ABSTRACT
In May 1940, the fate of Europe seemed to hang in the balance. On August 23, 1939, Hitler and Stalin had their foreign ministers, Ribbentrop and Molotov, sign a nonaggression pact in Moscow. The pact contained a secret protocol specifying that should war break out, Nazi Germany and the Soviet Union would divide Poland between them and the Baltic States of Estonia, Latvia, Lithuania, and Finland would be recognized as part of a Soviet sphere of influence. On September 1, 1939, Hitler’s armies invaded Poland from the west and on September 17, Stalin’s armies attacked from the east. Before the end of the month, Poland ceased to exist. In November 1939, Stalin attacked Finland, resulting in a protracted winter war that lasted until March 1940, when the Finns finally had to sue for peace and accept the loss of a large swath of border territory, which was annexed by the Soviet Union. In the west, Great Britain and France had declared war on Germany two days after Hitler’s invasion of Poland, but except for some minor border incursions into the Saarland, they initiated no ground offensive against Germany. Sea combat along the Scandinavian coast resulted in both the western Allies and Germany making plans to invade Norway. In April 1940, Germany’s armies invaded and overran Denmark and Norway, just a few days ahead of a planned British operation. Secure in the knowledge that Stalin was his ally in the subjugation of Eastern Europe, Hitler turned west to defeat Great Britain and France. In the early morning hours of May 10, 1940, Germany invaded the Low Countries – Holland and Belgium. By the third week of May, the German armies fully occupied Holland, most of Belgium, and portions of northern France less than seventy-five miles from Paris. The Germans had also reached the English Channel near the French town of Abbeville, thereby effectively cutting off the British Expeditionary Force from the main forces of their French allies to the south; this would result in the British evacuation at Dunkirk. From Geneva, Switzerland, the Austrian economist Ludwig von Mises wrote a letter on May 22, 1940, to his long-time friend and colleague, Friedrich A. Hayek, a professor at the London School of Economics. Since autumn 1934, Mises had been Professor of International Economic Relations at the Graduate Institute of International Studies in Geneva. He had moved there from Vienna, where he had been employed since 1909 as a senior economic analyst for the Vienna Chamber
of Commerce, Crafts and Industry. He had also taught at the University of Vienna as a privatdozent, an unsalaried instructor with the title Professor Extraordinary. In addition, Mises had founded and served as vice-president of the Austrian Institute for Business Cycle Research, as well as helping to revive and serve as vicepresident of the Austrian Economic Society. Beginning in 1920, Mises had organized a privatseminar (a private seminar) at his Chamber of Commerce offices that brought together many of the best minds in economics, sociology, philosophy, political science, law, and history in Viennese society; indeed, this Mises-Kreis (the “Mises Circle”) gained a wide international reputation during the years from its start until Mises’ departure for Geneva in 1934. Now with the high probability of the imminent fall of France in May 1940, the danger existed that neutral Switzerland might become a target for German conquest. Such an event would surely have meant Mises’ arrest and deportation to a Nazi concentration camp in Eastern Europe. Besides his Jewish ancestry – his great-grandfather had been the head of the orthodox Jewish community in the Galician city of Lemberg during the days of the former Austro-Hungarian Empire – Mises was internationally known as an outspoken opponent of all forms of collectivism, including German National Socialism. The Nazis had shown their interest in him during March 1938, when, shortly after the German occupation of Austria, the Gestapo had come looking for him at his former Vienna apartment. They seized his papers and manuscripts, his family documents and possessions, his correspondence and files, and his entire library, except for the books he had taken to Geneva. Mises had known for some time that he would have to leave a Europe increasingly threatened with Nazi control. His former student and friend, Fritz Machlup, who was then teaching at the University of Buffalo in New York, had been trying to arrange an academic appointment for Mises in California at UCLA. In a February 28, 1940, letter to Machlup, Mises stated, “Europe, unfortunately, is not a bearable place of residence anymore. I must strive to leave.” But at that point in early 1940, when Germany and Britain and France were still engaged in what historians sometimes refer to as “the phony war” on the western front, Mises was reluctant to accept because of the financial terms of the appointment. Family expenses were too great for him to hope to live on the salary suggested. Mises had married in July 1938 at the age of fifty-six, and now had the financial responsibilities of a wife and her two children from a previous marriage. If the salary offer from UCLA could not be increased, then Mises stated, “Even a postponement of the appointment by one year would be financially advantageous, as I could, with my higher Swiss revenues, lessen my financial burdens. But, should this not be possible, I would have to accept the proposed salary.” Mises added that, “It would be a true pleasure to see you and our other Viennese friends again. A teaching appointment alongside [Benjamin] Anderson [at UCLA] seems to be very enticing.”1 But now in his May 22 letter to Hayek, Mises explained, “The development of events has become so worrisome, that most of my friends here in Geneva have strongly suggested that we leave Switzerland.” But the decision to leave Geneva was not an easy one. Mises told Hayek:
The decision to leave is truly difficult. For me, it represents saying good-bye to a life which I have always lived, it is for me an “adieu” to a Europe which is about to disappear forever. I firmly believe that the Allies will be victorious, but I also know that the Britain of tomorrow will be sharply different from the England of the Classical Liberals of yester-years. It will resemble Seipel’s Austria more than it will Victoria’s Empire.
