At the opening of the Mises University, Tom Woods mentioned [video - audio] the description by Mises of Carl Menger's sadness over the decline of liberalism and the rise of statism in Europe. Here's what Mises said:
Around Christmas, 1903, I read Menger's Grundsätze der Volkswirtschaftslehre (Principles of Economics) for the first time. It was the reading of this book that made an "economist" of me.
Personally I met Carl Menger only many years later, He was then already more than seventy years old, hard of hearing, and plagued by an eye disorder. But his mind was young and vigorous. Again and again I have myself why this man did not make better use of the last decades of his life. The fact that he still could do brilliant work if he wanted to do so was shown by his essay, "Geld" ("Money"), which he contributed to the Handwõrterbuch der Staatswissenschaften (Encyclopedia of State Sciences).
I believe that I know what discouraged Menger and what silenced him so early. His sharp mind had recognized the destiny of Austria, of Europe, and of the world. He saw the greatest and most advanced of all civilizations [nineteenth and twentieth century Western Europe] rushing to the abyss of destruction. He foresaw all the horrors which we are experiencing today [1940, World War II]. He knew the consequences of the world's turning away from true Liberalism [not the contrary Leftist so-called liberalism in the United States] and Capitalism. Nonetheless, he did what he could to stem the tide. His book, Untersuchungen über die Methode der Socialwissenschaften und der Politischen Economie insbesondere (Problems of Economics and Sociology, translated by Francis J. Nock and edited by Louis Schneider) was meant as a polemic essay against all those pernicious intellectual currents that were poisoning the world from the universities of Great Prussia. The knowledge that his fight was without expectation of success, however, sapped his strength. He had transmitted this pessimism to his young student and friend, Archduke Rudolf, successor to the Austro-Hungarian throne. The Archduke committed suicide because he despaired about the future of his empire and the fate of European civilization, not because of a woman. He took a young girl along in death who, too, wished to die; but he did not commit suicide on her account.
My grandfather [on my mother's side] had a brother who died several years before I was born. The brother, Dr. Joachim Landau had been a liberal deputy in the Austrian Parliament and a close friend of his party colleague, deputy Dr. Max Menger, a brother of Carl Menger. One day Joachim Landau told my grandfather about a conversation he had had with Carl Menger.
According to my grandfather, as told to me around 1910, Carl Menger had made the following remarks: "The policies as conducted by the European powers will lead to a horrible war that will end with gruesome revolutions, with the destruction of European culture and the destruction of the prosperity of all nations. In preparation for these inevitable events investments only in gold hoards, and perhaps obligations of the two Scandinavian countries can be recommended." In fact, Menger had his savings invested in Swedish obligations. Whoever foresees so clearly before the age of forty the disaster and the destruction of everything he deems of value, cannot escape pessimism and psychic depression. What kind of a life would King Priam have had, the old rhetors were accustomed to ask, if at the age of twenty he already would have foreseen the fall of ancient Troy! Carl Menger had barely half of his life behind him when he foresaw the inevitability of the fall of his Troy.
The same pessimism overshadowed other sharp-sighted Austrians. Being Austrian afforded the sad privilege of having a better opportunity to recognize fate and destiny. Grillparzer's melancholy and peevishness arose from this source. The feeling of facing powerlessly the coming evil drove the most able and noble of all Austrian patriots, Adolf Fischhof, into loneliness.
For obvious reasons I frequently discussed Knapp's Statliche Theorie des Geldes (State Theory of Money) with Menger. His answer was, "It is the logical development of Prussian police science. What are we to think of a nation whose elite, after two hundred years of economics, admire such nonsense, which is not even new, as highest revelation? What can we still expect of such a nation?"
Of course, one can have hope in the long-term Christian Reconstruction of the world and still have reason to believe in the short-term judgment of statism in a particular nation or culture. Mises seems to have avoided Menger's "psychic depression," sustained perhaps by a sense of duty, an obligation to share knowledge and provide answers, even if the answers are rejected by a majority (1 Peter 3:15). Theonomy trumps eschatology.
In fact, the judgment of statism in history, while tragic in a human sense, is a vindication of God's Word, and thus a cause of hope and rejoicing. The Theocratically-meek shall inherit the earth, often after the fall of pride-blinded Troy.
Menger was a humanist.
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