrian response to the Great Depression and the unemployment that Hitler manipulated for his political revolution, Hayek distracted attention away from the 1930s by lumping-in the 1970s: ‘What I did believe at one time was that deflation might be necessary to break the developing downward rigidity of all particular wages which has of course become one of the main causes of inflation.’ Yet according to Hayek (1975b, 7), breaking the rigidity of wages was a central component of the Austrian ‘curative’ process: the ‘primary cause of the appearance of extensive unemployment is a deviation of the actual structure of prices and wages from its equilibrium structure, which brings about maladjustments and structural unemployment.’ Here, Hayek conflates two issues. First, deflation—initially and indiscriminately—increases all non-in-kind real wages and thus creates

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extensive unemployment; and second, he promotes a cost-push explanation of inflation as ‘von’ Mises had done a generation before and which is inconsistent with Austrian ‘theory’ (Leeson 2018). The rules of scholarly engagement differ from the ‘principles’ of political operators. In 1982, when Reagan’s Vice President, George H.W. Bush, was asked about his description of Reaganomics as ‘voodoo economics,’ he replied: ‘Well what I said back then it’s very hard to find—well actually let me start over, one, I didn’t say it. Nobody, every network’s looked for it and none can find it, it was never said, and I challenge anybody to find it.’ NBC then rebroadcast candidate Bush’s 1980 remarks when campaigning against Reagan: ‘So what I’m saying is that it’s, it just isn’t gonna work and its very interesting that the man who invested this type of what I call a voodoo economic policy.’57 Haberler (1975, 12) asked Hayek: ‘But going back to the 1930s when prices were falling rapidly, would you say now that at that time much could have been done to stop the spiral?’ Hayek (1975b, 12) replied: ‘You see, even at that time, I did say so.’ Hayek then recounted a story in which did not reveal that he ‘did say so’ but, instead, illustrated that he didn’t want his name attached to attempts to stop reflation just in case the unemployment he was proposing to create would lead to ‘political revolution.’ In ‘1929, or perhaps 1930,’ a German ‘political’ commission—the ‘Braun [sic ]’ Committee—proposed to ‘combat’ the Great Depression by ‘reflation.’ The main author of the report was Wilhelm Röpke, Hayek’s ‘friend’ and MPS President (1961–1962). Hayek thought that in the ‘circumstance’ reflation was ‘wrong,’ and wrote an article ‘against it.’ Hayek didn’t publish the article, but sent it instead to Röpke with a covering letter which stated: Apart from political considerations, I think you should not – not yet at least – start expanding credit. But if the political situation is so serious that continuing unemployment would lead to a political revolution, please, do not publish my article. That is a political consideration, however, which I cannot judge [emphases added] from outside Germany, but which you will be able to judge.

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Hayek (1975b, 12) added that Röpke’s reaction was not to publish the article, because he was convinced that at the onset of the Great Depression the ‘political danger of increasing unemployment’ was so great that he would ‘risk the danger of causing further misdirections by more inflation’ in the hope of ‘postposing [emphasis added] the crisis.’ As the international economy spiralled downwards, it ‘seemed’ to Röpke that reflation was ‘politically necessary.’ Three years later, Hayek (1978b, 211) repeated the sentence about ‘Röpke’s reaction,’ adding: and that he ‘consequently withdrew’ his article. Hayek also changed the letter sent to Röpke: replacing ‘I think you should not’ with ‘I feel you ought not’; and ‘I cannot judge’ with the ‘merits of which I cannot judge.’ Hayek (1978b, 211) also changed the date: ‘I believe, 1930.’ The Austrian bank Credit-Anstalt collapsed on 11 May 1931—which precipitated the European crisis; and the Brauns-Kommission (and not ‘Braun’) was appointed in the spring of 1931, and it was probably in that period that Hayek sent his article. (Magliulo 2016, 42; 2018)

In the 1928 election, the German Social Democratic Party (SPD) secured 29.8% of the vote (up from 26% in 1924); the only other party that gained seats was the Communist Party, which received 10.6% of the vote. The Nazis won just 2.6% of the vote. Before the Wall Street crash, Germany unemployment was 8.6% (June 1929); it then rose to 19.8% (May 1930) and 22.2% (September 1931). In October 1927, 4.6% of labour union members worked part time; but by September 1931, this had risen to 22.2%. Measured unemployment was just below 4 million in summer 1931; but Fritz Kummer (1932, 13) estimated that if part-time workers were converted into an equivalent number of wholly-unemployed and added to the officially figures, there were 6 million unemployed. In the September 1930 German elections, the SDP lost 10 seats, the Nazis dramatically increased its number of seats from 12 to 107 and the Communists gained an additional 23 seats. The Preface to the second

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German edition of Mises’ (1932) Sozialismus was dated January 1932; and in the July 1932 elections, the Nazis became the largest party in the Reichstag. According to Rothbard (2012 [1979]), ‘the state is the only institution which can use the revenue from this organized theft to presume to control and regulate people’s lives and property. Hence, the institution of the state establishes a socially legitimatized and sanctified channel for bad people to do bad things, to commit regularized theft and to wield dictatorial power.’ Inflation is a tax on money balances—while Austrianpromoted deflation produces unemployment which undermines both the revenues and the expenditures of labour unions: dues fall and benefits paid out increases—which is what happened to German labour unions after the Wall Street crash (Kummer 1932, 14–15). For Austrian School economists, they pose an additional threat: ‘German trade-unions have always paid great attention to the education of their members, and spend much money for this purpose … officers receive instruction on labor legislation, social politics, political economy, etc., and also on their duties in the organization. Some large unions also have their own schools for their particular purposes. In addition, many members are sent by their organizations to colleges, public schools, and similar institutions, sometimes with a special grant of public funds. But these opportunities for education are designed more especially for the officers’ (Kummer 1932, 15). In autumn 1930, German employers ‘started an extensive attack on the rates of wages that had been established by agreement.’ The 1931 Congress of German Federation of Labor adopted a resolution: ‘The congress repudiates decidedly the attempt made to take advantage of the crisis to outlaw the workers. The trade-unions stand up as always for the maintenance and development of social legislation. They consider State insurance against unemployment, sickness, accident, old age, and disability, to-day as heretofore, a decisive factor in the working conditions.’ This Congress ‘emphasizes the urgent necessity to reduce unemployment by a systematic reduction of the hours of labor. This measure is possible, and imperative for social and political reasons … Common welfare demands the maintenance of all public institutions and their further development on account of the increasing distress of the

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population. The main object of all public economic institutions cannot be the desire for profits, but the desire to serve the community’ (cited by Kummer 1932, 16–17). In an address to the MPS, Mises (2009b [1958], 31) hinted that the funding source for his preservation of his ascribed status had almost genetic foundations: ‘It is true that a man of average intellectual abilities has no chance to rise to the rank of a captain of industry. But the sovereignty that the market assigns to him in economic affairs stimulates technologists and promoters to convert to his use all the achievements of scientific research. Only people whose intellectual horizon does not extend beyond the internal organization of the factory and who do not realize what makes the businessmen run, fail to notice this fact.’ And according to Mises (1998 [1949], 270, 310), ‘The direction of all economic affairs is in the market society a task of the entrepreneurs. Theirs is the control of production. They are at the helm and steer the ship. A superficial observer would believe that they are supreme. But they are not. They are bound to obey unconditionally the captain’s orders. The captain is the consumer.’ The 1931 Congress German Federation of Labor took a different position: ‘At a time when the workers suffer the most under the transgression of irresponsible captains of industry, they demand a warranty for a stronger influence of the trade-unions in all social and economic institutions’ (cited by Kummer 1932, 17). The Wall Street Journal published a hagiographic op-ed piece on Mises: ‘The Man Who Predicted the Depression’ (Spitznagel 2009). Mises (2009a [1978 (1940), 68)—a business sector lobbyist and quasi-public official—‘already knew of the approaching banking crisis’ but did nothing about it.58 He told his fiancé that he had been offered an important position at Credit Anstalt but—for reasons of self-interest— that he had decided not to accept it because a great ‘crash’ was coming and he did not want his ‘name in any way connected with it’ (Mises 1984, 31). Margit Mises (1984, 31) noted the consequences of Credit Anstalt’s collapse: financial crisis and a ‘panic’ in all Central Europe—after which there was hardly a quiet day in Vienna. Hitler had used the ‘fear, the despair, and the insecurity in Germany to follow his own devilish

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purposes, and he succeeded so well in his evil designs.’ In March, 1933, the Austrian Chancellor Dolfuss prohibited marches and assemblies and restricted the freedom of the press. The Austrian Nazis then staged a ‘great’ riot in Vienna—which now looked like a ‘fortress; the streets were full of soldiers; shops and schools were closed; no one dared to go out.’ The entrance doors of all buildings had to be closed by 8 P.M.: after that hour no ‘citizen’ was allowed in the streets: there was Standrecht in Vienna: the police had the power to shoot anyone who did not obey ‘orders.’ Ten weeks before Credit Anstalt’s collapse, Mises (2006 [28 February 1931], 158, 166–167) told the Association of German Industry that the other trade union—‘labor unions’—were aiming for ‘pseudo-economic democracy … If this system were carried out, it would disorganize the entire production apparatus and thus destroy our [emphasis added] civilization.’ Mises offered a solution: ‘If the government were to proceed against those who molest persons willing to work and those who destroy machines and industrial equipment in enterprises that want to hire strikebreakers, as it normally does against the other perpetrators of violence, the situation would be very different. However, the characteristic feature of modern governments is that they have capitulated to the labor unions.’ Hitler became Chancellor on 30 January 1933; and the Reichstag burnt down on 27 February 1933. Hitler proceeded to abolished all non-Nazi political parties and all labour unions—union leaders were taken into ‘protective custody’ and workers were obliged to join the National Socialist Union. Hitler received a 0.03% levy on wages and salaries of employees of the German Trade Association (Davidson 1966, 192–193, 204, 230; Shirer 1960, 252–253; Bullock 1991, 133). Austrian-promoted deflation had been ‘one of the strongest agents working towards the Republic’s downfall’ (Stolper 1967, 116–119). In Buckley’s National Review (8 December 1989), Nixon was cited as stating: ‘Well if they want to put me in jail let them. At least that will give me time to do some thinking. All the best work was done in jail. Take Gandhi.’ In the same issue, Bork (1989) declared an emergency: ‘How Political Judges Have Perverted the Constitution.’ Hayek (1978a) told Bork: ‘I try to operate on political movements.

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You know, my general attitude to all of this has always been that I’m not concerned with what is now politically impossible, but I try to operate on opinion to make things politically possible which are not now.’59 The MPS sought to attract ‘younger men’ (‘List C’)60; in 1965, Bork had received $500 to attend the MPS meeting and was nominated for membership by Shenfield.61 In 1970, he was ‘elected’ to the MPS—along with Charles Koch, Richard Ware (Earhart Foundation), William Landes (a member of AEI’s Council of Economic Advisers), Colin Welsh (The Daily Telegraph ), William Fellner (Nixon and Ford’s CEA, 1973–1975) plus Habsburg’s associate in Académie Européenne des Sciences Politiques and co-founder of the Cercle Pinay, Jean Violet (Teacher 2018a, b).62 The Earhart Foundation had been endowed from the wealth of Harry Boyd Earhart’s White Star Oil Company (later bought by Mobil); Hayek was one of many funded ‘Earhart Professors.’ In 1972, Bork (2013, 18–19, 21, 25), a ‘redbearded professor from Yale,’ saw Nixon ‘visibly recoil a step or two’ when they met. Nixon sought legislation to limit the de-segregation-inspired busing of children to school—Bork told Nixon that the Supreme Court authority upon which it was premised was ‘corrupt constitutional law.’ Nixon replied: ‘I believe the same thing, but I didn’t know there was a law professor anywhere in the United States who agreed with me.’ To reassure his new recruit, Nixon told Bork that his ‘conservatism was something of a pose to keep others moving too far left.’ Bork ‘managed not to say that he would be happier if he were more conservative than he sounded.’ In 1973, attempts were made to reconstruct the ‘spontaneous’ order in both Chile (11 September) and the United States (20 October). Bork took an expost reward from Nixon to sack Special Prosecutor Archibald Cox after Attorney General Elliot L. Richardson and Deputy Attorney General William D. Ruckelshaus (2017) had refused. Nixon then abolished the office of the Special Prosecutor and turned-over all Watergate investigations to his Justice Department. In return for undertaking the Saturday Night Massacre, Nixon told Bork: ‘You’re next when a vacancy occurs on the Supreme Court.’ According to Rockwell (1998)

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Bork, for years a tough-edged critic of antitrust enforcement, recently signed up as a consultant with Netscape, the corporation that stands to benefit the most from an antitrust breakup of Microsoft. He’s doing very well. He could probably rack up a hundred billable hours, at $400 each, just on the responses he’s written to Mises Institute editorials in the last month. No doubt his total take will be somewhat higher than if he had been just another pro-antitrust economist. But it illustrates a point: the personal advantages of compromise far outweigh those that come from sticking to principle. If your conscience can bear it, it’s a good career move.

Between 1974 and 1997, General Pinochet received $12.3 million from governments (and possibly nongovernmental sources) in the US, China, Britain, Spain and Paraguay for ‘commissions from service and travel abroad’ (O’Brien and Rohter 2004). Hayek (1978a) described the Austrian religion: I am in a curious conflict because I have very strong positive feelings on the need of an ‘un-understood’ moral tradition, but all the factual assertions of religion, which are crude because they all believe in ghosts of some kind, have become completely unintelligible to me. I can never sympathize with it, still less explain it.63

In the Caldwell-edited Collected Works volume on Studies on the Abuse and Decline of Reason, Hayek (2010 [1952], 91) insisted that ‘the facts of the social sciences are merely opinions [emphases added], views held by the people whose actions we study. They differ from the facts of the physical sciences in being beliefs or opinions held by particular people, beliefs which as such are our data, irrespective of whether they are true or false, and which, moreover, we cannot directly observe in the minds of the people but which we can recognise from what they do and say merely because we have ourselves a mind similar to theirs.’ But at the AEI, Hayek (1975b, 6) explained about the ‘true and correct’ ‘explanation of extensive unemployment’ which has the ‘unfortunate property of not being verifiable by statistical methods.’ Dudley Dillard (1975, 14), the author of The Economics of John Maynard Keynes (1948), asked about ‘scientific method, about the theory that a theory

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can be true although its truth can’t be tested statistically. I am familiar with your economic work, but not with your methodological and philosophical work. But my question is, why should anyone accept such a theory as true? Perhaps you could explain how you would demonstrate, by other than statistical methods, why such a theory is true.’ Hayek (1975b, 14) replied: ‘I think the answer is fairly simple. If we take as premises some undisputed facts, which everybody accepts as facts of daily observation, we can logically deduce from them certain consequences, which permit only one answer to the problem. In other words, if we deduce certain consequences from admitted facts, by logically correct argument, the truth of our deductions has to be accepted [emphases added].’ Two months later, at the Koch-funded Hartford revivalist conference, when asked by Ebeling (1975) ‘do you feel that this Austrian revival is a sound one?’ Hayek replied: ‘Yes, it’s certainly sound; it’s very promising—maybe very important. You ask me why—I mean—you never know why the truth is ultimately recognized, but to me it seems that’s what happened.’ ‘Free’ market logic is: • from a Hayek (1978a) ‘undisputed fact’: ‘if you go to a French provincial town, you’ll find the place full of bookstores; then you come to a big American city and can’t find a single bookstore’64; • a deductive truth emerges: ‘That suggests a very fundamental contrast.’ Americans with their ‘low’ educational level relative to the ‘European peasant’ were vulnerable to exploitation by the media that Hayek sought to recruit.65 Hayek (1978a) was especially contemptuous of the Americans who funded him: ‘intellectuals in England received’ The Road to Serfdom (1944) in ‘the spirit in which it was written; while here I had, on the one hand, unmeasured praise from people who probably never read it.’66 • There is another Hayek (1977, 15) undisputed fact—there are ‘no real liberals’ in America: ‘In Europe you use the term liberal when you wish to speak about libertarianism. In America you have to describe what in Europe is liberal by the term conservative. What irritates me so much is that these conservatives allowed the American

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socialists and half-socialists to usurp the term liberal and are now using it themselves as a term of condemnation, and that seems to me almost irreversible. When I speak about American liberals I prefer to call them pseudoliberals. There are no liberals in my sense.’ • These non-existent American liberals were involved in tactical manoeuvers: the ‘trouble’ was ‘the fact that conservatives in America include both what in Europe are called liberal and what in Europe are called conservatives. They are in one group but they really differ a great deal in their fundamental philosophy. Conservatives in the American sense should not sponsor a program of keeping things as they are, but rather a program of throwing possibilities open to everyone. But, conservatives in the old sense don’t like the latter program. The liberals, in my sense, have to work with these conservatives and were thereby driven into a position in which a liberal point of view couldn’t really be defended’ (Hayek 1977, 15). According to Hayek (1975a), facts were person-specific: ‘The English people are beginning to experience, which they hardly have yet, but they have become very much poorer and are rapidly getting poorer still. And that will lead to the resolution or the recognition that the policy of the past was wrong. The amazing fact [emphasis added] is that the great majority of British people are not yet consciously aware that they are living in a very severe economic crisis. For that reason, they are not willing to consider seriously a complete change in policy.’ Hayek wanted them to know that ‘The present tendency would destroy capitalism inevitably. I think the important thing is that people are given a chance to change their minds, before it is irrevocably destroyed.’ What role do ‘facts’ and ‘knowledge’ play in the ‘free’ market? Hayek (1992a [1945], 223) promoted ‘shooting in cold blood’; while Orwell’s 1984 reflected: ‘always there will be the intoxication of power, constantly increasing and constantly growing subtler. Always, at every moment, there will be the thrill of victory, the sensation of trampling on an enemy who is helpless. If you want a picture of the future, imagine a boot stamping on a human face—forever.’ In private celebration of Atlas Shrugged, ‘von’ Mises (2007 [1958], 11) provided Rand with a psychological boot with which to maintain ascribed status: ‘You

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have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you.’ According to Boettke (2007, 180; 2010), ‘To my mind, the most effective flyswatters in affairs of state has always been from Smith to Say; from Mises to Hayek; from Bastiat to Friedman, the economic way of thinking.’ ‘One would be hard pressed to find a more economically literate novel’ than Atlas Shrugged ‘written by a non-economist.’ Boettke was describing a type of economics in which ‘lesser men’ are parasitic on ‘the men of achievement’: In the economy, the individuals of achievement are represented by industrialists and entrepreneurs. The government through policies of taxation and regulation attempt to live parasitically off these individuals of achievement and the masses are deluded by ideologies that justify the theft … Rand’s message was that if the men of achievement stopped allowing themselves to be exploited by lesser men, then the social system of exchange and production would come to an abrupt stop.

In the ‘free’ market, these ‘lesser men’ perish: ‘Atlas Shrugged’ is a celebration of life and happiness. Justice is unrelenting. Creative individuals and undeviating purpose and rationality achieve joy and fulfillment. Parasites who persistently avoid either purpose or reason perish as they should.’ (Greenspan cited by Rubin 2007)

‘In Defence of Demagogues,’ Rothbard (2010 [n.d.], 32–33, 35) declared that there is a great and growing need for their services. What, exactly, have been the charges leveled against the demagogues? They are roughly three in number. In the first place, they are disruptive forces in the body politic. They stir things up. Secondly, they supposedly fail to play the game in appealing to the base emotions rather than to cool reason. From this stems the third charge: that they appeal to the unwashed masses with emotional, extreme, and therefore [Rothbard’s emphasis] unsound views. Add to this the vice of ungentlemanly enthusiasm, and we have about

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catalogued the sins of the species demagogue. The charge of emotionalism is surely an irrelevant one. The problem of an ideology is not whether it is put forth in an emotional, a matter of-fact, or a dull manner. The question is whether or not the ideology is correct.

Rothbard continued: It is true that, in the long run, we will never be free until the intellectuals—the natural molders of public opinions—have been converted to the side of freedom. In the short run, however, the only route to liberty is by an appeal to the masses over the heads of the State and its intellectual bodyguard. And this appeal can be made most effectively by the demagogue—the rough, unpolished man of the people, who can present the truth in simple, effective, yes emotional, language.

To become President, Trump famously proclaimed: ‘I love the poorly educated’: ‘I Am Your Voice.’ And when his ‘Counsellor,’ Kellyanne Conway, used the Orwellian phrase ‘alternative facts’ to describe demonstrable falsehoods, within four days, sales of 1984 increased by 9500%; and Orwell’s novel became a number-one bestseller on Amazon.com (de Freytas-Tamura 2017). Hayek (1978a) ‘loved’ the ‘worst inferior mediocrities’ that he had recruited as his intellectuals: ‘That I cannot reach the public I am fully aware. I need these intermediaries.’67 At the AEI, ‘von’ Hayek’s (1975b, 8, 14) completed his ‘knowledge’ construction model: ‘You might object that I have left out some facts [emphasis added], and that the result would have been different if I had not neglected those other facts. Well, my answer to this objection would be: quote the facts, please, and I shall be willing to consider them.’ The Nobel Prize had transformed Hayek from Cassandra to Emperor: ‘For forty years I have preached that the time to prevent a depression is during the preceding boom.’ After his ‘prediction had come true,’ he was tempted to tell the public: ‘Well, if you had listened to me before you wouldn’t be in this mess.’ Hayek then reassured his AEI audience: ‘Of course, I do not mean you I mean the public in general.’

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Notes 1. http://www.mossdreams.com/2015%20design/1_About/about%20 main.htm. 2. MPS Archives Box 75. 3. Davenport Archives Box 1.7. 4. Davenport Archives Box 1.7. 5. The report stated: ‘Many hesitated to speak lest what they said, if it should ever be published, might involve their friends or relatives at home in danger, and it was found necessary to give an absolute promise that names should not be disclosed. For this reason names have been omitted … It appears to be the custom in the German army for soldiers to be encouraged to keep diaries and record in them the chief events of each day. A good many of these diaries were collected on the field when British troops were advancing over ground which had been held by the enemy, were sent to Head Quarters in France, and despatched thence to the War Office in England. They passed into the possession of the Prisoners of War Information Bureau, and were handed by it to our secretaries. They have been translated with great care. We have inspected them and are absolutely satisfied of their authenticity. They have thrown important light upon the methods followed in the conduct of the war. In one respect indeed, they are the most weighty part of the evidence, because they proceed from a hostile source and are not open to any such criticism on the ground of bias as might be applied to Belgian testimony. From time to time references to these diaries will be found in the text of the Report. In Appendix B they are set out at greater length both in the German original and in an English translation, together with a few photographs of the more important entries.’ http://www.firstworldwar.com/source/brycereport.htm. 6. The Department of Information was founded in February 1917. 7. Malcolm Muggeridge’s (1981, 257, 260, 291) diary entries provide an insight into these operations: ‘Wrote leader [for The Daily Telegraph ] on Government decision to bar communists and fellow-travellers from responsible positions in the Civil Service. Everything is preparing for showdown between communism and the rest’ (15 March 1948). Four days later he appeared on the BBC Friday Forum in which all the speakers agreed: ‘There was insufficient difference of opinion between us to make a lively discussion … Our only difference was on procedure.

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I’d like to roast them in a slow oven.’ Muggeridge (12 August 1948) then noted: ‘Little anonymous man … from the Central Office of Information wants me to do some articles directed towards countering Russian political warfare. Read me from a folder he’s brought with him the rather pitiable directives in this matter. He said he had been in India for a number of years doing government publicity—essentially the sort of meek, broken-down character who undertakes such labours.’ 8. The IRD worked closely with the Central Office of Information (Twigge et al. 2008, 81). 9. Hayek Archives Box 16.35. 10. In 1967, Steven Spender, a contributor to The God that Failed (1950), resigned as editor of Encounter after it was revealed that the CIA had been funding the magazine (Rees 1972, 227–228). 11. http://www.nobelprize.org/nobel_prizes/economics/laureates/1974/ hayek-speech.html. 12. Hayek Archives Box 52.20. 13. Hayek was specifically referring to his own divorce. Friedrich Hayek, interviewed by Armen Alchian 11 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 14. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 15. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 16. http://www.nationalarchives.gov.uk/pathways/census/living/making/ women.htm. 17. http://www.economist.com/node/21541717. 18. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 19. Hayek Archives Box 129.16. 20. Friedrich Hayek, interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 21. Friedrich Hayek interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/).

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22. Friedrich Hayek, interviewed by Jack High date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 23. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 24. MPS Society Box 51.4. 25. MPS Archives Box 57.5. 26. Sometimes with assistance from their employing universities. 27. For example, Machlup (17 November 1958) to Hunold. MPS Archives Box 58.2. 28. Feulner (12 July 1982) to Davenport. Davenport Archives Box 23.15. 29. MPS Archives Box 45.2. 30. MPS Archives Box 54.1. 31. MPS Archives Box 66. 32. http://www.citizensunited.org/who-we-are.aspx. 33. https://mps2016.org/mps-2016-program/. 34. 1947 postcard from Friedman and Aaron Director to Hunold. MPS Archives Box 29.2. 35. MPS Archives Box 100. 36. MPS Archives Box 120. ‘Special gathering Feedback.’ 37. MPS Archives Box 121 ‘Correspondence.’ 38. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 39. http://chapin.williams.edu/exhibits/His%20Majestys%20Speech.pdf. 40. Friedrich Hayek, interviewed by Jack High date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 41. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 42. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 43. Friedrich Hayek, interviewed by James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/).

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44. Friedrich Hayek, interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 45. James Buchanan 28 October 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla. edu/). 46. Friedrich Hayek, interviewed by Thomas Hazlett 12 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 47. Friedrich Hayek, interviewed by Leo Rosten 15 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 48. http://chapin.williams.edu/exhibits/His%20Majestys%20Speech.pdf. 49. ‘The Migration or Importation of such Persons as any of the States now existing shall think proper to admit, shall not be prohibited by the Congress prior to the Year one thousand eight hundred and eight, but a tax or duty may be imposed on such Importation, not exceeding ten dollars for each Person.’ https://www.usconstitution.net/xconst_ A1Sec9.html 50. http://avalon.law.yale.edu/19th_century/jeffmes6.asp. 51. http://eh.net/encyclopedia/slavery-in-the-united-states/. 52. http://www.margaretthatcher.org/document/112178. Hayek Archives Box 101.26. 53. MPS Archives Box 3.5. 54. https://www.ons.gov.uk/ons/rel/lms/labour-market…/unemployment-since-1881.pdf. 55. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 56. Friedrich Hayek, interviewed by Jack High date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 57. h t t p s : / / a r c h i v e s . n b c l e a r n . c o m / p o r t a l / s i t e / k - 1 2 / flatview?cuecard=33292. 58. Somewhat implausibly, Mises (2009a [1978 (1940)], 68) claimed he ‘wanted to avoid everything that might hasten its outbreak.’ 59. Friedrich Hayek, interviewed by Robert Bork 4 November 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/).

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0. MPS Archives Box 54.9. 6 61. MPS Archives Box 55.5. 62. MPS Archives Box 44.1. 63. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 64. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). The previous year, Hayek (1992b [1977]) had described one of these non-existent American bookshops: ‘That the ideas are spreading, there is no doubt. What I cannot judge is what part of the intelligentsia has yet been reached. Compared with what the situation was 25 years ago, instead of a single person in a few centers of the world, there are now dozens wherever I go. But that is still a very small fraction of the people who make opinion, and sometimes I have very depressing experiences. I was quite depressed two weeks ago when I spent an afternoon at Brentano’s Bookshop in New York and was looking at the kind of books most people read. That seems to be hopeless; once you see that you lose all hope.’ 65. ‘Perhaps it’s the degree of constant communication with the media (now one has to call it media; it used to be the press) which is much greater than you would expect of a people with the same general level of education. Compared with current influences, the basic stock of education is rather low. It’s the contrast between the two. The European peasant has less basic education but is not subject to the same stream of constant current information. Usually people who are subject to such a stream of current information have a fairly solid stock of basic information. But Americans have this flood of current information impacting upon comparatively little basic information.’ Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 66. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 67. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/).

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References Archival Insights into the Evolution of Economics (and Related Projects) Leeson, R. (Ed.). (2015). Hayek: A Collaborative Biography Part II Austria, America and the Rise of Hitler, 1899–1933. Basingstoke: Palgrave Macmillan. Leeson, R. (2018). Hayek: A Collaborative Biography Part VIII The Constitution of Liberty: ‘Shooting in Cold Blood’ Hayek’s Plan for the Future of Democracy. Basingstoke: Palgrave Macmillan. Magliulo, A. (2018). Hayek and the Braun Commission. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part XI ‘Fascism’ and Liberalism in the (Austrian) Classical Tradition. Basingstoke: Palgrave Macmillan. Sayer, I. (2015). Hayek: A Collaborative Biography Part III Fraud, Fascism and Free Market Religion (R. Leeson, Ed.). Basingstoke: Palgrave Macmillan. Teacher, D. (2018a). ‘Neutral Academic Data’ and the International Right (1). In R. Leeson (Ed.), Hayek: A Collaborative Biography Part XI Liberalism in the (Austrian) Classical Tradition. Basingstoke: Palgrave Macmillan. Teacher, D. (2018b). ‘Neutral Academic Data’ and the International Right (2). In R. Leeson (Ed.), Hayek: A Collaborative Biography Part XI Liberalism in the (Austrian) Classical Tradition. Basingstoke: Palgrave Macmillan.

Other References Arrow, K. (2009). Roads to Wisdom, Conversations with Ten Nobel Laureates in Economics (K. I. Horn, Ed.). Chelmsford: Edward Elgar. Arrow, K. J., Bernheim, B. D., Feldstein, M. S., McFadden, D. L., Poterba, J. M., & Solow, R. M. (2011). 100 Years of the American Economic Review: The Top 20 Articles. American Economic Review, 101(1), 1–8. Boettke, P. J. (2007). The Economics of Atlas Shrugged. In E. W. Younkins (Ed.), Ayn Rand’s Atlas Shrugged: A Philosophical and Literary Companion. New York: Routledge. Boettke, P. J. (2010, October 20). Scale, Scope and the Political Economy of the State. Coordination Problem. http://www.coordinationproblem. org/2010/10/scale-scope-and-the-political-economy-of-the-state.html.

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Boller, P. F., & George, J. H. (1989). They Never Said It: A Book of Fake Quotes, Misquotes, and Misleading Attributions. Oxford: Oxford University Press. Bork, R. (1989, December 8). The Case of Political Judges. National Review, 23–28. Bork, R. (2013). Saving Justice: Watergate, the Saturday Night Massacre, and Other Adventures of a Solicitor General. New York: Encounter. Bullock, A. (1991). Hitler: A Study in Tyranny. New York: Harper Perennial. Caldwell, B. (1995). Editorial Notes. In B. Caldwell (Ed.), Contra Keynes and Cambridge. The Collected Works of F. A. Hayek. Chicago: University of Chicago Press. Chamberlain, J. (1944). Foreword. In F. A. Hayek (Ed.), The Road to Serfdom. Chicago: University of Chicago Press. Childers, E. (1903). Riddle of the Sands. London: Smith, Elders and Company. Cubitt, C. (2006). A Life of August von Hayek. Bedford, England: Authors on line. Davenport, J. (1974, August 22). Remarks by John A. Davenport to Participants of the ISI Conference Malibu Beach, California. Davenport Archives Box 38.10. Davenport, J. (1981, July). Reflections on Mont Pelerin. The Mont Pelerin Society Newsletter. Davenport, J. (1983, October 1). Why Not Deregulate Labor? FEE. https:// fee.org/articles/why-not-deregulate-labor/. Davidson, E. (1966). The Trials of the Germans: An Account of the Twenty-two Defendants Before the International Military Tribunal at Nuremberg. London: Macmillan. de Freytas-Tamura, K. (2017, January 25). George Orwell’s ‘1984’ Is Suddenly a Best-Seller. New York Times. https://www.nytimes.com/2017/01/25/ books/1984-george-orwell-donald-trump.html. Deist, J. (2017, February 17). Democracy, the God That’s Failing. Mises Wire. https://mises.org/blog/democracy-god-thats-failing. Dillard, D. (1948). The Economics of John Maynard Keynes. New York: Prentice-Hall. Dillard, D. (1975). A Discussion with Friedrich von Hayek. Washington, DC: American Enterprise Institute. Durbin, E. F. (1985). New Jerusalems: The Labour Party and the Economics of Democratic Socialism. London: Routledge & Kegan Paul. Ebeling, R. M. (1975, July). The Second Austrian Conference. Libertarian Forum, 7(7), 4–8. http://rothbard.altervista.org/articles/libertarian-forum/ lf-7-7.pdf.

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Einzig, P. (1937). World Finance, 1935–1937. New York: Macmillan. Fisher, R. (1986, July 21). Moscow’s Strategy in Southern Africa: A Country by Country Review. Heritage Foundation. www.heritage.org/europe/report/ moscows-strategy-southern-africa-country-country-review. Friedman, M. F. (1973, April). Introduction. To F. A. Hayek’s Talk at Mont Pelerin. Mont Pelerin Society Newsletter, p. 3. MPS Archives Box 48.4. Friedman, M. F., & Friedman, R. D. (1998). Two Lucky People: Memoirs. Chicago: University of Chicago Press. Gregory, T. E., von Hayek, F. A., Plant, A., & Robbins, L. (1932, October 19). Spending and Saving Public Works from Rates. The Times, p. 11. Grinder, W. (1977, July). Crosscurrents. Libertarian Review. https://www.libertarianism.org/lr/LR777.pdf. Haberler, G. (1975). A Discussion with Friedrich von Hayek. Washington, DC: American Enterprise Institute. Hamowy, R. (2003). Memories of Rothbard and Hayek. LewRockwell.com. http://www.lewrockwell.com/2003/07/murray-n-rothbard/memoriesof-rothbard-and-hayek/. Hartwell, R. M. (1995). A History of the Mont Pelerin Society. Indianapolis: Liberty Fund. Hayek, F. A. (1933, May). The Trend of Economic Thinking. Economica, 40, 121–137. Hayek, F. A. (1937, February). Economics and Knowledge. Economica, 4, 33–54. Hayek, F. A. (1939). Profit, Interest and Investment. London: Routledge. Hayek, F. A. (1944). The Road to Serfdom. London: Routledge. Hayek, F. A. (1945). The Use of Knowledge in Society. American Economic Review, 35(4), 519–530. Hayek, F. A. (1954). History and Politics. In F. A. Hayek (Ed.), Capitalism and the Historians. Chicago: University of Chicago. Hayek, F. A. (1960). The Constitution of Liberty. Chicago: University of Chicago Press. Hayek, F. A. (1974a, December 11). The Pretence of Knowledge. https://www. nobelprize.org/nobel_prizes/economic-sciences/laureates/1974/hayek-lecture.html. Hayek, F. A. (1974b). Inflation and Unemployment. Mimeo. Hayek Archives Box 129.16. Hayek, F. A. (1975a). Face the Press. https://mises.org/library/hayek-meetspress-1975.

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Hayek, F. A. (1975b). A Discussion with Friedrich von Hayek. Washington, DC: American Enterprise Institute. https://www.aei.org/wp-content/ uploads/2017/03/Discussion-with-Friedrich-von-Hayek-text.pdf. Hayek, F. A. (1976). Choice in Currency a Way to Stop Inflation. London: Institute of Economic Affairs. Hayek, F. A. (1977, September). An Interview with Friedrich Hayek. By Richard Ebeling. Libertarian Review, 10–18. Hayek Archives Box 109.14. Hayek, F. A. (1978a). Oral History Interviews. Los Angeles: Centre for Oral History Research, University of California. http://oralhistory.library.ucla.edu/. Hayek, F. A. (1978b). New Studies in Philosophy, Politics, Economics and the History of Ideas. London: Routledge & Kegan Paul. Hayek, F. A. (1979). The Text of ‘Inside the Hayek Equation.’ Hayek Archives Box 109.26. Hayek, F. A. (1980, April). Interview with Lawrence Minard. Forbes. Reprinted in Mont Pelerin Society Newsletter. MPS Archives Box 67. Hayek, F. A. (1983, February). Interview with F. A. Hayek. Cato Policy Report. http://www.cato.org/policy-report/february-1982/interview-fa-hayek. Hayek, F. A. (1984a). 1980 s Unemployment and the Unions: The Distortion of Relative Prices by Monopoly in the Labour Market. Essays on the impotent price structure of Britain and monopoly in the labour market. London: Institute of Economic Affairs. Hayek, F. A. (1985, June). Professor Friedrich Hayek’s Closing Speech. Mont Pelerin Society Newsletter. MPS Archives Box 67. Hayek, F. A. (1992a). The Fortunes of Liberalism Essays on Austrian Economics and the Ideal of Freedom the Collected Works of F.A. Hayek (P. Klein, Ed.). Chicago: University of Chicago Press. Hayek, F. A. (1992b [1977], July). The Road from Serfdom. Reason. http:// reason.com/archives/1992/07/01/the-road-from-serfdom/5. Hayek, F. A. (1994). Hayek on Hayek an Autobiographical Dialogue. Supplement to The Collected Works of F. A. Hayek (S. Kresge & L. Wenar, Eds.). Chicago: University of Chicago Press. Hayek, F. A. (1995). Contra Keynes and Cambridge. The Collected Works of F. A. Hayek (B. Caldwell, Ed.). Chicago: University of Chicago Press. Hayek, F. A. (1999a). Good Money, Part 1. The New World. The Collected Works of F. A. Hayek (S. Kresge, Ed.). London: Routledge. Hayek, F. A. (1999b). Good Money, Part 2. The Standard. The Collected Works of F. A. Hayek (S. Kresge, Ed.). London: Routledge.

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Hayek, F. A. (2009b [1979]). A Conversation with Professor Friedrich A. Hayek. In D. Pizano (Ed.), Conversations with Great Economists. Mexico: Jorge Pinto Books. Hayek, F. A. (2010). Studies on the Abuse and Decline of Reason. The Collected Works of F. A. Hayek (B. Caldwell, Ed.). Chicago: University of Chicago Press. Hayek, F. A. (2013). Law, Legislation and Liberty. London: Routledge. Hazlitt, H. (2004, November 1). The Mont Pelerin Society. The Freeman. https://fee.org/articles/the-mont-pelerin-society/. Heldman, D. C., Bennett, J. T., & Johnson, M. H. (1981). Deregulating Labor Relations. Dallas: Fisher Institute. Hoppe, H.-H. (2001). Democracy The God that Failed: The Economics and Politics of Monarchy, Democracy and Natural Order. New Brunswick: Transaction Publishers. Howson, S. (2011). Lionel Robbins. Cambridge: Cambridge University Press. Hülsmann, J. G. (2007). Mises: The Last Knight of Liberalism. Auburn, AL: Ludwig von Mises Institute. Hunold, A. (1962). How the Mont Pelerin Society Lost it’s Soul. Mimeo. Zurich. Hayek Archives Box 129.10. Jenks, J. (2006). British Propaganda and News Media in the Cold War. Edinburgh: Edinburgh University Press. Jenks, J. (2015). Authoritative Sources: The Information Research Department, Journalism and Publishing. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part III Fraud, Fascism and Free Market Religion. Basingstoke: Palgrave Macmillan. Keynes, J. M. (1936). General Theory of Employment, Interest and Money. New York and London: Harcourt, Brace. Kirk, T. (1996). Nazism and the Working Class in Austria: Industrial Unrest and Political Dissent in the National Community. Cambridge: Cambridge University Press. Koether, G. (2000). A Life Among Austrians. Austrian Economics Newsletter. 20.3. https://mises.org/system/tdf/aen20_3_1_0.pdf?file=1&type=document. Kristol, I. (1995). Neoconservatism: The Autobiography of an Idea. New York: Free Press. Kuehnelt-Leddihn, E. M. (pseudonym Campbell, F. S). (1978 [1943]). The Menace of the Herd: Or, Procrustes at Large (Studies in Conservative Philosophy ). New York: Gordon Press. Kummer, F. (1932). German Trade-Unions and Their 1931 Congress. Monthly Labor Review, 34(1), 13–18.

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Lackmann, L. (1978). An Interview with Ludwig Lackman. Austrian Economic Newsletter, 1(3) (Fall). https://mises.org/library/interview-ludwig-lachmann. Lashmar, P., & Oliver, J. (1998). Britain’s Secret Propaganda War. Stroud: Sutton Publishing Company. Lawson, V. (2003, November 24). Death Orgasms—Yours for $34.95. Sydney Morning Herald. http://www.smh.com.au/articles/2003/11/23/1069522473826. html. Le Queux, W. T. (1894). The Great War in England in 1897. London: Tower. Le Queux, W. T. (1906). The Invasion of 1910 with an account of the Siege of London. London: E. Nash. Ledeen, M. (1980, September 1). The Spike, by Arnaud de Borchgrave and Robert Moss. Commentary. https://www.commentarymagazine.com/articles/the-spikeby-arnaud-de-borchgrave-and-robert-moss/. Leeson, R., & Schiffman, D. (2015). The Triumph of Rhetoric: Pigou as Keynesian Whipping Boy and its Unintended Consequences. In R. Leeson (Ed.), Hayek: A Collaborative Biography Part III Fraud, Fascism and Free Market Religion. Basingstoke: Palgrave Macmillan. Leube, K. R. (2016, May 16). An Interview with F. A. Hayek’s Student, Kurt Leube. By Rosamaria Bitetti Epicentre. http://www.epicenternetwork.eu/ blog/an-interview-with-f-a-hayeks-student-kurt-leube/. Maddison, A. (1982). Phases of Capitalist Development. New York: Oxford University Press. Magliulo, A. (2016). Hayek and the Great Depression of 1929: Did he really change his mind? European Journal of the History of Economic Thought, 23(1). Martin, A. (2010, September). The Analects of Boettke. Journal of Private Enterprise, 26(1), 125–141. McCormick, D. (1959). The Mystery of Lord Kitchener’s Death. London: Putnam. McCormick, D. (1976). Taken for a Ride: The History of Cons and Con-men. London: Hardwood Smart. McCormick, D. (1986). The Truth Twisters. London: MacDonalds. McCormick, D. (1993). 17F—The Life of Ian Fleming. London: Peter Owen. McCormick, D. (pseudonym: Deacon, R.). (1969). A History of the British Secret Service. London: Frederick Muller. McCormick, D. (pseudonym: Deacon, R.). (1973). The Master Book of Spies: The World of Espionage, Master Spies, Tortures, Interrogations, Spy Equipment, Escapes, Codes & How You Can Become a Spy. London: Hodder Causton.

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Piketty, T., & Zucman, G. (2015). Wealth and Inheritance in the Long Run. In A. B. Atkinson & F. Bourguignon (Eds.), Handbook of Income Distribution (Vol. 2A). Amsterdam: North Holland. Pincher, C. (1981). Their Trade is Treachery. London: Sidgwick & Jackson. Pugh, M. (2005). Hurrah For The Blackshirts! Fascists and Fascism in Britain Between the Wars. London: Jonathan Cape. Raina, P. K. (2001). George Macaulay Trevelyan: A Portrait in Letters. Edinburgh: Pentland. Rees, G. (1972). A Chapter of Accidents. New York: Liberty Press. Rizzo, M. (2009, October 20). Hayek on Deflation and the Great Depression. Coordination Problem. http://austrianeconomists.typepad.com/ weblog/2009/10/hayek-on-deflation-and-the-great-depression.html. Rockwell, L. H., Jr. (1994, December). The Cognitive State. Rothbard-Rockwell Report. http://www.unz.org/Pub/RothbardRockwellReport-1994dec-00018. Rockwell, L. H., Jr. (1998, September 15). Mises and Liberty. ‘This was the keynote address at the Ludwig von Mises Institute’s new building dedication and conference on the great Austrian economists, June 5–6, in Auburn, Alabama.’ Mises Institute. https://mises.org/library/mises-and-liberty. Rothbard, M. N. 1994. Nation by Consent. Decomposing the National State. Journal of Libertarian Studies, 11(1), 1–10. https://mises.org/library/ uk-nation-consent. Rothbard, M. N. (2010). Strictly Confidential: The Private Volker Fund Memos of Murray N. Rothbard (D. Gordon, Ed.). Auburn, AL: Ludwig von Mises Institute. Rothbard, M. N. (2012 [1979]). Myth and Truth About Libertarianism. https:// mises.org/library/myth-and-truth-about-libertarianism. Rubin, H. (2007, September 15). Ayn Rand’s Literature of capitalism. New York Times. http://www.nytimes.com/2007/09/15/business/15atlas.html. Ruckelshaus, W. D. (2017, July 27). ‘Saturday Night Massacre’ Veteran Offers Trump Some Advice. New York Times. https://www.nytimes.com/2017/07/27/ opinion/a-saturday-night-massacre-veteran-offers-trump-some-advice.html. Russell, B. 1935. Some Psychological Difficulties of Pacifism in Wartime. In Bell, J. (Ed.), We Did Not Fight 1914–1918 Experiences of War Resisters. London: Cobden-Sanderson. Sanders, M. L. (1975). Wellington House and British Propaganda During the First World War. The Historical Journal, 18, 119–146. Sereny, G. (1985, May 9). The Sage of the Free Thinking World. The Times. Shirer, W. L. (1960). Rise and Fall of the Third Reich. London: Secker and Warburg.

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1 The House of Habsburg The Archduke of Austria and Holy Roman Emperor Charles V reigned from 1519 to 1558, ruling over nearly 1.5 million square miles (4 million square kilometres) in Europe, the Far East and the Americas; he voluntarily abdicated in 1556 (his son became Philip II of Spain). Franz Joseph (1830–1916) ruled the Habsburg Empire for 68 years (1848– 1916); his grandnephew (Otto’s father), the inauspiciously named Charles I, reigned for less than two years before issuing a proclamation renouncing ‘all participation in the affairs of state’ (11 November 1918). This was interpreted as abdication. However, in the hagiographic A Heart for Europe: The Lives of Emperor Charles and Empress Zita of Austria Hungary, Bogle and Bogle (1999, 114–115) explained: ‘At the same time it was hoped that the door remained open, and that once saner times arrived the Monarch would be able to resume his place at the head of his people.’ Charles insisted: ‘I bear no trace of blame’ for the Great War; the book’s Foreword was provided by his eldest son, ‘HRIH Archduke Otto of Austria.’ After beatification by the Roman Catholic Church, the last Habsburg Emperor became ‘Blessed Charles of Austria.’ © The Author(s) 2018 R. Leeson, Hayek: A Collaborative Biography, Archival Insights into the Evolution of Economics, https://doi.org/10.1007/978-3-319-77428-2_10

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His second-born son, Archduke Robert d’Autriche, Archduke of Austria-Este, was an MPS member from 1968 until his death in 19941; Buchanan (1992, 130) met his ‘first Princess’ through the MPS. In 1919, the Habsburgs were banished from Austria until they renounced all intentions of regaining the throne and accepted the same legal status as their former subjects.2 Archdukes Felix and Karl Ludwig refused; Otto described the demand as ‘a madness that could only have come from the brain of some indescribably small-minded fanatic’ (cited by Brook-Shepherd 2009, Foreword). The Holy Roman Empire had been dissolved in 1806, when the last Holy Roman Emperor, Francis II (from 1804, Emperor Francis I of Austria), abdicated following military defeat at Austerlitz. This defeat has been rectified. According to Hayek (1978), the University of Vienna Professor of Economics, ‘Count Degenfeld-[Schonburg], played a certain role when I finally got my Privatdozenteur ’—before emphasizing: ‘but I never had any contact with him otherwise.’3 In 2017, the head of the ‘Degenfeld-Schonburg’ family describes himself as ‘Count of The Holy Roman Empire’; and the Pretender’s son and heir, Karl, describes himself as ‘Prince, Duke, and Count of The Holy Roman Empire.’4 The Empire continues as ‘an International organisation constituted by a united group of Nobility who share the same loyalties, aims and ideals … The Order aims to promote the Christian Faith and the traditions and patrimony of the Holy Roman Empire … The Supreme Prelate of the Imperial Order of The Holy Roman Empire, is held by His Holiness Pope Francis … The Historical Council of the Imperial Order is made up of well known academics in the field of historical and juridical studies.’ The ‘Holy Roman Empire hands down its own traditions through the surviving families, and it has never suffered a conquest by any foreign power.’5 The ‘Great’ War undermined European dynastic intergenerational entitlement programs. The Habsburg-born, Austrian-educated Arthur Koestler (1950, 19) described some of the affected: ‘Those who refused to admit that they had become déclassé, who clung to the empty shell of gentility, joined the Nazis and found comfort in blaming their fate on Versailles and the Jews.’ Previously, Austrian School economists

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tended to be Habsburg loyalists; after being declassed, they promoted both the far-right of the democratic spectrum and its anti-democratic appendage. In 1922, the nine-year-old Otto became Pretender to four thrones. In May 1961, to expunge the exclusion clause in his passport which prevented him from travelling to Austria, he pretended to make an unqualified pledge of renunciation (Brook-Shepherd 2003, 18, 182–183); later, he admitted his ‘heart had not been in the renunciation, which he made out of sheer pragmatism.’ His body was entombed in the Imperial Crypt under the Capuchin Church in Vienna; and his heart was buried in Pannonhalma Archabbey, Hungary (van der Vat 2011). According to David Rockefeller (2002, 413), ‘von’ Habsburg remained an unabashed ‘claimant to all the lands of the Austro-Hungarian empire.’ Like Rockefeller, Otto was a prominent participant in the postwar ‘International Right’ (Teacher 2018): in Germany, he joined the Christian Social Union (CSU), was elected to the European parliament and, from 1979, sat for 20 years as the member for Bavaria. Four years after the demise of the House of Habsburg, Mises (1922, 420; 1932, 435) noted: Nicht anders als fiir die Religionen des Ostens heiBt es flir das Christentum, entweder untergehen oder den Kapitalismus iiberwinden. Fiir den Kampf gegen den Kapitalismus aber gibt es heute, da die Empfehlung der Riickkehr zur mittelalterlichen Gesellschaftsordnung nur wenig Werbekraft besitzt, kein wirksameres Programm als das des Sozialismus.

In Kahane’s translation this became: ‘Just as in the case of Eastern religions, Christianity must either overcome Capitalism or go under. Yet in the fight against Capitalism to-day, there is no more effective warcry than Socialism, now that suggestions of a return to the medieval social order finds few supporters’ (Mises 1951 [1932], 428). But rather than Kahane’s translation of ‘nur wenig Werbekraft besitzt’ as ‘finds few supporters’—which suggests consumer sovereignty—Mises was actually referring to a weakened producer sovereignty: ‘has very little advertising power.’ Mises (1951 [1932], 443) provided a ‘Slogan of Liberty’

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which Kahane translated as ‘The lord of production is the consumer’ but which Mises (1922, 412; 1932, 435) had capitalized: ‘Der Herr der Produktion ist der Konsument.’ In ‘The Cultural Background of Ludwig von Mises,’ KuehneltLeddihn (n.d.) dated the Austrian Déluge: 1908, when the disastrous ‘one man-one vote’ principle was introduced.

And according to Davenport (1985), apartheid—‘separate development’— in one crucial respect, symbolized ‘liberty’: Similar reflections concern the broadening of the franchise where the world owes South Africa a debt for refusing to go along with the mania of majority rule and ‘one man one vote once.’ Admittedly the color bar is an offensive and clumsy way to limit the follies of doctrinaire democracy. Far better to knit minimal educational or property requirements into the franchise as obtained in the infancy of the United States.

Remnants of the British Empire lingered on in Rhodesia until 1979, and in apartheid South Africa until after the collapse of communism. A total of 1500 Americans fought as volunteers in defense of white rule in Rhodesia. The pro-South Africa alliance included Evangelical Christians, ‘respectful of a country that banned pornography,’ plus the US gun lobby. Moreover, Prime Minister F.W. de Klerk was ‘religious’; while ‘few ANC leaders were churchgoers’ and their ‘self styled moral coalition’ included ‘gays, lesbians, Chicanistas, ecologists, feminists’ (Gann and Duigan 1991, 29, 57–58, 92, 117, 122, 127–128, 175). White supremacy has been defended on a variety of grounds: Hayek (1978), for example, defended the ‘civilisation’ of apartheid against the American ‘fashion’ of ‘human rights’ (Chapter 2, above); ‘Deacon’ McCormick offered the ‘Pilgrim Fathers’ defense. The mountain after which Hayek’s Mont Pelerin Society was named translates literally into ‘Pilgrim Mountain.’ The label ‘pilgrim’ can clearly be appropriated for a variety of purposes. Apartheid was the creation of the descendants of the Vortrekkers (‘pioneers’) who in the 1830s headed north away from ‘oppressive’ British rule in Cape Colony.

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They believed themselves to be new Israelites, God’s chosen people, ‘pilgrims’ entering the Promised Land.6 ‘Deacon’ McCormick (1956, 189, 214; 1973, 18) reflected that the ‘part played in empire building by some escapists turned pioneers is in itself a fascinating story.’ He grew tired of the ‘British colony’ in Algiers waiting for St. George to ‘drive away the wicked socialists’ from the Old Country. But he was inspired by ‘hundreds of enterprising British emigrants’ taking the overland trip to settle in apartheid South Africa: ‘perhaps the boldest and bravest adventure of its kind since the days of the Pilgrim Fathers.’ One of ‘von’ Hayek’s LSE colleagues detected in The Road to Serfdom (1944) a ‘thoroughly Hitlerian contempt for the democratic man’ (Finer 1945, 210); ‘von’ Mises (2007 [1958], 11) told Rand that she was assisting this natural order (‘You have the courage to tell the masses what no politician told them: you are inferior and all the improvements in your conditions which you simply take for granted you owe to the effort of men who are better than you’); and ‘Deacon’ McCormick (7 October 1978) informed his copy editor: ‘The trouble with the British is that they never want to understand anything. Throughout history we have been a nation of donkeys led by a few, occasionally, spirited human beings. I still rate the British working classes as being about on a par with the lowest type of African tribe—more so today than 30 years ago.’7 At Roche’s Hillsdale College, the serving MPS President, Shenfield (1973) wrote an ‘Open Letter to Ian Smith, Prime Minister of Rhodesia,’ to ‘congratulate you.’ The ‘world is sick. No one is in a better position than you to grasp the nature of its sickness, for you are a victim of the poison which the sickness has produced.’ Rhodesia was a ‘racially harmonious Society,’ and Britain was ‘sick’ to have elected Harold Wilson twice. There was a ‘deep sickness in America also.’ For the first time in its history, the US was a ‘country that people wish to leave’: ‘many look for a haven but few can find it. Here is your great opportunity.’ The world ‘needs a sizeable country, such as yours, as a center of moral and political regeneration.’ Majority rule in Rhodesia would not mean the slow decay of liberty which it has meant in Europe and America but its speedy extinction, now typical of Africa. Smith should reply to majority rule with ‘No, No, Never.’

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Ruling class restrictions on the franchise was the ‘free’ market answer in Rhodesia and elsewhere: ‘Property, not education, is the right qualification for the franchise in a free humane Society.’ Smith should ‘tell the world proudly that in Rhodesia poverty and ignorance are relieved by private enterprise and charity.’ As an employee of employer trade unions (the CBI), Shenfield (1973) advised Smith that he must ‘restrain then power of your [labour] trade unions for if you do not they will restrain your power to build a model Rhodesia … Do these thing, Mr. Smith, and you will save Rhodesia by your exertions and then free world by your example.’ According to Rockwell, ‘in European history, the Habsburg monarchy was a famed guardian of Western civilization. But even those of us devoted to the old [pre-1861?] American republic are aware of the warm and long relationship between the Austrian school and the House of Habsburg’ (cited by Palmer 1997). Referring to Kuehnelt-Leddihn, Rockwell (2008) stated: ‘I learned a huge amount from this aristocratic polymath, and had the honor of acquiring and editing his monumental work on Leftism: From de Sade and Marx to Hitler and Marcuse, for Arlington House, Publishers. Erik was a Catholic, an Old Liberal, and a trusted advisor to Otto von Habsburg and Cardinal Ratzinger (now Benedict XVI). He was a hereditary knight of the Holy Roman Empire and an adjunct scholar of the Mises Institute (great combination!).’ According to Rockwell (2010, 291), Arlington House Publishing was named after ‘Robert E. Lee’s ancestral home, stolen by Lincoln for a Union cemetery (I still hope to see it returned some day.).’ Human Events (27 January 1995) reported: ‘Fearing a continued lack of resolve to resist a growing tyranny by the federal government,’ the Ludwig von Mises Institute is ‘always looking at bold ideas.’ This spring, the LvMI - already one of the intellectual leaders of the growing states’ rights movement, the resurgence of state militias and the move toward new political parties - will be holding a landmark conference on the radical idea of secession this summer in Charleston, S.C., the site, of course, of Fort Sumter, where the first battle of the Civil War was fought. ‘If we continue to have this Leviathan state in Washington managing our lives, redistributing our money, destroying our families, businesses and

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communities, then the American people are going to have to look for more radical solutions. I hope it doesn’t have to be another revolution,’ said Rockwell.8

Rockwell’s successor as President of the tax-exempt Mises Institute described the Austrian revolution: ‘democracy is a sham that should be opposed by all liberty-loving people … Democracy was always a bad idea, one that encourages mindless majoritarianism, political pandering, theft, redistribution, war, and an entitlement mentality among supposedly noble voters’ (Deist 2017). To implement this vision, two Austrianinspired anti-democratic activists exerted a profound global influence: Crozier and Moss. Moss’ Cold War thriller, The Spike (1980), co-­ authored with Arnaud, Comte de Borchgrave d’Altena (sixteenth in line to the Belgian throne), became a best-seller when candidate Reagan was ‘photographed reading it on a plane’ (O’Sullivan 2015). Republics transformed ‘subjects’ into ‘citizens’: The 1919 Law on the Abolition of Nobility forcibly imposed the status of ‘German Austrian citizens’ equal before the law in all respects on Austrian nobles (Gusejnova 2012, 115). Eight years later, Mises (1985 [1927], 54–55) complained: ‘The propensity of our contemporaries to demand authoritarian prohibition as soon as something does not please them, and their readiness to submit to such prohibitions even when what is prohibited is quite agreeable to them shows how deeply ingrained the spirit of servility still remains within them. It will require many long years of self-education until the subject can turn himself into the citizen.’ At the 1984 MPS meeting, John Gray complained that the non-Austrian ‘welfare state’ had ‘produced a servile mentality’ (cited by Chamberlain 1984). Buchanan (1992, 130) observed this servility at MPS meetings—where there was ‘too much deference accorded to Hayek, and especially to Ludwig von Mises who seemed to demand sycophancy.’ Mises (1985 [1927], 19, 29, 51) instructed his devotees: ‘The program of liberalism, therefore, if condensed into a single word, would have to read: property [Mises’ emphasis], that is, private ownership of the means of production … All the other demands of liberalism result from this fundamental demand … The victory of Fascism in a number of countries is only an episode in the long series of struggles over the

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problem of property.’ It was ‘emergency’ which, according to Mises, led Austrian School economists to demand ‘Fascism’—or the ‘authoritarian prohibition’ of political opponents. When the Zimmermann Telegram revealed that the Germans had offered to ‘return’ Texas, Arizona and New Mexico to Mexico in the event of a successful military alliance, President Wilson asked Congress for ‘a war to end all wars’ that would ‘make the world safe for democracy.’ War was declared on Germany (6 April 1917) and AustroHungary (7 December 1917); and, 24 years later, on Japan. Many Americans of German origins were interned (1917–1918); as were many Americans of Japanese origin (1941–1945). According to Kuehnelt-Leddihn (n.d.), during the ‘Great’ War, Hayek and Mises fought to prevent the ‘world from being made safe for democracy.’ Vast tracts of the Americas were once the ‘property’ of the Habsburgled First Reich. After the Austrian-led Third Reich declared war on the United States (11 December 1941), Otto created the Austrian National Committee: He influenced the Roosevelt American administration and became the common denominator for the feuding groups of Austrian ‘patriots.’ A generation earlier, Serbian nationalism and Russia’s Balkan ambitions threatened to disintegrate his family’s Empire (Williamson 1991). After the assassination of the Habsburg heir presumptive (Archduke Franz Ferdinand), Otto’s great-granduncle, Kaiser Franz Josef, initiated the ‘Great’ War by invading Serbia to inject some virility into the faded glory of the Habsburg monarchy (Sked 1989, 254). During World War II, the Pretender delivered an ‘excellent’ diplomatic performance which prompted the allies to re-establish an independent Austria after the war. This ‘success’ boosted the monarchical ‘principle’ and many Austrian expatriates were ‘betting’ on a Habsburg restoration (Hülsmann 2007, 811). Mises (2009/1978 [1940], 78) sneered at ‘Count’ DegenfeldSchonburg: He was ‘poorly versed in the problems of economics.’ What Hülsmann (2007, 811) diplomatically referred to as Mises’ former colleague at the University of Vienna, Degenfeld, was one of the ‘staunch’ supporters of monarchical restoration on ‘legitimist’ grounds. ‘Count von’ Coudenhove-Kalergi, a close ally of the Habsburg Pretender, had

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submitted a petition to the American government for a ‘separate treatment of Austria’ after the war—which Mises signed along with many other leading Austrian expatriates. Mises prepared a one-page manifesto outlining an Austrian post-war order based on the principle—or slogan—of ‘individual liberty’ which Mises wrote but to which he did not sign his name. The ‘new’ Austria would seek integration into an Eastern European Union and a new league of nations. Mises was also a member of Ferdinand Count von Czernin’s Austrian Action (Hülsmann 2007, 811). In mid-April 1942, the Pretender asked Mises and others about restoration: Mises prioritized this task and answered the questionnaire almost immediately. In the only part of his confidential report that has, apparently, survived, Mises discussed the conditions under which a restoration could be achieved: there was no contradiction between national self-determination and a monarchical regime, provided that the monarchy was established by a ‘free’ referendum (Hülsmann 2007, 818). On 10 April 1938, almost 100% of Austrians (99.71% turnout) voted in favour of Anschluss with Germany (Rathkolb 2009, 11; Wasserstein 2007, 271; Shirer 1960, 429). After the Eastern Reich joined the Third Reich, Austrians—who comprised only 8% of the total population—rapidly became disproportionately represented as SS members (13%), concentration camp staff (40%) and concentration camp commanders (70%). Austrian territory was the road to serfdom for the 800,000 victims who were compelled to work as war-time slave ­labourers—many of whom were murdered as the Allies advanced (Berger 2012, 84). On 22 April 1942, Mises participated in a plenary meeting of the Austrian National Committee, and a month later was elected to a subcommittee on post-war reconstruction. In June 1942, he also participated in a subcommittee on foreign policy where it ‘appears’ that he had a ‘major’ impact. The first sessions drafted a Declaration of the United Free Austrians supposedly based on the December 1941 manifesto of the Austrian Committee. In contrast with the manifesto, the Declaration asserted that Austria had been ‘coercively’ overrun by the Nazis and was therefore under ‘de facto occupation’ by a foreign army (Hülsmann 2007, 819–820).

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Many Germans have tried to come to grips with their Austrian-led Fascism through Vergangenheitsbewältigung (‘coping with the past’); some Austrians have denied responsibility: ‘We have persuaded the world that Hitler was German and Mozart was Austrian!’ Hayek told Cubitt (2006, 17, 51) that his mother had been ‘converted to Nazism by a woman friend’; Hitler’s success was due to his appeal to women, ‘citing his mother as another example.’ To ‘his certain knowledge,’ Nazism ‘had been actively upheld [in Austria] long before it had reached Germany.’ And both Hayek and Mises had promoted Anschluss (Chapter 2, above). This was rectified by the Austrian National Committee which united all Austrian ‘rightwingers’ and provided them with political representation in Washington (via Egon Ranshofen-Wertheimer). One of their successes was the proclamation of ‘Austrian Day’ (25 July 1942) by twelve state governors. U.S. Secretary of State, Cordell Hull, declared that the US government had never recognized Hitler’s annexation of Austria. This ‘dissociation of German villains and Austrian victims’ remain the ‘one common position of the various Austrian right-wing expatriate groups’ throughout the war of ‘Democracy against Fascism’— here they achieved a ‘clear success’ (Hülsmann 2007, 819).

2 The Heritage Foundation There is a large overlap between the Trump Administration and the ‘free’ market agenda—a top priority for both groups is to cultivate the other. The New York Times reported that over dinner in the private residence of the White House, Trump asked Fox News’s Sean Hannity about the impression that he was creating new factory jobs—‘How’s this playing?’ Tony Perkins, president of the Family Research Council who pushed Trump to make the statement barring transgender people from the military, reflected: ‘I’ve been to the White House I don’t know how many more times in the first six months this year than I was during the entire Bush administration.’ Trump told Jim DeMint, the former Heritage Foundation President, ‘I love you, Jim,’ during an intimate gathering of conservative leaders in the Oval Office (Peters 2017).

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Founded in 1973 by Joseph Coors, a member of Reagan’s ‘kitchen cabinet,’ the ‘mission’ of the Washington-based Heritage Foundation is to ‘formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense.’9 It has trustees from Chase Manhattan bank, Dow Chemical, General Motors, Pfizer, Sears and Mobil; and Richard Mellon Scaife’s Foundation is a major donor (Teacher 2018). Ebeling held a Visiting Professorship in American Economic History and Entrepreneurship at Trinity College, Hartford, Connecticut, named after the Heritage Foundation Chairman, Shelby C. Davis. As Hayek (1978) perceptively noted, ‘there are certainly many ordering principles operating in forming society, and each is of its own kind.’10 The Washington Post reported that he ‘is everything you want an 83-year-old Viennese conservative economists to be. Tall and rumpled. A pearl stickpin in his tie. A watch chain across his vest, even though he wears a digital on his wrist. An accent which melds German Z’s with British O’s.’ With ‘lovely aristocratic ease,’ he became a ‘favorite of conservative economists from Irving Kristol to William Buckley.’ While Hayek described the ‘spontaneous formation of an order’ as ‘extremely complex structures’ and the market as ‘an exo-somatic sense organ,’ the staff of the Heritage Foundation ‘hover around him with a combination of delight and awe that makes them seem like small boys around a football hero’ (Allen 1982).

3 Fossil Fuels The fossil fuel industry funds the Austrian School of Economics, a significant proportion of whom describe themselves as a Stone Age tribe—‘paleos’—some of whom are committed to administering Bronze Age justice—public stoning. Caldwell’s (2004, xi, 344, n. 16) Hayek’s Challenge was funded by the John W. Pope Foundation and the Liberty Fund (who hosted a conference to discuss a preliminary draft of the volume). According to its 2013–2014 Annual Report, Duke University’s CHOPE was ‘founded in 2008 with a significant grant from the John

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W. Pope Foundation’ (Caldwell 2014); and in fiscal year 2014–2015, CHOPE received $175,000 from the Pope Foundation.11 According to its mission statement, ‘The Pope Foundation supports organizations that work to advance free enterprise—the same system that allowed Variety Wholesalers to flourish—for future generations of Americans. To achieve those ends, the Pope Foundation supports a network of organizations in North Carolina that advocate for free markets, limited government, individual responsibility, and government transparency.’ With regard to ‘Education support,’ the ‘Pope Foundation believes that Americans have a duty to teach the next generation about the blessings of liberty.’12 Heritage is a grantee of the Donor Trust; and the Pope Foundation is the sixth largest contributor to what Robert Brulle (2014, 687, Fig. 1, 681) described as the ‘Climate Change Counter Movement’ (CCCM). Referring to private sector transparency, Bruelle reported that ‘there is evidence of a trend toward concealing the sources of CCCM funding through the use of donor directed philanthropies.’ In December 2013, Whitney Ball, the president of the Donors Trust and Donors Capital Fund, ‘said the organisation had no say in deciding which projects would receive funding. However, Ball told the Guardian last February that Donors offered funders the assurance their money would never go to Greenpeace’ (Goldenberg 2013). Instead, they are committed to ‘Building a Legacy of Liberty.’13 Lawson Bader, Ball’s successor as president of both DonorsTrust and Donors Capital Fund, was formerly president of the Competitive Enterprise Institute and Vice President at the Mercatus Center, GMU.14 In recent years, DonorsTrust have received more than $3.2 million from the ‘Knowledge and Progress Fund,’ which is chaired by Charles Koch (Bennett 2012). Keynes (1936, 374) famously justified capitalism: ‘It is better that a man should tyrannise over his bank balance than over his fellow-citizens and whilst the former is sometimes denounced as being but a means to the latter, sometimes at least it is an alternative.’ In ‘The Business Community: Resisting Regulation,’ Charles Koch (1978, 32) explained that academic regulation was required: Even when business has supported ‘free enterprise’ education, it has been ineffectual because businessmen have had little understanding of the underlying

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philosophy or of a meaningful strategy. Businessmen have spent their money on disasters such as buying a ‘free enterprise’ chair at their alma mater and watching in dismay as the holder teaches everything but free enterprise.

In fiscal year 2014–2015, the Pope Foundation provided the IHS with $655,000.15 Boettke is the ‘Charles Koch Distinguished Alumnus, The Institute for Humane Studies,’16 and the ‘vice president and director of the F. A. Hayek Program for Advanced Study in Philosophy, Politics, and Economics at the Mercatus Cente.’17 Ebeling and Boettke presumably exemplify the Free Market Cure to Allison’s (2014) Leadership Crisis. In ‘The Case for Ordinary Economics,’ Boettke and Stefanie HaeffeleBalch (2017) informed USA Today readers: ‘Limiting the influence of special interests and tying budgets to performance are just some ways to hold politicians accountable and ensure better policy outcomes.’ According to The New Yorker, between 2007 and 2011 the Koch brothers donated $41.2 million to ninety tax-exempt organizations promoting the ultra-libertarian policies that the brothers favor—policies that are often highly advantageous to their corporate interests. In addition, during this same period they gave $30.5 million to two hundred and twenty-one colleges and universities, often to fund academic programs advocating their worldview. Among the positions embraced by the Kochs are fewer government regulations on business, lower taxes, and skepticism about the causes and impact of climate change. (Mayer 2013)

According to Environmental Protection Agency statistics, in 2011 Koch Industries, which has ‘oil refineries in three states, emitted over twenty-four million tons of carbon dioxide, as much as is typically emitted by five million cars.’ During the 2010 mid-term elections, Koch Industries’ Political Action Committee spent $1.3 million on congressional campaigns: A ‘high watermark’ for the ‘No Climate Tax’ pledge devised by the Kochfunded ‘Americans for Prosperity.’ Of the 85 newly-elected Republican congressmen, 76 had signed the ‘No Climate Tax’ pledge—of whom 57 had received Koch campaign contributions (Mayer 2013). David Koch told Doherty (2007, 409): ‘If we’re going to give a lot of money, we’ll make darn sure they spend it in a way that goes along

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with our interest. And if they make a wrong turn and start doing things we don’t agree with, we withdraw funding. We do exert that kind of control.’ After the long-suppressed evidence about Hayek was presented, Boettke (SHOE 20 May 2014) became hysterical: ‘Can we PLEASE return to the real business of SHOE rather than this [Boettke’s capitals].’ What business is Boettke in? In ‘The Transformative Rise of Austrian Economics,’ Boettke (2015) stated that he lives in a ‘different world than the 99%’ and ‘I’d like to make more money.’ Trump (2 August 2015) denigrated those who ‘beg for money etc. from the Koch Brothers. Puppets?’18 In February 2014, David and Charles Koch were ranked joint 9th richest people in the world with an estimated net worth of $36 billion each.19 Charles Koch (1978, 31) referred to the ‘great economist Ludwig von Mises’; and in ‘Peter Boettke on the Rise of Austrian Economics, Its Academic Inroads and Why the Market Should Decide,’ the devout Presuppositionalist, who considers Mises—a paid business sector lobbyist and member of the official Fascist social club—to be the ‘greatest economist of all time,’ has met many of our donors through the years and they are wonderful individuals who care passionately about liberty and economic education and economic scholarship. Both Charles and David Koch are the same way. They care passionately about the cause of economic and political liberty and they have generously provided significant funds to support numerous efforts. I have had many conversations with Charles over the years, including about research priorities for a free [emphasis added] society. He has never once tried to influence what I was working on, or the way I was working on it. He is a man of great intelligence and intellectual curiosity … Charles is someone I admire and am grateful to for both his support and his professional friendship over the years. (Boettke 2010)

4 The John Birch Society and the Moonies The Austrian School fraud, ‘Deacon’ McCormick (1960, 146), occasionally took his family to the local church, in part because he did ‘not believe that any civilised community can avoid decadence without having a church as a rallying point.’ Referring to ‘religious and

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semi-religious cults,’ ‘Deacon’ McCormick (1980, 21, 46, 125) noted that Britain ‘has imported nearly a hundred new “religions” in the past 25 years,’ including the ‘Moonies (Unification Church) led by a Korean millionaire.’ At ‘the Reverend’ Moon’s invitation, Hayek agreed to deliver the 1985 Plenary Lecture to Moon’s International Conference on the Unity of the Sciences (ICUS) on ‘The Presumption of Reason.’20 Simultaneously, The New York Times reported that ‘The Rev. Sun Myung Moon, the founder and spiritual leader of the Unification Church, was released yesterday from a Federal prison in Connecticut after serving almost 12 months for income-tax evasion’ (Blair 1985). Hayek agreed to receive the ‘International Cultural Foundation Founder’s Award’ from Moon: The ‘intent of the award parallels that of the Nobel foundation.’21 The ICUS Executive Director implicitly proposed that Hayek’s published ‘Statement of Acceptance’ should correspond with Moonie mythology, one expression of which can be found in ‘Sun Myung Moon and the End of Soviet Communism’: ‘How different would the course of the Cold War, and more specifically the fate of Nicaragua, SDI, and the Reagan doctrine have been, had Rev. Moon’s educational and grassroots activities and The Washington Times never existed? Would this void have otherwise been filled? … Yet today he and the organizations which he founded do not appear in Western accounts of the demise of communism.’22 Hayek didn’t declare his Moonie Nobel Prize and became, not for the first time, under threat of prosecution for income-tax evasion (Cubitt 2006, 288). In 1985, de Borchgrave became editor-in-chief of the Moonies’ newspaper, The Washington Times. The Unification Church became a forum for cooperation between de Borchgrave and CIA Deputy Director, Ray Cline—who was on the Editorial Board of The World and I, the Moonies’ monthly, also edited by de Borchgrave. De Borchgrave was a former Board member of the Moonies’ US Global Strategy Council, chaired by Cline in the late 1980s. Cline and de Borchgrave also shared a platform with CIA Director, William Casey, as speakers at a special conference series on intelligence held at the Ashbrook Center, Ohio. Simultaneously, de Borchgrave was working with Moss and John Rees of the John Birch Society in a ‘risk analysis’ company, Mid-Atlantic Research Associates (Teacher 2018).

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According to Blumert (2010, 56): ‘On any libertarian journey, an encounter with the John Birch Society was inevitable.’ Rockwell (2010, 288) praised John Birch’s founder, Robert Welsh, for ‘harkening back to a praiseworthy Americanist impulse.’ Mises was intimately connected with the John Birch Society—of which Fred Koch was a founding member (Leeson 2018). According to David Koch, ‘Father was paranoid about communism’ (cited by Goldman 2010).

5 Strauss Strauss was eight years old when Ludendorff and Hitler launched their Bavarian Putsch; he became a member of the first Bundestag (Federal Parliament) (1949); Federal Minister for Special Affairs in Chancellor Konrad Adenauer’s second cabinet (1953), Federal Minister of Nuclear Energy (1955) and Defence Minister, authorized to build-up of the new West German defence forces, the Bundeswehr (1956); chairman of the Bavarian CSU (1961); Minister-President of Bavaria (1978–1988); and 1980 CSU/CDU Federal Presidential candidate. In 1980, Crozier used ‘unscrupulous methods’ to try and get Strauss elected as Chancellor. From February, Crozier planted pro-Strauss articles in Sir James Goldsmith’s magazine NOW! for which Crozier edited an entire section during the magazine’s short lifespan (Teacher 2018). The ‘Friedrich Naumann Stiftung’ funds Austrian School economists (Caplan 2010, 79). In 1980, Hayek told Cubitt (2006, 48) that ‘he wanted to help’ Strauss ‘to become Chancellor of Germany by discrediting the Liberal Party over the Friedrich-Naumann Stiftung, a liberalistic foundation devoted to public utility, whose founder, he claimed, had had connections with the National Socialists, that is, the Nazis.’ Like Mises, Friedrich Naumann was regarded as a classical liberal while also promoting National Socialism (Chapter 8, above). According to Caldwell (2010): ‘Hayek himself disdained having his ideas attached to either party.’23 And for contemporary public consumption, Hayek (1992 [1945], 223) described his unalterable opposition to Nazis—insisting in his ‘Plan for the Future of Germany’:

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Neither legal scruple nor a false humanitarianism should prevent the meeting out of full justice to the guilty individuals in Germany. There are thousands, probably tens of thousands, who fully deserve death; and never in history was it easier to find the guilty men. Rank in the Nazi party is almost certain indication of degree of guilt. All the Allies need to do is decide how many they are prepared to put to death. If they begin at the top of the Nazi hierarchy, it is certain that the number they will be shooting in cold blood will be smaller than the number that deserve it.

Even though Hayek avoided mentioning Austrians, he could not have been speaking truthfully—he would have been advocating the shooting in cold blood of most of his original family. Before his ‘Jewish looking’ brother, Heinrich, could have joined the Sturmabteilung (SA, Storm Detachment, Assault Division, or Brownshirts) he would have had to use the ‘Aryan’ family tree (such as the one constructed by his brother) to demonstrate that his family did not have Jewish roots. He was accepted in November 1933 and promoted to the rank of Scharführer (non-commissioned officer) in 1943. In March 1938, he joined the Nazi Party (member number 5518677) and served as Führer (1934– 1935) in the Kampfring der Deutsch-Österreicher im Reich (Hilfsbund ), an organization of German Austrians living in Germany that displayed a Swastika in its regalia (Hildebrandt 2013, 2016).

6 ‘Sir Jimmy’ Goldsmith and a ‘Europe of Fatherlands’ In addition to promoting ‘neo-fascists,’ Rothbard (1994, 10) objected to what he described as the ‘march’ toward the goal of one supranational Euro-government, to submerge all the ‘wonderful particular’ nationalities of Europe into a monstrous, denatured, statist, and cartelized ‘One Europe,’ dominated by one tyrannical, multicultural, multiethnic government, issuing one paper currency.

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This ‘horrendous Euro-ideal’ was precisely the ideal of our ‘New World Order left-liberals, neoconservative Mensheviks, and Rockefeller multinationals: that is, a super-One World Government built upon such regional Euro-governments’ as its building blocks. Hence, according to Rothbard, the enthusiasm with which the ‘U.S. liberal/centrist/neocon/ Official Con Establishment’ greets every step along the path to regional and ‘eventually, world government.’ This was confronted by ‘every fibre’ of the being of ‘every paleo’ which yearns to ‘disrupt, to block, to smash’ the march toward this World Government. Rothbard (1994, 10) welcomed what he hoped was a transformation in the opposition to ‘Eurocracy.’ Previously, this ‘great’ cause had been scattered, and confined to local and unorganised dissidents. But there was good news—the ‘formidable English billionaire,’ ‘Sir Jimmy’ Goldsmith, has devoted his energies into organizing a determined anti-Eurocracy movement—L’Aufre Europe (The Other Europe): Just as Pat Buchanan and the ‘paleos’ want to ‘Take America Back to restore the Old Republic,’ L’Aufre Europe is determined to ‘Take Europe Back’ to restore the Old Europe, what General de Gaulle called ‘L’Europe des patries (A Europe of Fatherlands).’ Six decades previously, Mises had joined the Austro-Fascist Vaterländische Front (Fatherland Front) (Hülsmann 2007, 677, n. 149). Guzmán was the co-author of Pinochet’s ‘Constitution of Liberty’ (Cristi 2017); and according to declassified documents, Guzmán was a founding member of Movimiento Civico Patria y Libertad (Fatherland and Liberty Civic Movement) the civilian wing of the neo-fascist Fatherland and Liberty organization which launched a coup in June 1973 (Guardiola-Rivera 2013, 195). Nixon—a participant in Crozier’s ‘International Right’ network (Teacher 2018)—outlined his ‘strategy of tension’: in their 15 September 1970 meeting with CIA Director, Richard Helms, and Attorney General, John Mitchell, President Nixon and his National Security Advisor, Henry Kissinger, directed the CIA to ‘prevent’ the democratically-elected Allende from taking office: They were ‘not concerned [about the] risks involved,’ according to Helms’ notes. In addition to political action, Nixon and Kissinger, according to Helms’s notes, ordered steps to ‘make the economy scream.’24

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Rothbard (1994, 10) praised Goldsmith’s German running mate, Manfred Brunner, leader of the Bund Freier Burger (the League of Free Burghers) who was associated with Haiders’ far-right Freiheitliche Partei Österreichs (Freedom Party of Austria, FPÖ). Rothbard also commended Goldsmith for aligning with the ‘conservative Catholic French politician,’ Philippe de Villiers, who claims to be descended from Philippe II, Duke of Orléans (1674–1723). De Villiers plans to build a theme park near Moscow devoted to Russia’s 1812 defeat of Napoleon’s army, plus another in Russian-annexed Crimea—despite European Union (EU) sanctions. After being officially received by Vladimir Putin, de Villiers told the press: ‘I am happy to have this opportunity to express my love for Russia … I would gladly swap Hollande and Sarkozy for Putin’ (Chazan 2014). De Villier’s partner, Konstantin Malofeev (who is blacklisted under EU sanctions for helping or supporting Russia’s annexation of Crimea) hosted a 200th anniversary celebration of the Congress of Vienna at which Putin was celebrated as a ‘Savior.’ According to an article titled ‘Summit with Putin’s fifth column,’ at this ‘Saint Basil the Great Charitable Foundation’ conference, nationalists, Christian fundamentalists, ‘aristocrats and entrepreneurs’ ‘discussed the salvation of Europe against Liberalism and gay lobbies’ (Odehnal 2014).

7 Roman Catholic Theocrats The Habsburg Pretender was Opus Dei’s candidate as monarch to rule over a united Catholic Europe (Teacher 2018). Hayek (1994, 41) felt that: If somebody really wanted religion, he had better stick to what seemed to me the ‘true article,’ that is Roman Catholicism. Protestantism always appeared me a step in the process of emancipation from a superstition—a step which, once taken, must lead to complete unbelief.

According to Rothbard (1994, 6, 9), the biggest weakness, apart from regional limits of the National Alliance (NA) has been its shaky relationship with the Catholic Church. NA’s leader, the divorced Umberto Bossi, was like ‘many’ Italian males only a ‘once and possibly future

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Catholic’ and was not a Catholic communicant. But in a ‘brilliant’ political masterstroke, Bossi ‘found and elevated’ the ‘brilliant’ and determined ‘young Catholic activist,’ Irene Pivetti, who is the League’s ‘Opening to the Church,’ and who was destined to be a superstar in Italian politics. She ran for Parliament in 1992 under the slogan: ‘Your spirit for God, your vote for the [Northern] League.’ Her nickname now is la Papessa (the ‘female Pope’) … friends regard her as the League’s Joan of Arc.

Pivetti (2001) reflected about the 1992 ‘deception’: I thought for Italy the time for a democratic revolution had arrived. It appeared as the eve of a great change. Afterwards I understood it was a deception. No reform occurred. Politics was meant to be closer to ordinary people, but this did not happen. I understood the Lega Nord (Northern political party fighting for the transformation of Italy into a confederation of three states) was the deception of the old system. I bought it, just like millions of Italians. Bossi (Head of the Lega Nord ) had said, ‘You take care of the Catholics.’ I thought the time of the Apocalypse had come.

Rothbard (1994, 6) used Pivetti to illustrate one of his pet themes: spurious charges of anti-Semitism: it was, he asserted, remarkable that in discussing politics in Europe, or indeed in the ‘entire world,’ the only issue that appears to exercise the American and Western media is the ‘Jewish Question,’ even in countries that contains hardly any Jews, and where Jews are ‘not’ an issue. Because Pivetti was a ‘traditional (that is, a genuine) Catholic,’ she denounced the ‘heretical’ act of Pope John Paul II in hailing Judaism as Christianity’s ‘elder brother,’ and elevating the Chief Rabbi of Italy to a status as exalted as himself. Ms. Pivetti declared that she ‘cannot regard a false religion as our ‘elder brother.’

The ‘media/secularist’s version’ of a ‘good’ Christian is a Christian who regards his religion as only one among a large number of coequals in

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some ‘ghastly egalitarian’ and ‘non-discriminatory’ spiritual ‘grab-bag, none better or truer than another’: After all, someone’s ‘feelings’ might get hurt otherwise. (Hey, where’s The Inquisition now that we need it?)

Bossi describes himself as ‘post-ideological’ and is ‘clearly very interested in power for its own sake’ (Tambini 2001, Chapter 6). In 2012, Bossi resigned as Lega Nord’s Federal Secretary following allegations ‘by prosecutors that taxpayers’ money earmarked for his party had been spent on improvements to his house and favours for members of his family. According to one report, these included the rental of a Porsche car for his eldest son.’ The Party’s treasurer, Francesco Belsito, was ‘formally under investigation on suspicion of money laundering, fraud and embezzlement’ (Hooper 2012). The following year, another of Rothbard’s Italian heroes of ‘liberty,’ Silvio Berlusconi, was convicted of tax-fraud.

Notes 1. MPS Archives Box 66. 2. Friedrich Hayek, interviewed by Robert Chitester date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 3. Friedrich Hayek, interviewed by Earlene Craver date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 4. http://www.holyromanempireassociation.com/imperial-nobility-of-germany.html. 5. http://www.holyromanempireassociation.com/charter-of-the-holy-roman-empire-association.html. 6. The Dutch Reform church sanctified apartheid: God had provided the Boers with black people to act as ‘hewers of wood and drawers of water.’ 7. ‘Deacon’ McCormick Papers. Sayer Collection. British Connection folder.

474     R. Leeson

8. https://history.fee.org/publications/conservative-spotlight-ludwigvon-mises-institute/. 9. http://www.heritage.org/about-heritage/mission. 10. Friedrich Hayek, interviewed by Jack High date unspecified 1978 (Centre for Oral History Research, University of California, Los Angeles, http://oralhistory.library.ucla.edu/). 11. https://jwpf.org/grants/. 12. http://jwpf.org/grants/focus-areas/education/. 13. http://www.donorstrust.org/. 14. http://www.donorstrust.org/news-notes/donorstrusts-new-ceo/. 15. https://jwpf.org/grants/. 16. http://www.peter-boettke.com/curriculum-vita/. Accessed 5 October 2017. 17. http://mercatus.org/all-people/1287. 18. https://twitter.com/BackOnTrackUSA/status/627842506269569024. 19. https://web.archive.org/web/20140808232251/http://hurun.net/EN/ HuList.aspx?nid=26. 20. Hayek Archives Box 9.6. 21. Hayek Archives Box 9.6. 22. http://www.tparents.org/Library/Unification/Publications/Causa/ Causa-05.htm. 23. ‘Even though Hayek himself disdained having his ideas attached to either party, he nonetheless provided arguments about the dangers of the unbridled growth of government’ (Caldwell 2010). 24. https://www.cia.gov/library/reports/general-reports-1/chile/.

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Index

A

Academia, politicization of Ebeling and 97, 106, 309, 315, 333–334 Friedman and 99–105 Habsburgs and 105–107 Hayek and 105–107 Hitler and 87–88, 315–316, 344 Mises and 87–92, 94, 97–98, 300, 305, 308–309, 314, 316, 322, 324–325, 327, 329, 333, 335–338, 341–344 overview 89–90 producer/consumer sovereignty 90–98 Active Dreaming 395–396 Agency theory 323 Ailes, Roger 25, 195 Al-Qaeda 70, 227, 264, 270 Archival Insights in the Evolution of Economics (AIEE) 35n25

Ascribed vs. achieved status 115–131 Atheism 9, 374–375, 383 Austrian Business Cycle Theory 93, 316, 327, 329 B

Bader, Lawson 464 Bartley, Robert 22, 24, 26, 28, 123, 137, 139 Bartley, William Warren III 4–5, 13, 16, 185–187, 204, 331 Beck, Glenn 18, 267–268, 272–273 Becker, Gary 29, 136, 146, 262, 380 Beckerath, Herbert von 189 Beckett, Andy 129 Beddal, W. S. 6 Bellamy, Edward 129 Bellant, Russ 226 Beveridge, William 16, 192, 219, 233 Bhatt, M. P. 196

© The Editor(s) (if applicable) and The Author(s) 2018 R. Leeson, Hayek: A Collaborative Biography, Archival Insights into the Evolution of Economics, https://doi.org/10.1007/978-3-319-77428-2

535

536     Index

Bird, Kai 48 Block, Walter 12, 18, 192, 195, 214, 325, 361 Blundell, John 4, 161, 181, 193, 212 Boettke, Peter ‘Case for Ordinary Economics,’ 465–466 Cordato and 3 on free market 266, 321–322, 328, 360, 437 GMU professorship 69, 91, 100, 149–152, 212, 270, 275, 336, 412 GMU studies 315–317 Hayek and 17–19, 133, 264, 269 on inflation 405 Kibbe and 268, 271 Mises and 53–55, 57, 62, 105, 134 MPS and 2, 137–138, 161, 221 Presuppositionalism and 197, 313–314 Rand and 100 Review of Austrian Economics 11 Tabarrok and 3 view of economic historians 47 Böhm-Bawerk, Eugen 1, 201, 269–270, 330, 375 Bostaph, Samuel 358 Bremer, J. Paul 69 Bretton Woods 102, 284 British neoclassical theory 31, 116– 118, 197. See also Neoclassical theory of economics British Union of Fascists 399 Brown & Williamson Tobacco Corporation 142 Brown University 47, 52

Brown v. Board of Education 45 Brown, Floyd 416 Brown, Jerry 335 Browner, Carol 308 Brunner, Karl 233 Brunner, Manfred 471 Buchanan, James Boettke and 221 Ebeling and 192 faith-based ‘knowledge’ vs. education 136 Hayek and 21–22, 191, 229, 269, 313, 412 human rights and 45, 72 King George III and 421 Koch brothers and 318 Koether and 337 Mises and 384, 421 MPS and 29, 196, 454 Presuppositionalism and 197 unions and 150 Ware and 274 Buchanan, Pat 101, 183, 470 Buckley, William Jr. 24, 130, 151, 153, 155–157, 188, 198, 269, 358, 432, 463 Bush, George H. W. 48, 428 Bush, George W. 132, 264, 274, 285, 462 Butler, Samuel 129 C

Cáceres, Carlos 200, 230, 234, 276–281 ‘Cadre’ development 331–344 Caldwell, Bruce Allende and 237

Index     537

CEP and 49–50 Collected Works of F.A. Hayek 54, 57, 70, 216, 225, 366, 434 Duke University and 137 Ebeling and 225 Hayek and 11, 13–14, 16–18, 47, 50–54, 202, 229, 241, 272, 468 Hayek’s Challenge 463 Institutional Biography of F.A. Hayek 11 Kresge and 186 Mises and 63 Montes and 49, 57, 65, 199, 231, 278–283 MPS and 238, 275 Pinochet and 235 Thomas Smith Foundation 127 Carter, Jimmy 13, 47, 57, 235 Casey, William 27, 47–48, 141, 274, 467 Catholic Church. See Roman Catholic theocrats Cato Institute 138–139, 143–144, 151, 183, 209–210, 309, 312, 319–320, 323–324, 326–327, 396 Cato Policy Report 90, 93, 116, 151, 126–127, 158, 283, 412 Center of Public Studies (CEP) 49–50 CFACT lobby 271 Chamberlain, John 3, 90, 158–159, 183, 198, 230–231, 233, 235–238, 276–277, 282, 360, 379, 459 Cheney, Dick 117

Chicago School of Economics 5, 9, 11, 101, 151, 376–377 Childers, Erskine 397–398 Civil Rights Act (1964) 20, 71, 123 Civil War (Guatemala) 146 Civil War (US) 75, 361, 458 Classical liberalism 47, 55, 59–63, 67, 121, 143, 306, 326 Case for Classical Liberalism 285 Ebeling and 193 Feulner and 187–188 Mises and 368–369 MPS and 377 Clean Water Act 308 Clinton, Bill 262, 305 Cold War 18, 27, 33, 197, 201, 226, 272, 395–403, 459, 467 Comprehensive Anti-Apartheid Act (1986) 235 Confederate States of America 235, 246n113. See also Civil War (US) Confederation of British Industry 128 Congress for Cultural Freedom (CCF) 400 Conway, David 143 Conway, Erik 97 Conway, Kellyanne 438 Cordato, Roy 3, 9, 46, 102 Cornuelle, Herbert C. 5, 133 Cornuelle, Richard 11, 134–135, 225, 337, 342 Cornwell, John 88 Crozier, Brian 3, 23, 34, 197–200, 237, 282, 459, 468, 470

538     Index

Cubitt, Charlotte 4, 10, 14, 16, 51, 68, 115, 126–127, 186, 282, 374, 403, 420, 462, 468 D

D’Amato, Alphonse 264 Darden, Colgate Whitehead Jr. 45 D’Souza, Dinesh 66–67 Davenport, John 3, 22, 90, 118– 119, 147, 149–150, 156, 221, 235, 290–291, 301, 303–304, 309, 375, 377, 397, 406, 415, 418–420, 456 Davis, James 318 Davis, Shelby C. 463 De La Beck, Byron 195 Deacon, Richard. See McCormick, Donald ‘Deacon’ Deflation 9, 33, 56, 87, 94, 99, 128, 154, 184, 199, 217, 235, 261, 321–322, 329, 359, 404–412, 422, 425–427, 430, 432 DeMille, Cecil B. 227 Disney, Walt 13–15, 17–18, 25, 57, 74, 312 Duke University 35n25, 47, 137, 218, 225, 316, 418, 463 E

Ebeling, Richard academia and 97, 106, 309, 315, 333–334 Austrian School and 46, 435 ‘Before Modern Collectivism,’ 193–194 Boettke and 150, 275, 465 Caldwell and 22, 54–55, 225

Christianity and 358, 383 Citadel Military College and 62–63, 143, 276, 301 classical liberalism and 193 CLS and 140–143 education 97, 142–143 FEE and 3, 150–152 on ‘free’ market state 7–8, 143–144 Hayek and 55, 120, 234 Leube and 146 McCormick and 192 Mises and 140, 275 MPS and 3–4, 186, 265 NPR and 88, 195 on post-Communist Russia 191–192 Skousen and 153 on special interest groups 132 Ebenstein, Alan 52 Emperor Francis II 454 Environmental Protection Agency (EPA) 96, 308, 465 Epstein, Gene 185, 287, 329 Euphoria, economic consequences of 73–76 European Documentation and Information Centre 29, 283. See also Habsburgs European Union 218, 220, 352 Externalities 9, 29, 69, 75, 99–100, 118, 121, 123, 152, 197, 304 F

Fair Labor Standards Act (1938) 69 Faith-based ‘knowledge’ vs. education 131–137 Family Smoking Prevention and Tobacco Control Act (2009) 300

Index     539

Federal Reserve Allison and 327 Austrian School of Economics and 330, 340 bailouts 262 Burns and 31, 135 Bush and 285 Glass-Steagal and 302 Greenspan and 31–32, 74, 156, 208 Hayek and 410 Mishkin and 285 MPS and 284 Nixon and 23 Quantitative Easing and 417 Reagan and 302 Wallich and 284 Feldstein, Martin 31, 208, 284 Ferdinand, Franz 460 Feulner, Edwin Jr. 3, 6, 22, 24, 27–29, 31, 120, 140, 146, 181, 186–187, 199, 223, 230, 273, 285, 316, 380, 419 Finer, Herman 214 Finer, Samuel 229 Fisher, Anthony 3, 6, 10, 47, 89, 121, 129, 141, 148, 193 Fisher, H. A. L. 399 Fisher, Richard 274, 284, 312, 397 Fisher, Stanley 28 Forbes, Malcolm 22 Forbes, Steve 271 Ford, Gerald 208, 310 Ford, Henry 312, 433 Fossil fuels 463–466 Foundation of Economic Education (FEE) 2, 5, 8, 10, 47, 133– 134, 137, 151–152, 156,

158–159, 161, 205, 306, 322, 325, 333, 364, 377–378 Fourier, Charles 129, 206 Fox News 25, 27, 67, 195, 267, 462 Francis, Samuel 158 Frankfurther Allgemeine Zeitung 22, 24 ‘Free and humane’ markets 299–304 Friedman, Milton ‘Social Responsibility of Business,’ 183 American Enterprise Institute and 199 Boettke and 149, 437 Chicago School and 5, 64, 282 Davenport and 221, 309 economic theories 99–105 family history 194–195 Greenspan and 284 Harris and 136 Hayek and 410, 414 Hoover Institution and 149 Hoppe and 339 involvement in political process 7, 416–419 MPS and 7–8, 10, 28, 183, 223, 376–377, 416–417 Nobel Prize 416 Pinochet and 199 Stigler and 7, 233–234 G

Garn-St. Germain Depository Institutions Act (1982) 71 Gascoyne-Cecil, Robert Arthur Talbot 228 Geithner, Timothy 263

540     Index

General Strike 411 Gibson, Martin 27 Gideonse, Harry D. 5 Gladstone, William Ewart 104, 115–116, 119, 123, 125, 239 Glass-Steagall Act (1933) 73, 100, 262, 302 Global Warming Policy Foundation 241, 247 Goldsmith ‘Sir Jimmy,’ 469–471 Gorbachev, Mikhail 397 Gordon, Lincoln 87 Gordon, Richard L. 325 Gramm-Leach-Billey Act (1999) 262. See also Glass-Steagall Act Great Depression 7–8, 26, 56, 63, 105, 154, 217, 219, 272, 288, 302, 405–406, 411–412, 417, 426–429, 431 Greenspan, Alan 30–32, 74, 76, 156–157, 207–208, 262–263, 273, 284, 286, 302 H

Habsburgs 453–462, 471 American universities and 306, 316, 332 aristocracy and 405 ascribed vs. achieved status 115, 123 Christianity and 367, 370 economic turmoil and 105 entitlement program 56, 60 European Documentation and Information Centre 29, 283 Friedman and 417–418 Hayek and 13, 275, 420–421 International Right and 197–198, 201

Mises and 105–107, 306 MPS and 5–7, 29, 105–106, 222 Otto the Habsburg Pretender 33, 185, 197–198, 273, 413, 415, 471 political influence 33–34 trade unions and 155 Wilson and 235 World War I and 55, 60 World War II and 414 Hamilius, Jean-Pierre 45–46 Hamowy, Ronald 2, 4, 54–55, 135, 415 Hannity, Sean 462 Harmsworth, Esmond Cecil 228 Harper, F. A. ‘Baldy’ 3, 5, 160, 162, 189, 193, 312, 375 Harris, Ralph 3, 128–129, 136, 181, 196, 272, 283 Hartwell, Max 4 Hartwell, R. M. 134, 146 Hayek, Friedrich von academia and 105–107 Boettke and 17–19, 133, 264, 269 Buchanan and 21–22, 191, 229, 269, 313, 412 Caldwell and 11, 13–14, 16–18, 47, 50–54, 202, 229, 241, 272, 468 Ebeling and 55, 120, 234 Federal Reserve and 410 Friedman and 410, 414 Habsburgs and 13, 275, 420–421 Hayek-Fink-Koch ‘knowledge’ production line 304–331 Hitler and 14, 17, 67–68, 154, 408–409, 457, 462

Index     541

Law, Legislation, and Liberty 69, 118, 200, 281–282, 343, 420 Hazlit, Henry 3, 22, 46, 139, 189, 204, 322, 366–367, 379, 417 Heritage Foundation 3, 31, 34, 67, 72, 97, 140, 187, 193, 316, 397, 415, 462–464 Hindenburg, Paul 409 Hitler, Adolf academia and 87–88, 315–316, 344 Austrian Business Cycle Theory and 316, 327 Christianity and 368, 370–371, 374, 379 defeat 116, 155 deflation and 184, 199, 403, 412, 423 ‘free’ market and 264, 275, 278, 280, 288 Friedman and 99, 102 Great Depression and 427 Habsburgs and 106 Hayek and 14, 17, 67–68, 154, 408–409, 457, 462 impact of ideology 214–216, 220, 229, 232–233, 457 International Right and 155 Mein Kampf 190 Mises and 5, 33, 53, 187, 190, 220, 403 Naumann and 368 producer sovereignty and 94 rise to power 8, 33, 56, 60–61, 122, 128, 154, 184, 198–199, 322, 403, 412, 431–432 Rothermere and 399–400 Strauss and 468

Hoover Institution 149, 151, 220, 223, 226, 278 Hoover, Herbert 17, 35n25, 154, 157, 204–205, 220 Hoover, J. Edgar 227, 267 Hoppe, Hans-Hermann 18, 48–49, 59, 71–72, 74–75, 104, 338–339 Hülsmann, Guido 2, 45–46, 48, 144, 189–190, 195, 206, 222, 324, 334, 368, 371–374, 376, 378–379, 383, 385, 460 Human Action (Mises) 48–49, 103, 144, 195, 238, 309, 327, 358, 372 Human rights 45–73 I

Ibañez, Pedro 230, 279–281 Inflation 23–24, 92–94, 102, 118, 120, 144, 155, 199, 235–236, 283, 304, 322, 373, 383, 405, 408, 410, 427–430 Great Inflation 274, 284 hyperinflation 426 Intergenerational entitlements 32, 56, 60, 94, 228, 370, 454 Iron Law of Oligarchy 32, 265–266 Italian fascism 21, 305–330, 318– 319, 321–322, 326–330 J

Jefferson, Thomas 422 John Birch Society 466-468 John W. Pope Foundation 463–465 Johnson, James 27

542     Index

Johnson, Lyndon B. 90 Johnson, Manuel 262, 301–302 Johnson, Paul Bede 147 Jones, Homer 31, 208 Journalists ‘free’ environmental market and 1–34 Junta Militar Act (1973) 231

Koch brothers 5–6, 28, 35–38, 40, 43, 196, 200–202, 205, 275–277, 342 Koether, George 3, 28, 53, 60, 121, 226, 337, 423 Kohl, Helmut 209 Köhler, Horst 128 Krugman, Paul 8, 89 Ku Klux Klan 71, 94, 122, 195, 271

K

Keating, Charles 74, 156, 210 Kemp, Jack 212 Kennedy, John F. 213, 359 Kershner, Howard 6 Keynes, John Maynard Allison and 327 American universities and 327–329, 336, 338 blind faith 62, 71 Bottke and 62, 314 Bretton Woods and 102 British neoclassical theory and 118 Brunner and 233 on capitalism 464 Christianity and 381, 383, 386 Ebeling and 7–8 General Strike and 411 General Theory 30, 403 Hayek and 158–159, 219–219, 403–404, 418 Mises and 23 MPS and 23 Pinochet and 238 Robbins and 218–219 Utopian Truth and 261, 282 King, Martin Luther 124 Knight, Frank 5, 218, 375–376, 378–379, 417

L

Labour unions 44, 68, 77–80, 85–88, 125, 158–160, 181, 223, 240, 244, 270, 323 Laffer, Arthur 117, 331, 377 Lal, Deepak 105, 118, 285–286 Law & Economics Center 206 Law of Power, The (Wieser) 222 Law on the Abolition of Nobility 55, 459 Law, Legislation, and Liberty (Hayek) 69, 118, 200, 281–282, 343, 420 Lenin, Vladimir Le Queux, Tufnell 398 Leube, Kurt 3–4, 13, 16, 18, 47, 60, 133, 137, 145–146, 181, 185, 198–199, 275, 336, 404, 415 Liggio, Leonard 3, 146, 284, 307 Limbaugh, Rush 27 Lincoln Savings and Loan 74, 156 Lincoln, Abraham 234, 458 Louw, Leon 271 M

MacBride, Roger 310 MacDonald, Ramsay 402, 406 Machan, Tibor 210

Index     543

Machlup, Fritz 5, 134, 188–189, 217, 228, 366 MacLean, Nancy 45, 138 Maddison, Angus 414 Martin, Preston 302 Martino, Antonio 28, 72, 146 Marxism 99, 103, 129, 188–189, 207, 237–238, 269, 307, 315, 330, 338, 368, 381 Mayer, Hans 1, 190, 270 Mayer, Jane 162, 307 McCarthy, Joseph 157–158, 224, 305 McCarty, John 135 McCormick, Donald ‘Deacon’ on Americans 192 British Connection 192 on British Empire 456–457 on Christianity 328 Cold War and 397 faction 395 Hamillius and 45–46 Hayek and 15–16 IRD and 401 John Birch Society and 466–467 McCarthy and 158 on morals 211 MPS and 3 North and 328, 381 Pigou and 165n25 Rothbard and 158, 381 Skousen and 153 Taken for a Ride 126 Truth Twisters 401 World War I and 398 McCracken, Paul 208, 274, 284 Mellon, Andrew 154–155, 463 Menger, Carl 1, 68, 201–202, 223, 263, 270, 338, 367

Milken, Michael 156 Mises, Ludwig von academia and 87–92, 94, 97–98, 300, 305, 308–309, 314, 316, 322, 324–325, 327, 329, 333, 335–338, 341–344 Austrian School of Economics and 1, 12–13 Boettke and 53–55, 57, 62, 91, 105, 134 British neoclassical theory and 115–116, 118 Christianity and 32, 161, 224, 358–359, 361, 363–386 Cold War and 201 ‘conspiratorial silence’ and 45–67, 70, 72 Ebeling and 193 economic euphoria 73–74 faith-based knowledge and 131, 133–134 fascism and 23, 26, 32–33, 122, 190–193, 199 feminism and 213 on fiction 19 Fourier and 129 ‘free’ market economics 99–105, 455–462, 466, 468, 470 Habsburgs and 105–107 Hazlitt and 204 Hitler and 220, 232 knowledge construction and dissemination 400, 402–406, 409, 411–412, 416, 421–424, 426, 428, 430–432, 434, 436–437 lasting influence of 139–140, 143–144, 152, 184–188, 197, 238, 300

544     Index

LSE and 219 Memoirs 191, 206 Menger and 203 morals of the market and 219– 222, 224, 226, 228 MPS and 2–7, 9, 23–24, 128, 186–187, 198 principles 206–207 Rand and 210 Read and 214 relationship with universities 189–190 Rothbard and 184 on Soviet Union 4 Sozialismus 214 Spiritual Mobilization and 205 Utopian Truth and 261–266, 269–271, 275, 278, 280, 286–288 Volker Fund and 160 Mishkin, Frederic 221, 263, 285 Monday Club 29 Mont Pelerin Society (MPS) Boettke and 2, 137–138, 161, 221 business dealings 303, 305, 310, 316 cadre development and 331, 333 Christianity and 359, 366, 375–377, 379–381 ‘conspiratorial silence’ and 45–46, 64 doctrine 181–187, 196–199, 202, 205, 210, 215–217, 220–235, 238–239 founding of 87 free market aims 120, 122, 127–130, 133–137

free market euphoria 262, 265, 267–268, 272–276, 278, 280, 282–286 Friedman and 99, 105 Greenspan and 74 Habsburgs and 105–106 history 4–11, 14, 16, 21–32 international meetings 72 journalists and 21–25, 27–29, 89–90 members 2–6, 21–25, 96, 133, 208, 454, 457, 459 Peterson and 89 propaganda 396, 401–402, 414–419, 423, 428, 433 Rothbard and 72 Statement of Aims 31 taxes and 92 trade unions and 138, 140–146, 148, 150, 155–156, 158 Moonies 468–470 Mosaic law 161 Moss, Laurence 337 Moss, Robert 3, 23, 46, 198, 200, 236–237, 395–396, 459, 467 Murdoch, Rupert 25, 47, 128, 141, 195 Mussolini, Alessandra 213 Mussolini, Benito 213, 241, 370 N

National Public Radio (NPR) 88, 195 Neoclassical theory of economics 31, 76, 99, 101, 106, 116. See also British neoclassical theory Ayau and 241

Index     545

Caldwell and 275 labour and 407 ‘licentiousness’ and 386 principles of 219 New Deal 157 Nixon, Richard 23, 90, 124, 196, 207–208, 210, 227, 229, 238–239, 310, 378, 397, 432–433, 470 Nonprofit organizations 311, 323–324 North, Douglas 262 North, Gary 3, 71, 123, 131, 144, 160–161, 189, 195, 227–228, 270, 314–315, 328, 362, 378, 381 Northern League 212, 472 Nymeyer, Frederick 2, 134, 147, 161, 224–225, 364, 366, 369, 374 O

Obama, Barack 94, 97, 209, 267–268 Opus Dei 33, 471 Orwell, George 4, 15, 33, 126, 146, 195, 262, 307, 312, 425, 436, 438 Otto the Habsburg Pretender 33, 185, 197–198, 273, 413, 415, 471. See also Habsburgs P

Palmer, Roundell Cecil 228 Pareto efficiency 117 improvements 117

optimality 49, 117 paralysis 99, 117 Paul, Rand 300 Paul, Ron 59, 288, 300 Peterson, William H. 3, 89, 150 Pigou, A. C. 15, 31, 100, 118, 121, 124, 152–154, 197, 211, 306, 312, 314, 344, 401, 411 Piketty, Thomas 422 Pinochet, Augusto 22, 31, 56, 61, 99, 136, 146, 198–201, 229–231, 234–240, 279–282, 434, 470 Pollio, Alberto 48 Pope Francis 454 Pope John Paul II 187, 472 Pope Pius XII 88 Presuppositionalism 3, 69, 161, 197, 313–314, 328, 360, 362, 364, 374, 466 Propaganda 395–438 Proudfoot, William 283 Putin, Vladimir 3, 32, 100, 106, 191, 265–266, 478 Q

Quantitative Easing (QE) 417 R

Raico, Ralph 2, 4, 71, 195, 368–370 Rand, Ayn 12, 14–16, 18–19, 94, 99, 102, 104, 116, 125, 157, 181–183, 208–210, 224, 270, 272, 282, 286, 322, 327, 358–360, 385, 405, 418, 436–437, 457

546     Index

Reagan, Ronald 27–28, 31, 47–48, 73, 89, 140–141, 198–199, 208–209, 214, 220, 235–236, 272–275, 284, 301–302, 326, 377, 379, 397, 418–419, 424, 428, 459, 463, 467 Rees-Mogg, William 221, 401, 467 Reisman, George 2, 188, 201, 341, 378 Renooij, D.C. 226 Review of Austrian Economics 11, 39, 67 Rickenbacker, William 383 Rippon, Geoffrey Lord 29 Road to Serfdom (Hayek) 14, 18, 56, 64–65, 126–127, 154, 184, 192, 200, 214, 233, 238, 272, 282, 404, 409, 413, 420, 425, 435, 457 Robbins, Lionel 5, 217–220, 228, 367, 371, 404, 408, 411–412 Robinson, Jackie 194 Roche, George 2, 186, 210, 381 Roche, Lissa Jackson 146, 382 Rockefeller, David 455, 470 Rockwell, Llewelyn Jr. 2, 10, 71, 97–98, 139, 152, 188–189, 299–300, 337, 344, 367, 376, 433, 458–459, 468 Roman Catholic theocrats 471–473 Ron Paul Newsletters 71, 188 Roosevelt, Franklin D. 460 Rosenbaum, Zinovy 104 Rosenberg, Julius 226 Rosenberg, Wilhelm 373 Rothbard, Joey 359 Rothbard, Murray. See also ‘We want externalities’ chants

American universities and 306, 319, 323–325, 329, 333–335, 337–338, 341–344 Austrian School and 2, 12 Catholic Church and 471–473 Cato Institute and 151 Christianity and 381–383 CLS and 140 ‘conspiratorial silence’ and 46–47 on corruption 157 fascism and 469–471 FEE and 159–162 on fiction 182–183 ‘free’ market Truth 12, 70–71 human rights and 59 ‘In Defense of Demagogues,’ 437–438 influence 98 Koch brothers and 144, 309, 319 ‘Market Holds Key to Conservation,’ 75 McCormick and 158, 381 Mises and 4 morality of the market and 182– 185, 188–189, 192, 194–195, 201, 205, 207, 211–213, 226 MPS and 72 ‘Myth and Truth About Libertarianism,’ 162 Nobel Prize Selection Committee and 29 Raico and 71 Rand and 104, 116 Rockwell and 139 on the State 430 Strictly Confidential 45 Sublett and 382

Index     547

Utopian Truth and 263–265, 270, 286–287 Volker Fund and 160, 162 Williams Act and 156 Rule of Law 217 Rumsfeld, Donald 69, 117 Ryan, Frank 398 Ryan, Paul 283 S

Samuel, Peter 22 Samuelson, Paul 68, 238, 282, 309 Saturday Night Massacre 124, 229, 433 Scaife family, charitable works 45, 96, 134, 139–140, 463 Schumpeter, Joseph 1, 71, 189, 420, 422 SEC Act (1935) 156 Seldon, Arthur 3, 10, 23, 129, 181, 216, 226, 272, 283, 322 Sennholz, Hans 9, 30, 38, 83, 284 Seven Years’ War 113 Shenfield, Arthur 3, 128–130, 158, 283–284, 381, 433, 457–458 Shenoy, Sudha 3–4, 13, 17, 22–23, 47, 67, 75, 122, 133, 137– 138, 185–186, 195, 203, 212, 228, 315, 336, 396, 538 Shkreli, Martin 144, 416 Skousen, Mark 3, 151–154, 156, 163, 228, 268, 272, 381 Skousen, W. Cleon 226–228, 267–268 Slavery 292 Smith, Adam 91–92, 99, 107n7, 130, 221, 286, 313, 324, 416, 419, 437

Smith, Ian 235, 286, 457–458 Smith, Jerome 341 Smith, Joseph 272 Smith, Robert J. 48 Somary, Felix 201 Soviet Union 4, 8, 32, 191, 261, 264–266 Spann, Othmar 1, 68, 190, 215, 231, 370–371 Spiritual Mobilization 159, 205 Stagflation 23 Stigler, George 5, 7, 10, 100, 158, 184, 377–378, 416–417, 419 Strauss, Franz-Josef 34, 60, 198, 453, 460, 468–469 Sublett, Scott 382 T

Tabarrok, Alexander 3, 103 Tea Party 2, 11, 32, 120, 271, 283, 300, 307, 313 Terrell, Timothy 2, 361–363 Thatcher, Margaret 17, 92–93, 128–129, 141, 198, 205–206, 209, 274–275, 278, 283, 416, 418, 423 Tobacco industry 25, 32, 74, 91, 96–98, 100–101, 107, 117, 139–142, 299–300, 303, 309, 321, 338 Trade Disputes Act (1906) 200 Trade unions. See Unions Trilling, Lionel 156 Truman, Harry 19, 275 Trump, Donald 11, 24–25, 89, 94– 98, 106, 136, 153, 209–210, 279, 300, 304, 317–318, 327, 438, 462

548     Index

Trump, Fred 122, 196, 280

Van Til, Cornelius 160–161, 362 Volker Fund 5, 133, 159, 160, 163, 324 Volker, William 133, 215 Voting Rights Act (1965) 69, 130

White supremacism 90, 235, 276, 287, 456 White, Lawrence 56 Wieser, Friedrich Freiherr von 6–8, 10–11, 75, 92–93, 112, 348–349 Williams Act (1968) 156 Williams, Walter E. 196, 304 Wilson, Harold 457 Wilson, Woodrow 235, 460 Wittgenstein, Ludwig 198, 215 Woolf, Virginia 406 World War I 5–6, 55–56, 222, 332, 367, 369, 371, 381, 397–399, 406, 418, 453–454, 460 World War II 128, 400, 409, 423, 460

W

Y

Wagner Act (1935) 154 War of Independence (US) 332–333, 414 War on Technology 47, 141 Ware, Richard 134, 196, 274, 433 Warfare State 48–49 ‘We want externalities’ chants 29, 75, 99, 192, 211, 265. See also Rothbard, Murray

Yeager, Leland 137–138

U

Unions 10, 13, 61, 65, 92, 94, 102, 129, 137–163, 197, 200, 205, 234, 277–278, 369 Utopian Truth 261–288 V

Z

Zimmerman Telegram 460 Zuckerberg, Mark 151 Zucman, Gabriel 422 Zuma, Jacob 334