Organizations and Markets

| Peter Klein |

Rafe Champion points out that Ludwig von Mises and Karl Popper, despite a shared commitment to classical liberalism and joint membership in the Mont Pelerin society, then the premier scholarly association of free-market intellectuals, didn’t get along. Mises and Popper were miles apart, epistemologically, and neither was enamored of the other’s work. Still, their relationship is interesting and worthy of further study. (Hayek of course was deeply influenced by both men.)

Unfortunately, in the comments to Rafe’s post the subject of Mises’s alleged “intolerance” rares its ugly head. A commentator refers to the story, repeated ad nauseam by Milton Friedman, that Mises once stormed out of a session of the Mont Pelerin society, shouting “You’re all a bunch of socialists!” The inference is that anyone making such a statement in a room full of distinguished non-socialists (Friedman, Stigler, Robbins, Knight) must be an extremist, a crank, or both.

In context, however, Mises’s actions that day were hardly extraordinary. The panelists were discussing income distribution. We don’t have a transcript, but a plausible scenario is that Friedman was pushing his “negative income tax” as an anti-poverty measure, while Knight, Robbins, and others argued for conventional welfare programs. (Even Hayek, often regarded as an extreme liberal — i.e., libertarian — favored minimum-wage laws, maximum-hours laws, public works projects, government-provided unemployment insurance, and the like. See pp. 112ff of Hayek on Hayek.) One can easily imagine Mises, who strongly opposed all government welfare programs, becoming frustrated and losing his temper. How this demonstrates “intolerance” is a mystery to me.

Incidentally, Mises’s former students uniformly describe him as gentle, kind, and encouraging, even to the least promising of them. (By contrast, many of Mises’s contemporaries were described as distant and aloof.)

NB: I once took a little dig at Friedman’s self-proclaimed “tolerance” here.