 I was given the really difficult task to talk about a very odd species, the homo-Austriacus, and let me start with some famous last words of an Austrian politician. Frezinovac, a socialist, it's all very complicated. And I think the first defining characteristic of an Austrian is, you could say, complexity, but usually it's just too much complication. So let me see what's an Austrian, what's Austria. Not even that is quite certain. It's maybe a Latinized version of a Germanic word for the east. So usually it's referred to Osterich, the eastern March, or Margrave, a borderland in the border region, a small territory about a thousand hectares. But for some Swiss upstarts it became the power base due to a forged document. And those Swiss upstarts of course are the Habsburgs, and they created one of the largest most important empires in Europe. So Austria is much more important than it seems nowadays, in particular for European culture as always being in the borderland region. And I tried to figure out what are the defining characteristics of this Austrian, and then of course I tried to deduce something about Austrian economics, and what's so Austrian, what may be Austrian, about Austrian economics. Now the first thing that one realizes when visiting Austria, of course it's that now it's an alpine state, beautiful mountains, and I've talked many years ago about the traditional liberty of mountain peoples and mountain cultures, and I think some of that implies still, in particular to the countryside of Austria, but there is difference. Even those mountain Austrians are not just a recluded mountain population defending their old traditions, but they've historically always been at the center, and even at the center of trade routes. So I think it's a very interesting mix anthropologically between this kind of mountaineering culture and a culture of trade, which goes back quite a long time. It's a long tradition of metal production and of international trade. The Danube is one of the very few rivers which flows to the east, or the main rivers which flows to the east in Europe, and through the mountain passes already since Roman times had a lot of trade, and the Celts already were big in metal production. So there is a long tradition of kind of merchant entrepreneurship within these mountains. We have the tradition of the Himmler Lords, so-called Himmler Lords, which are basically entrepreneurs running big production facilities, which have been powered by water mainly. So there's an interesting kind of industrialization long before the steam engine going on in parts of Austria, in minting and metal production, which I think gives it a particular kind of mindset. I've traveled those Alpine regions a lot, I've written a book about them, and that's really one of the aspects I like a lot about modern Austria is I have the impression that there's a certain mentality surviving, kind of realism, honesty, directness, and a no-nonsense attitude, which I find usually in stark contrast to the more urban settlers of modern Austria and nowadays. Most Austrians, ethnically, seem to be Bavarianized Slavs, so the Bavarians, of course, southern Germans, so we're in a way Germanized, and this Macha Orientalis or Macha Austria was kind of Eastern from the Bavarians, of course, to the Eastern Borderland region, and there's even a hypothesis that Austria might go back to a Slavic term, which is Ostragora, a steep mountain, so that refers already to the mountains, even though the region of Ostariche is not very mountainous, but you can still see the mountains in a distance, maybe. And I think this kind of intersection between trade, production, and mountain cultures produced a kind of anti-collectivist mindset of some residue still survives in the mountain regions, and it's anti-collectivist in the sense that it doesn't really, as the flat plains of the state, it doesn't lend itself easily to organization. We have all these recluded valleys with the different dialects and so on, and I think there's still a stark contrast in particular to the flat plains up to the north in Germany and Prussia in particular. The survival in the Alpine region still needs cooperation, so there is a strong tradition of non-state cooperation, still surviving until today with a lot of cooperatives, you have water cooperatives, you have valley cooperatives, and those are overlapping, so they are not just exclusive nation-like, state-like, courageous, but more kind of bottom-up cooperation between smaller-scale farmers who basically are entrepreneurs, of course. We have a tradition of dispersed farms in large parts of Austria, so I think that's one part of it, but of course I think that's the nicest, maybe the most unique part. And of course for political and religious reasons, Austria has been severed from the German political units for a while, and one of the religious regions, of course, Catholicism that the Counter-Reformation was successful in Austria because the Hubsburg Catholic family, and it's a kind of top-down imposition, of course, but still large parts retain the Catholic culture, and what's a Catholic about the culture and what makes it unique? I think it's the Baroque style, and Baroque meant in the beginning something strange and bizarre, even the word Cortesque comes from the grotto in the Baroque garden. So what's so strange and bizarre about the Baroque culture? I think it's in stark contrast to the Puritan classicism, which once have orderly forms, and the Baroque culture is more dedicated to the dynamic forms of life and death. So you have stark dynamic contrasts, and I think it has affected a bit the mindset. The human form is considered as divine and Catholic thought, so you see a lot more reference to the human body, to the human form, and to the sensual, as opposed to the more abstract, idealized approach to art, and then, of course, you have the universality of Catholicism and the interconnectedness, so it was the Baroque culture combined many different art forms, in particular opera, music, and sculpture, and paintings, and I think that's contributed to our unique mentality, which, until nowadays, is a bit different from the German. And then, there might even be a link to the Austrian school. Some philosophers claim, as a philosopher, Mr. Krasl, has tried to point out that as Aristotelian realism has survived due to Catholicism, to a larger degree in Austria, throughout the schools and the universities, and interestingly, one of the few philosophers, Carl Mengersides, frequently is Aristotle in his principles. So there might even be a link to that realism in a philosophical sense, which I like to see as defining, in particular, an age where reality doesn't seem to be that important, and understanding of reality doesn't seem to be that important compared to your idealized, utopian visions of what should be and what could be. So then, of course, it seems like Austria is German, but not Germany, and I think that's one of the best points about it, to be German, but not Germany. And it meant usually to not be Prussian, so Austrian could be defined as the not or non-Prussian, and that was the view of one of the most important poets and writers of Austrian literature, Hugo von Hofmannstahl, and he even set up a table. He started comparing the typical Austrian and the typical Prussian, and I think it's quite insightful. Of course, the only way to speak about the Austrian is in an Austrian way, which means with this claim that you shouldn't take anything too serious of what I'm saying, that is quite important. I think it's all full of prejudice, but of course, contrary to popular prejudice, calling something a prejudice doesn't mean it's wrong. But still, it's a list of prejudices that Hugo von Hofmannstahl offered in a table. He contrasted by saying the Prussians are bond together by state mentality, whereas the Austrians are bond together by love for the homeland. Now, what does that mean? I figured out the love for the homeland in the Elpine region is something completely different. It doesn't refer usually to a closed border that you control or a closed border region that you try to control. Usually, if in the Elpine countryside people refer to their high muds, their homeland, they are referring to mountain tops, to pinnacles, as points of orientation. So it's a kind of attachment to the place you've grown up or you feel a longing to, and that's a quite different bond, I'd say. Hugo von Hofmannstahl claimed that the Prussians show more virtue and more efficiency. It seems obvious, but the Austrians more piety and more humanity. Thus, Prussians are strong in abstractions and great in execution. The Austrians are quicker in perception. The Prussian acts by the book, and the Austrians acts according to decency. Of course, that's a very positive look on the Austrian side. The Prussian is more consistent, but may show cowardice. In particular, when being part of a group, a coward is in standing out, being afraid to stand out, whereas the Austrians show more ability to find one's way in life individually. The Prussian shows more self-confidence, whereas the Austrians show more self-irony. Whereas the Prussian tends to hard exaggeration, the Austrians tend to us irony until self-dissolution. So it might even be looked at as a point of characterlessness or lack of character, whereas the Prussian has a built character according to Hofmannstahl and the inability to think oneself into others. He tends to be self-righteous, presumptuous, cool masterly, whereas the Austrians tend to be shame-faced, vain and witty. Of course, as I said, full of prejudice, but I think maybe a bit enlightening. The German says Hofmannstahl is accustomed from his cool days onwards to show this stain for healthy human understanding by being satisfied with words that have been raised up to the noble standing of concepts. And of course, we had this impression of idealist, abstract philosophy on Germany, which Austria has not been spared, but a little bit, only a little bit. Then, of course, Austria compared to Prussia was an old empire and not a progressive nation state, and that tended to be the most important political difference and I think the link between culture and democracy is just as Hans has stated in his introduction to the democracy that got that failed. He gives the Austrian empire as an example. And I think I have a reason for that, of course, negative correlation between culture and democracy. So as an old empire, of course, it was always lacking in democracy, whatever that means. And I think the reason is that culture is produced by an elite of geeks. And in a democratic state, this elite of geeks is, to a large part, absorbed by politics. So you have all these policy wongs which would concentrate on the more aesthetic, scientific, cultural endeavours to prove themselves, to become upstarts. And of course, the reason for this aesthetic passions of the Austrian bourgeoisie was to imitate the noblemen, but they couldn't imitate them politically, so they had to imitate them as patrons of culture and science. And I think that's one of the reasons for the flourishing of culture in Austria. So not being progressive was actually quite a strong point in having a quite progressive and flourishing culture, which still defines Austrian steel. I mean, the main capital surviving which we've been living off quite comfortably for a long time is this huge cultural capital that's been amassed over quite a long time. In Austria, of course, there were reforms and even democratic reforms, but it tended to be a top-down thing with a small state elite, which is usually referred to as Josephinism, and Carl Peter will talk about more later on. And this kind of Josephinism which goes back to the enlightened absolutism of Joseph is, of course, I think it's the stain on the liberal elites of Austria. So most thought about liberalisation as being a top-down process, which needs to get rid of the old traditions and cultures, which are obstacles to being a progressive state. But in Austria it was just a small elite, and I think it failed in a tremendous way, and it was obvious in Austria. The failure was obvious. When the liberals were successful, they disappeared. There are a few places where it's that obvious that the kind of wiggism or liberal wiggism was a big failure in Austria, and I think that reflected upon the political mentality of Austrians, a kind of scepticism, a kind of pessimism, even I'll talk more about that later on. So being an old empire, interestingly, even though it was borderland against the Avars, and the Huns, and the Turks, and the Mongols, and so on, later on the Ottoman Empire turned out to be an ally, because it was one of the remaining old empires, and both the Ottoman Empire and the Austrian Empire nationalism was the major danger of foe, in particular the new language-oriented and exclusive nationalism that was emerging, linked to democracy later on. So it was more like the Ottoman Empire than Prussia, of course, and early on there was a kind of direction towards the east, given the Danube, the old trade links, and for a certain time Austria was really important in Oriental trade. Most of the mail was done by Austrian ships in the Ottoman Empire, and Austrian harbours became centres of cotton trade, and that was the main reason why a new kind of entrepreneurship emerged in Austria. It was mainly in the textile industry, which created private riches, and I think then with having this orientation in trying to be patterns of the arts and cultures is the main reason for this flourishing, and I would call it kind of late enlightenment in Austria, but of course we'll have to distinguish enlightenment. I think if one can talk about an Austrian enlightenment it's much closer to the Scottish enlightenment than to the French enlightenment, and I think the main difference is that you really have that exchange between the academics and the artists and the merchants, and then I think we can see in Vienna, out of all places, in the private atmosphere of the salon or the coffee shop, it's a more private exchange of people from different walks of life. It's not an exclusive academic or exclusively political project, this kind of enlightenment, so it's really a flourishing of merchants who have the money and the time to be interested in scholarship and scholars and artists who are funded by and helped by these patrons of arts and sciences, and I think that's a unique mix, so I'm quite fond of this description as late enlightenment, and I totally agree with my Swiss friend Robert Neff, who counts the Austrian school among those representatives of the late Austrian enlightenment. The orientation to the east is also reflected in the saying by Metternich that in Vienna the Balkans begin, and Vienna of course is quite old, it's not alpine in any sense, it's a contrast, even in its music you feel that there's an eastern touch, it has a more sentimental feeling to it, and it sounds a bit like crying, it's not that happy alpine folkloric music, so I think in Austria there was really a meeting of different souls and as a historic bridge between, so it's maybe the easternmost part of western Europe, I'd say, with crucial importance to Europe as a cultural area, and then of course Vienna became a center in Vienna early on, even Maria Theresia started a school, which is now a diplomatic academy and started as a school to learn Turkish interestingly, Turkish Persian and Arabic for reasons of trade, and of course it was mercantilism, that's a tainted aspect of Austrian entrepreneurship, as Josephinism in economics as well, we had a top-down approach of a small era of almost complete economic liberty, but reserved to a small minority, and they were called the k'un k'a priviligierte Großhändler, the privileged great merchants, and it was really just a small number of people who got amazing economic liberty, no taxation, no regulation entirely free to do as you like, be based in free harbors like Trieste and Fiume, totally exempt from any state over side, more or less, and of course that led to increase of riches and abelated, but very quick industrialization of Austria, but it led to reactions as well, and they were very stark in Vienna, so you had this kind of late enlightenment, lots of people having time and passion to think about the world, and you have a tiny elite controlling a lot of this economic process, and then of course you have the typical pattern of inflation, the founders' era in the 19th century, the phase of the strongest economic development ended in the founders' crash, and it's a typical boom bust cycle early on, quite a classical example of that, and the reaction was very strong, so in Vienna you had all kind of lunatic reactions against the market economy, against capitalism, and for a while in the Vienna coffee shop you could go there and you could meet a young Stalin, a Trotsky, a Hitler sitting there and thinking their schemes, of course everyone was ignoring them, and it wasn't obvious what they were up to, but it all started in Vienna unfortunately, so I think it's quite apt to describe this small Austria as Karl Graus has done as a kind of laboratory for global lunacy, that's the way he termed it, and I think that was very prophetic at the time, and that shows of course the importance of Austria, another famous saying is it's the kleine Welde in der die große Ere Probe hält, it's a small world in which the greater world holds its rehearsal, of course rehearsal for lunacy, the lunacy of the 20th century, but that of course means that Vienna was the best place to study the lunacy in its beginning, so that's why Vienna produced this profound tradition of understanding lunacy, criticizing lunacy, and trying to fight lunacy, but of course when trying to fight lunacy you realize that you need a certain mindset and that was developed in Vienna, and now I'm talking about the gay apocalypse in Vienna, it's the certain mood where you understand that processes of desilization are going on, and you as an individual of course you are part of historical patterns, it would be quite foolish to exaggerate your importance and to take it too hard that sometimes the world doesn't seem to follow the Wiggish pattern, but a pattern of frustration and of things being built up falling down, so it's a particular mindset which is a bit gloomy, but still full of irony and humor, and I think it's the only way to take it, and I think it's the only way to take the modern world, and this art was perfected in Vienna how to live through times of desilization and how to keep your good spirits at a time like that, in the Fledermaus, there's a famous line, the operator, glücklich ist wer vergisst, was doch nicht zu ändern ist, you are happy if you stop thinking about what you can change, just I mean you can conclude, focus on what can change, that would be quite positive, but of course you can also just conclude a very pessimistic outlook as it's obvious in Nestroy another very important writer of Austria, he says for example of every human I believe the worst, including myself, and I've hardly ever been wrong, so it's a kind of gloomy, but maybe realistic, no nonsense approach to human nature, you don't expect too much, you've seen the utopian ideas and experiments, you've seen the lunacy and its infancy, and if you're an intelligent person you've learned something, and Nestroy again he says I think the major characteristic of progress, it always seems larger than it really is, and it's kind of no nonsense approach I'd say, which I really like in Austrian literature, and in particular in this phase I would call the late enlightenment, so I think quite obviously it was the right setting for the Austrian school of economics to emerge, and there are some parts that are really really Austrian in that sense among it, now let's look at modern Austria just briefly, I have a hate and love relationship of course with the country, Erik Greta von Kühnel Lidin has described as the Republik der Neidgenossen, so it's a Republic of which the last remaining bond is Envy, it's not like the Eidgenossen in Switzerland, it's the Neidgenossen in Austria, which means comrades in Envy, and of course maybe it's linked to having been great in the past and being reduced to being quite small, and stuff like that, I mean of course that should do something to our cultural mentality, so the typical Austrian today is a bureaucrat in the beneficiary of redistribution of course, and he thinks it's all trust, and it's an amazing miracle that has happened in Austria due to socialism, Vienna is still listed among quite a few rankings as the best place in the world to live, the highest quality of life, so it looks like an amazing success story that we have, of course there are other reasons than socialism for that, but they are quite complicated to look at, those rankings are mainly done by asking expats, so if you are living on a U.N. salary tax-free in Vienna, it's great, in particular because the competition by Viennese spenders is reduced because they are taxed so highly that you can get a lot for your money, and then of course you live in a city that was among the five top cities in the world already in the last and center in the century before, so it already had 2 million inhabitants, and you see that of course in the city as a huge cultural heritage and architecture and buildings even outside of the small city centers where most tourists are concentrated, so you have a lot of high quality buildings already built for 2 million people city, this rich culture and this rich cultural heritage and most of the value now this is created by tourism, so that's of course a bit concentrated and transitory, so if you don't have to earn your money in Vienna or you don't have to earn it honestly in Vienna, it's a great place to live certainly, but then also you can have a great life in France of course, if you don't depend on the France salary and are not taxed by the French, French is a bit like that I'd say, the quality of life in Austria, it's still I mean what's positive about Austria, of course we had the German Wirtschaftswunder as well, but kind of piggyback, so even in Germany they don't understand anything about their economic miracle and in Austria it's even less understanding, so most Austrians are pretty sure it's redistribution that made us that wealthy and will keep us that wealthy, so I'd say 90% of the population are convinced, this kind of redistributed system and the purport system we had in Austria that had so probably about the social peace and harmony where everyone gets along and we all get wealthy mysteriously and of course there was a lot of historical luck being the major trade partner of Germany and being on the right side of the iron curtain, just historical luck I'd say, because it was quite close, it was fairly close and if Mises is correct in his memories he was quite crucial in avoiding Soviet and socialist experiments in Austria by convincing the socialists of the time who were real thinkers at the time of course in Vienna and so he had, he made some impression apparently just by argumentation on them in the coffee shops and in the salons which I think is great. So what is positive about Austria nowadays I think the best thing about it is relatively small, not as small as it should be or could be but still relatively small compared to other countries, as I said it's part of German culture but it's not Germany and I think nowadays that's really a big plus and it's less urban than Germany so you still have these counter whaling powers of the countryside, this alpine culture I mentioned before so I think that's that's one of the reasons I'm still living in Austria and I enjoy living in Austria and of course the tendency is obvious but we always say in Austria we're five years later than the Germans so we can always watch in consternation what the Germans are doing and then have enough time we hope to react or flee as it turns out. So what is so Austrian about the Austrian school? I'd say it's a realist approach, a non-sense approach to the world, it's interdisciplinary which of course much of this spirit of the late enlightenment in Vienna where most of the scientific progress happened not at university, that was quite obvious, it was not the major academics, most of the important representatives of Austrian schools and there are various Austrian-Viennese schools never got full professorships, it was usually the more I mean mainstream colleagues so a lot happened in the coffee shops and the salon atmosphere where there was also an exchange with the practitioners, the entrepreneurs, the merchants and so on and I think that shows in the Austrian school as well I think the Geistkreis of Hayek and of course the Miseskreis were really the places where most scientific progress happened for a school and influenced a lot of different disciplines which we may not even know because it's hidden, there are no transcripts of the sessions of the Miseskreis but it's hidden in the influence of very important thinkers of their time. I think what's Austrian about the Austrian school as well is it respects complexity, diversity and individuality which of course was the only way to survive in this complicated pattern of the K and Ka monarchy, a mix of ethnicities and religions in particular in Vienna that showed this kind of complication so it really doesn't lend itself to idealize political projects because immediately you run into practical difficulties of how people settled historically and what their links are and they're all very paradoxical so the kind of ethnic cleansing that happened also of course happened later with the wars and the landscape before was totally different and extremely complicated so you can really draw lines on the map and it's most obvious I think in this region. I think there's what's Austrian about the Austrian school is it distrust in the great ideals even the ideal of democracy. I think that it's not wiggish in the sense that at least there is some experience, I mean we still see some wiggisms, some hope in progress which I don't think is bad at all and Mises and other representatives but we also see in Mises over his life of course he becomes more gloomy and the same thing happened with Menge, he became very gloomy, he even stopped writing so I think that's too much that's not the Viennese way to really take it to your heart and so I think we see that there was realization that civilization is fragile and de-civilization is a constant danger so a Dutch historian Mr. Dekker has described the members of the Austrian schools as students of civilization I would add that they are also students of de-civilization and that tends to be overlooked and maybe even be more important to look at this darker side of human trends with a more nonsense approach as well and not this idealized politicized approach but just more bullshit approach trying to understand what's going on without putting up your pink classes while doing so and I think there's quite a reason to see that that's typically Austrian or Viennese about it and shaped by the time and the mentality at the place of the time nowadays there is some trend by academics to claim that the modern Austrian school is not Austrian at all it's an invention by Americans and there's a lot of blame heaped nowadays a few works have come out recently who study the history of the Austrian school by academics mainstream academics and they of course they point towards something that happened in the US tradition and I think unfairly Hans gets a lot of blame as well for being a representative of an un-Austrian Austrian school and I think that's totally mistaken and but I think the mistake is an easy one to make and the mistake comes from this tiny little phase at the end of the 19th century where the representatives of the Austrian school were also part of a liberal state elite that was a very short time but it was it's conspicuous of course if you look at history how many ministers the Austrian school produced and what they did and how many excellencies they produced so major representatives of the Austrian monarchy so you see very established part of the establishment and part of a liberal, vigorous, progressive establishment with some Josephinist leanings of a top-down bureaucrats trying to impose liberty upon their unknowing and uncultivated population and I don't think that's the best part about the Austrian school I think it's just a biographic accident I don't think it's too bad neither I mean they had some influence but I think it's overrated and overstated and I think the mon-driving force behind this recent interpretation of what's Austrian about Austrian economics tend to look at the status of a mainstream established liberal elite and conclude that the Austrian school in the United States is not part of the establishment it's not part of the academic mainstream so someone must have done something wrong maybe by having too low standards maybe by being exaggerated ideologues and so on and by sidelining the gatekeepers in media and academia and so on so on the surface it looks as if there's a story to tell and I think it's the totally wrong story to tell my impression is if you really look and of course you have to change with the context and it's quite obvious when Mises moved from the context of his old Vienna he somehow he realized it's gone that age is gone and he reinvented himself and new surrounding a new era with new geopolitical challenges with new ideological challenges and he changed a bit his style which I think is obvious in in human action as compared to national economy there's a little change in style and there's a change in focus and there's a change on yeah what you focus on what you leave out but I don't think it's a change in mindset I'm pretty confident that Mises has remained true to himself and has now somehow turned into a different person but the context of course changes I mean we cannot just continue the discussions of the 19th century in Vienna the Austrian school if it's a tradition must be a living tradition so in that sense I'm quite sure that this property and freedom society is the most Austrian gathering in that sense that I know of because it really and that was the idea of Hans in the first place to have a salon and what's a peculiar Austrian about the salon it's really it's not the public pretense that you have it's a private gathering of like-minded people who have the absolute liberty to speak their mind and the absolute liberty to show a no-nonsense approach to the world without thinking about sensibilities and all the political considerations of real politics and so on and I think that's defining about the Austrian school and I think that's the main reason the Austrian school has survived that made it special because it's not just a merchant marginalist tradition that has become part of the mainstream as it's usually told but it's a real an approach of students of de-civilization maybe or have it both ways of the trends of their time we are willing to understand them in an interdisciplinary and no-nonsense way so I think in that sense I can really close by saying thank you for your attention my fellow Austrians