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Nation, State, and Economy, published less than a year after Austria’s defeat in World War I, examines and compares prewar and postwar economic conditions and explicates Mises’s theory that each country’s prosperity supports rather than undercuts the prosperity of other countries. Mises’s humanitarian recommendations in this book, born from a classical liberal perspective, provide a striking example of how supposedly “hardnosed” economic theory, based on the reality of experience, is in fact far more supportive of human flourishing than seemingly more “idealistic” but actually impractical social theories. Specifically, Mises warned of the consequences of the punitive terms of the Treaty of Versailles by victors more interested in punishing their defeated enemies than in building a Europe that would be able to meet the challenges of the future. With the benefit of hindsight we see how different European and world history might have been.

“Rational policy and rational economic management have outwardly enriched beyond measure the lives of the individual and of nations. That could be overlooked, since attention was always paid only to the poverty of those still living outside the boundaries of the territories already won by the free economy and because the lot of the modern worker was always compared with that of the rich man of today, instead of the lots of both being compared with those of their ancestors. It is true that modern man is never content with his economic position, that he would like to have things still better. Yet precisely this incessant striving for more wealth is the driving force of our development; one cannot eliminate it without destroying the basis of our economic civilization. The contentment of the serf, who was happy when he did not suffer actual hunger and when his lord did not thrash him too badly, is no ideal state of affairs whose passing one could lament.”

Ludwig von Mises

Ludwig Heinrich Edler von Mises (1881-1973) was the acknowledged leader of the Austrian School of economic thought, a prodigious originator in economic theory, and a prolific author. Mises’ writings and lectures encompassed economic theory, history, epistemology, government, and political philosophy. His contributions to economic theory include important clarifications on the quantity theory of money, the theory of the trade cycle, the integration of monetary theory with economic theory in general, and a demonstration that socialism must fail because it cannot solve the problem of economic calculation. Mises was the first scholar to recognize that economics is part of a larger science in human action, a science which Mises called “praxeology”. He taught at the University of Vienna and later at New York University. Mises wrote many works on two related economic themes: 1. monetary economics, inflation, and the role of government, and 2. the differences between government-controlled economies and free trade. His influential work on economic freedoms, their causes and consequences, brought him to highlight the interrelationships between economic and non-economic freedoms in societies, and the appropriate role for government.