 Ladies and gentlemen, if you don't come to Vienna, Vienna has to come to you, and thank you. And it does it in the form of one of the rarest species on earth, probably, an Austrian economist who is actually from Austria. My task today is to try to bring back to life a little bit this old Vienna. It's long gone, but of course there's a modern European, there's not much I can do without American support. So it's firstly, it's the digital tools made in the US that allow me to show you Carl Manger, potentially in a way that you haven't seen him before. Trying to bring him back to life a little bit based on a quite rare photography of old Manger. But secondly, more importantly, it's of course thanks to American Austrians that the Austrian school has survived to be something living to this day. And so that I could rediscover it and try to get interested in its history. Now let's go back to our world long gone, seemingly very different from ours, but bearing some striking resemblances to our modern predicaments. Let's go back to Carl Manger and his life trajectory. He's a way of spiraling into old Vienna. And we see here it's quite a different world that he was moving in, quite representative for a civic elite of newly emerging in this time. He was polyglot, he was mobile, cosmopolitan, quite flexible. And well, unfortunately, the rest of the population didn't really follow suit, these elites. So Novi Samdes, where he was born. Now this is Novi Sarge in Poland. Teschen and Tropau, where he went to school. And now Oppava and Tijin in the Czech Republic. Lemberg, where he worked as a journalist and Ludwig von Mises was born, Lviv in the Ukraine. And interestingly, Maniovi, the place where he spent his childhood, more or less was raised on the estates of his grandparents, physically disappeared. It was submerged by an artificial lake and doesn't exist anymore. Now in the other places at least the buildings survive, but the spirit is long gone. And it was a very interesting time of a crumbling empire, which in his last decades had somehow arrived its peak and shot a lot of tensions and contradictions. Now by moving across this empire, he shifted through different contradicting identities more and more in the tension of a centralized empire. The Austrian Empire was falling behind the other more modern states in Europe, the British, the French, the Prussians. But there was another empire that had fallen behind the Austrians before it was the Ottoman Empire. So the Austrian Empire had somehow to encompass parts of the falling Ottoman Empire in its structure in southeastern Europe. And you see this dispersal of ethnicities here. The map showing all the dispersed ethnicities. A dozen languages, half a dozen religions, one of them Islam, trying to cope with keeping track of modernity. And what is that modernity? It was mentioned before the more decentralized market structure of the west led to a wealth miracle, which then led to military dominance through more innovation, more technology, more capital to spend. That's the train structure in old Austro-Hungarian, mostly financed by a private means, private capital finance. This quite important technology of bringing people together, but of course also very important military technology of moving troops quickly. And at the same time we had capital investments in printing presses and of course the printing press was fairly old, but what was new and quite the reason very dynamic was the spread of mass printing, reaching the masses, connecting the minds. You know dynamic is very similar to the modern internet and what it has done by bypassing elites as well and spreading new ideas all around these quite obsolete structures. So in the 19th century Austria-Hungary by modernizing very late but more dynamically, more quickly than other places it even took over transported mail up to Egypt and the Near East. Austrian steam-powered ship went until India even and we have this dynamic of wealth creation coming pretty late because the crown realized that it really needed this kind of development. So that's maybe you know, rustling the empiricists from Sweden who has shown that we had the same dynamic in the 19th century and large parts of Europe taking over capitalist wealth creation as then in the 20th century large parts of Asia have followed suit and it's quite similar dynamic here that we could see leading to reinvestment and leading to a general reconstruction of the city of Vienna. The city of Vienna we've stood two times with fortifications the Ottoman onslaught and then becoming a hub not only of a centralized empire as the capital but also due to network effects of this interconnectingness becoming a financial hub and that was more important for the 19th century. So the old Vienna outcrew its limitations, the fortifications were raised and again it was mostly private capital financing the reconstruction, large scale reconstructions of large parts of Vienna taking away not only for the fortifications but also the Class C which is the whole area in front of the fortifications to better help defend against the riders that may emerge on the horizon. So new modern boulevards were created one of still most impressive ones in Europe the Ring Street going all around the old city along the fortifications and the Class C and bringing together all this elite of the Austrian-Gerian Empire and among those people were students and administrators and floored to the universities Chairman then replaced Latin as the main language of teaching and it was among these group unfortunately mostly lawyers next to doctors but of course you have an empire, you need lots of lawyers there we have the Austrian school emerging through Carl Menger who was studying law as well and economics was part of the legal faculties here. Carl Menger became a very young professor and he rose to prominence and it was partly due to the ground understanding that they need to understand economics. They granted absolute economic liberty unfortunately only to an elite of big merchants but those merchants got zero percent tax, zero regulation and were given the freedom to industrialize Austria-Hangary and the success rate was quite impressive and a lot of the mobility of the Austrian school the funds are actually new mobility of entrepreneurs, of engineers being part of that very dynamic project of bringing Austria back to the modern time or to the modern time now that's of course the principles you've seen it before first the Germans belittled the Austrians but then there was international recognition pretty soon here in 1888 this is the first mention of Austrian economists in the College Journal of Economics and then in 1889 in the Wiener Zeitung was shown also this is the first time there's this talk of an Austrian school Österreichische Schule von Volkswagen, Austrian school of economists so it was pretty quick recognition of a school and it was many thanks to Carl Menger who rose to this prominence because he was also the tutor of the ground prince who would have become a reformer and Carl Menger invested most of his time and effort into bringing about the generation of young people who made splendid careers in the monarchy and he was for a while hopeful that it could be reformed and brought up to date here is the lecture directory of the University of Vienna and it's mostly students of Carl Menger teaching there in the early 20th century as part still of the legal faculty teaching Austrian economics and his student Böhm von Barwerk even became Minister of Finance he's the president of the Academy of Sciences in front you see old Carl Menger sitting so it's quite a lot prominent for a school and it looks like an amazing success story having here the Minister of Finance on our old on the chilling bank note memorized unfortunately there's a dark side to that success story and as all the ground prince committed suicide he went mental as lots of people did at the time all this new interconnectedness I mean here you see Carl Menger upon his death that was on the main page of one of the main newspapers so really prominent person but the time had changed of course in 1929 already and he had become very pessimistic unfortunately he was prophetic as it turned out to be most people were overwhelmed by the new uncertainties and they sought new false certainties to be imposed on other people and it was an epidemic of neurosis in Vienna so as you say I think in America people went batshit crazy and there's one symptom of that there's only one Austrian school of economics but at least three Austrian schools of psychology so there's quite some coping with that and I think it shows some striking similarity of course among those people going mental some unfortunately very important political thinkers Ayang, Stalin, Trotsky, Hitler, Tito all met in similar coffee shops right next to each other in this old Vienna so that said how the best of times sometimes bring forth the worst of people and the general challenge behind that was a wrong approach to modernity which we've seen also in the more developed nations like France and Prussia and it's this kind of top-down enlightenment where the educated people they think they are of a better cloth and they try to take over the power in society from the full order and they try to impose a kind of modernization on their population and they think they know it all because they're educated, they went to university they got their PhD, now they know it all they just have to implement it they have no practical experience whatsoever and unfortunately this kind of top-down approach that's how the Austrian Enlightenment it's usually perceived it already started quite early with Joseph II or his mother Maria Theresa who under the pressure of falling behind the more modernized nations tried to copy some of the top-down modernization and of course it was reflected again in the centralized bureaucracy that tried to co-op thinkers like Carl Mengen bring in people like Bern von Barwerk in their centralized bureaucracies it's this Joseph II who nationalized monasteries as well and he didn't prevail there was quite a counter-reaction of course to this top-down modernization most of the country was still very urban agrarian so it was then belated that this new tribe of social engineers emerged in the modernized universities with modern sciences and feeling like they really understand it now and are ready to impose that order and it's out of that hybrid, this kind of pride of intellectuals that a large part of the craziness emerged and the Austrian coup was submerged by a kind of death cult and it's the Austrian school of psychology that came up with the term of the Thanatos the death drive and I think it's quite telling that actually what seems like a top-down enlightenment actually is disrespect for the complexity and uncertainty of life and it's an imposition of order and it's a kind of death drive you want to kill what you don't understand so you can control it impose a certain order led by technocrats led by experts and in old Vienna we had this struggle between the death drive and the drive of life and it was reflected as well not only in economics but in arts and literature and it's quite interesting that this realism of the Austrian school you can also find in the other Austrian schools of other sciences and you can find it in arts and literature as well so you see there's quite a struggle going on within the soul of modern human beings and I think Friedrich August von Hayek put it quite aptly when he said we are also in a fight for the party of the living so he took the term it reflects a bit the thinking of iron renders well that you also have to take a stand for the living the living that you can't really grasp and understand immediately and it's reflected in a static struggle or a static challenge as well between the death drive of people imposing a new order which usually is an ugly order and people trying to cope and figure out how beauty and truth can be brought back in an uncertain age of modernity we had that struggle in architecture as well in all Vienna and on the one hand we have Otto Wagner who tried something quite similar to Frank Lloyd Wright using modern forms to try to find a fusion between utility and beauty and of course the youth style of this 19th century Vienna is quite related to the Artico styles in other places he's trying this quite challenging struggle he erred a bit on the side of top-down enlightenment again it's also the time of the planned city and that was his plan for a large part of Vienna which wasn't put into practice fortunately I have to say because you can already see quite of this top-down imposition of order which wouldn't have worked out that well so I think the Ringstrasse is more of a compromise maybe not a perfect one there was a counter-reaction to the top-down imposition and it was another architect a little less known Camillo Sitte he thought that beauty lies in the bottom-up spontaneous order of medieval cities and he really cherished the old marketplaces as compared to the new bulwarts that are created on planned order but he erred a bit on the side of nostalgia and romanticism and of course failed to see the reality of the squalor and the darkness that some of the modernizers of course tried to fight by making use of capitalistic wealth creation of bringing electricity sanitation to the people and again it was mostly private developers building creating this new standard of living in old new Vienna at the time so this struggle I think is quite important to understand the true legacy of the Austrian school because the similarities with other schools are quite striking of the same time and I think it's a different kind of enlightenment it's a quite different project of an enlightenment it's not at all like the French enlightenment of the philosoph like these intellectuals imposing an order it's more like the Scottish enlightenment of people from theory and practice coming together and struggling with modernity and figuring out that being enlightened doesn't mean that you see everything from up top and you know everything it's understanding that our reason is but a small candle and it combines two very contradicting approaches and one is the humility being humble in trying to know being humble and understanding that you will not be able to control the true uncertainty and complexity of life but you can be humbled by trying to understand a little bit about it but at the same time understanding by appreciating that there is some darkness and quite a lot of darkness not only the darkness of uncertainty and complexity but also another kind of darkness the death drive that I mentioned and it takes a very different stance a different approach even belligerent approach of fighting this kind of darkness and that's what gets people still confused about someone like Ludwig von Mises who combined this humility in his try for knowledge with the absolute steadfastness and even belligerence in his fight for principles against the darkness that he perceived in not giving in and proceeding ever more boldly against that kind of darkness that is all pervasive in the philosophical scientific and literary tradition of all Austria and being aware that there is a kind of darkness challenging us and is bringing this world together also two of the lesser known students of Karl Menge helping make an outstanding impact on the world those are Felix Omari Richard Schüller they were actually his favorite students and because they were his favorite students he recommended to them don't become academics and they were gloomy as well but in a realistic positive sense they were as prophetic as the teacher Felix Omari would be known as the raven of Zurich because being so prophetic which at the time seemed very pessimistic and gloomy so he went to Switzerland and he became instrumental in creating private banking in Switzerland and underestimated infrastructure of trade in the dark times of wars in Europe and Richard Schüller led a life as a hidden diplomat behind the certain behind the curtains working really hard to bring back peace after the Second World War and was instrumental in bringing back a small independent Austria not being submerged in a larger structure so that's quite interesting that very early on you have very practical people being influenced by the Austrian school not being that well known but having an outsized impact and being part of a larger project here that's at the same time humble but very steadfast in fighting the darkness of our times and of course part of the mood was already not in the bureaucracy in the castles in the offices it wasn't the saloon and coffee shop culture of old Vienna where not only the craziest people and the fools met but also some of the greatest minds of their time met and that's why what I perceive as the peak and pinnacle of this old Austrian school and it was in particular one person who was crucial for that pinnacle of the Austrian school and that was Ludwig von Mises he was working for the chamber of commerce at the time I mean you have to make some money as an academic but here he instituted his Mises circle and those are the still remaining holes in the chamber of commerce because we rediscovered only a decade ago a plaque that was installed there by four people unfortunately only one person is left to be with us today it was a plaque installed in 1988 to commemorate the Mises circle at the place of the chamber of commerce it's somehow the Austrian functionaries of the entrepreneurs that they are milking at the modern chamber of commerce forgot all about this tradition and forget about the plaque and it somehow lost some place fortunately we were able to rediscover it and now it has got its place back that plaque I know you can read the names was put up by Mario von Mises, Marie Rothbard Burton Plumer and Lou Rockwell and it's still there the signatures and after this Mises circle which was quite peculiar it was not just a seminar of economics and theoretical economics it was moving from Mises brought together business people people from other disciplines artists of their time and it was really like an extended salon so after their meeting at the chamber of commerce there was a restaurant called the Green Anchor having a fusion kitchen at the time Italian-Austrian fusion kitchen the room still survived the restaurant of course couldn't survive all this regime uncertainty we've had and I think even the last restaurant has shut down to the grayness the darkness of modern times there was not enough after dinner they went on to a coffee shop the Kaffe Künstler was right in front of the university I think it's the only picture surviving of that on sunny days they could sit outside but during the night they went inside and it's there on the piano that famous songs of the Mises circle were sung and it was quite symbolic for this approach of the Austrian Enlightenment which is sometimes called the gay or cheerful it's you see the darkness and you're very realistic and you appreciate it but it doesn't let it spoil your mood you still keep your mood up and you maintain your strength your mental strength and your strength in dark times and it made it possible for this tradition to survive until our days so that even a Ludwig van Mises can still be with us as if he was still here teaching us through his books he was not only an accomplished theoretical economist but quite a practical person who made an outstanding practical achievement and that was that in old age he had to leave his home and in old age he had to restart his life in a new language in a completely different surrounding and he achieved the feat he's one of the bear threads by which this tradition has survived by writing in English, teaching in English and bringing this tradition forth to new generations and it's also the 40 years of the Mises institutes I think are very much a practical achievement of a dissemination and it's now up to me to thank you from the bottom of my heart that you have given the Austrian school a splendid second home and have made it possible this tradition has survived to this day to see probably the largest generation of Austrian economists and practical people being inspired by the Austrian school that has ever lived on the planet much larger than a small elite in old Austria thank you very much my dear American Austrians