Friday, September 28, 2012

Part 1 Some Preliminary Research on the Mises-Rockefeller Foundation Funding

On the Ludwig von Mises webpage, one can find a few posts discussing the historical fact that Ludwig von Mises did, in fact, receive funding from the Rockefeller Foundation. My curiosity regarding the funding of Mises was aroused when I stumbled across the post entitled WTF Rockefeller funded Mises? I have been thinking about this for some time because this funding arrangement seems really odd to me. Why on earth would the Rockefeller Foundation show any interest in Mises? In the introduction to Murray N. Rothbard's A History of Money and Banking in the United States: The Colonial Era to World War II, Joseph T. Salerno raises an important point. He notes that "the question of 'Cui bono?'--or 'Who benefits?'--from changes in policies and institutions receives very little attention." This has been precisely the question I have been asking myself for some time: how did the Rockefeller Foundation benefit (if at all) from funding Ludwig von Mises? What were their motives for funding him? Moreover, how does Mises benefit (if at all) from receiving Rockefeller Foundation support? Actually I have a number of unanswered questions such as the following:
  1. Could the motive for funding Mises be to advance an imperialist agenda, which would probably be beneficial to the Rockefellers? The reason I put this forward as a possibility is because of three fascinating (at least to me) quotations. One is by Hans-Hermann Hoppe in his article The Paradox of Imperialism, and another is by Samuel Edward Konkin III who is quoted by Wally Conger in the essay entitled Agorist Class Theory: A Left Libertarian Approach to Class Conflict Analysis.  The third is by Gary North in his article EUthanasia. 
    1. Hoppe mentions that internal or domestic liberalism in states such as the United States of America--remember Mises was a strong advocate for classical liberalism--is the breeding ground for external imperalism.  Conversely, the internal or domestic repression of states such as the former Soviet Union is the breeding ground of just the opposite foreign policy, namely, a peaceful foreign policy. Let me quote Hoppe at length because it seems to suggest that a motive for funding domestic liberalism is to advance foreign imperalism.
      1. "Other things being equal, the lower the tax and regulation burden imposed on the domestic economy, the larger the population will tend to grow and the larger the amount of domestically produced wealth on which the state can draw in its conflicts with neighboring competitors. That is, states which tax and regulate their economies comparatively little--liberal states--tend to defeat and expand their territories or their range of hegemonic control at the expense of less-liberal ones. This explains, for instance, why Western Europe came to dominate the rest of the world rather than the other way around. More specifically, it explains why it was first the Dutch, then the British and finally, in the 20th century, the United States, that became the dominant imperial power, and why the United States, internally one of the most liberal states, has conducted the most aggressive foreign policy, while the former Soviet Union, for instance, with its illiberal (repressive) domestic policies has engaged in a comparatively peaceful and cautious foreign policy.
    2. Konkin also comes out, more directly than Hoppe did, and says that liberalism is a trick of the ruling class. Konkin basically sees liberalism in the same way that Hoppe does, namely, that liberalism is just a more efficient way of feeding the state apparatus. I want to also cite Konkin at length because he seems this internal "skimming" process going on with classical liberalism. Konkin is effectively saying that the classical liberalism advocated for by Mises is purely statism. From Roderick T Long, the State is the cause of the ruling class. Long writes in his article Can We Escape the Ruling Class? that "economic analysis suggests that the ruling class is primarily a creation of the state and not vice sersa." Hence, the ruling class is inherently statist; the ruling class has a motive to keep the state in existence. Since Mises's liberalism is statist as well, then Mises poses no threat to the ruling class when he advocates for classical liberalism.
      1. "Remember, the liberal statists want to restrain the State to increase the production of the host to maximize eventual parasitism. They 'control their appetites' but continue the system of plunder. The recent political example of supply-side economics starkly illustrates the basic statist nature of such ideas: the tax rate is lowered in order to encourage greater economic production and thus a greater total tax collection in the long run."
    3. North mentions in his article, EUthanasia, that Raymond Fosdick, who wrote the important book The Story of the Rockefeller Foundation and who was definitely a long-time Rockefeller "insider," approached Mises supposedly for the purpose of advancing the cause of "free trade." I suspect that "free trade" is being used euphemistically to mean "mercantilism." This is the same problem with modern "free trade" agreements such as NAFTA. They pretend to be about "free trade" when, in fact, they are really about its opposite. This is what I like to think of as the "bait-and-switch" problem with these alleged "free trade" agreements. Moreover, maybe by "free trade" they are really talking about some sort of "imperialism" in the sense of using the United States government to "open up" foreign markets. This was the argument used to justify imperialism in the 19th century and reported upon by Murray N. Rothbard in his book The Origins of the Federal Reserve. Rothbard notes that the imperialists of the late 19th century dressed up imperialism as "free trade" or as "opening up new markets." Rothbard writes that "By the late 1890s, groups of theoreticians in the United States were working on what would later be called the 'Leninist' theory of capitalist imperialism....To save advanced capitalism, it was necessary for Western governments to engage in outright imperialist or neo-imperialist ventures, which would force other countries to open their markets for American products and would force open investment opportunities abroad" (emphasis added). Gary North's important quotation is as follows.
      1. "Raymond Fosdick was a long-term strategist. In the 1940s, he financed the best free market economists he could locate to promote the ideal of free trade. Ludwig von Mises and his disciple Wilhelm Roepke each published a book that had been financed by the Rockefeller Foundation. [Given the 1940s date and the Rockefeller funding, my best guess is that Gary North is alluding to Mises's Omnipotent Government: The Rise of the Total State and Total War, published in 1944 originally and admittedly funded by "the Rockefeller Foundation and...the National Bureau of Economic Research."] Yet neither of them believed in setting up a world government. This did not bother Fosdick. He and [Jean] Monnet adopted the same strategy: first free trade [or maybe bait and switch by telling the public you want free trade but then implementing "managed" or "rigged" trade, but that is my guess], then the creation of a regional government that possess judicial sovereignty. This plan has been systematically promoted by the Trilateral Commission, created in 1973 by John D. Rockefeller, Jr.'s son, David.

Some evidence from the historical record suggests that it was Mises who approached the Rockefeller Foundation initially for funding, and not the other way around. "In Vienna, one of the first to seize the Rockefeller opportunity was actually von Mises, who, in 1930, although he viewed social planning and control as antithetical to contemporary civilization, approached Van Sickle for support," writes Robert Leonard in his essay entitled From Austroliberalism to Anschluss: Oskar Morgenstern and the Viennese Economists in the 1930's.  However,  in Jörg Guido Hülsmann's biography of Mises's life entitled Mises: The Last Knight of Liberalism, Mises seemed to be somewhat delighted or maybe even flattered that the Rockefeller Foundation had begun to hang out with him around 1926. [I think, but I can't remember for sure at the moment, that Mises says somewhere that the Rockefeller Foundation had been "following his work" for some time prior to this.] Writing about Mises's 1926 journey to America, Hülsmann observed that Mises was interacting with the movers and shakers in the Rockefeller world. He wrote that "In New York City, he [Mises] also met the leadership of the Rockefeller Foundation and seems to have made an excellent impression....He later recalled that the Rockefeller Foundation had 'taken a kind interest in my teaching and research work.'"

Hülsmann's book also provides another possible motive for the Rockefeller Foundation's funding of Mises. It might be that the Rockefeller Foundation needed to keep Mises around as opposition to one of their other stated objectives of this time period, namely, the objective of turning economics into applied statistics. Maybe they wanted to create the illusion of "intellectual choice" even though they were funding the positivist side of this debate very heavily. Hülsmann writes that

[Allyn] Young was known as a diehard positivist, and he was expected to make the economics department [at the London School of Economics] a center for the transformation of economic science into applied mathematics. This had been a longstanding plan of the socialist founders of the school, and of the New York-based Laura Spelman Memorial [i.e., the Laura Spelman Rockefeller Memorial], which donated large sums to LSE for research on the "natural bases" of economics.


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