586. How Does the Lost World of Vienna Still Shape Our Lives?

Stephen Dubner

Free economics Radio is sponsored by Robert Half. Robert Half research indicates nine out of ten hiring managers are having difficulty hiring. If you have open roles, chances are you are feeling this too. That's why you need Robert half. Their specialized recruiting professionals engage with their proprietary AI to connect businesses of all sizes with highly skilled talent in finance and accounting, technology, marketing and creative, legal and administrative and customer support.

At Robert Half, they know talent. Visit roberthalf.com. Today, free economics Radio is sponsored by Cars.com dot. Have you heard about the your garage feature on Cars.com dot? Here's how it works.

You add your car to your garage to track its market value and cash in. When the time is right to sell. Track both your car's historical and projected value when it's time to sell easily. Secure an instant offer from a local dealership or sell it yourself on cars.com dot. Start tracking your car's value with your garage on cars.com dot.

Once upon a time, there was a place that was so dynamic that it seemed as if the future had already arrived. They were trying to take all the most modern disciplines, physiology, medicine, mathematics, statistics, and apply all these new disciplines to building a new civilization. You may think I'm talking about someplace like ancient Athens or Alexandria, but no, this was much more recent, during the late 19th and early 20th centuries, and it didn't last. This dynamic place turned out to be a volatile place, and then a violent. One in a most comprehensive, ruthless manner.

Richard Cockett

The Nazis basically destroyed Vienna as a centre of scientific progressive opposition to national socialism. The great viennese writer Stefan Zweig, who killed himself in 1942, left behind a memoir called the World of yesterday. It is a heartbreaking book about a Vienna that, in retrospect, didn't stand a chance. It was a city built on modern thinking, in its art and its politics, in its embrace of science as a foundation of society. It was more modern than many places today that Vienna was wiped out.

Stephen Dubner

But as described in a new book, its legacy lived on, especially in the United States, in many areas of daily. Life, from music through philosophy to nuclear fission, biology, art therapy, the whole of psychoanalysis and psychology, and free market economics. Today, on an episode of the Freakonomics Radio Book Club, we speak with the author of this new book. We will ask why it's worthwhile to explore this vanished Vienna. Well talk about which of the city's rhythms still move us today.

Also, we will discuss, to paraphrase the investment industry, why a city's past performance is no indicator of its future results. So is this episode a celebration of lost history, or is it a cautionary tale? Maybe it's both.

Unknown

This is Freakonomics radio, the podcast that explores the hidden side of everything, with your host Stephen Dubner.

Stephen Dubner

I recently visited Vienna for the first time, just for a few days. Id always wanted to go. Some close friends of mine had parents or grandparents who were born in Vienna. They were the lucky ones, the ones who got out. Many others were killed in nazi concentration camps.

So I went to Vienna to see the sights, especially the art, but also to maybe catch a glimpse of some ghosts. The push to finally go to Vienna was provided by a new book called Vienna how the city of ideas created the modern world. It was written by Richard Cockett, an english author and senior editor at the Economist. I consider myself lucky if I read one book a year that really changes how I think about the world. In that regard, I am very lucky because the year is still young and I've already read such a book.

This book is not a great read, full of stories and drama. It's sort of an almanac, paragraph after paragraph, almost a roll call of people who had new ideas and tried, with varying degrees of success, to turn them into reality. That may sound as if it is a hopeful book. It is not. The big lesson for me, the thing that really changed my thinking was a realization of just how fragile a society can be and how the arrival of nationalism and fascism can ruin in a short time what took generations to build.

That seems like a lesson worth thinking about these days. But this wasn't even the idea that attracted me to the book in the first place. What attracted me at first was the book's basic premise, the claim that Vienna was a city of ideas that created the modern world. In making this claim, the book sprints through roughly 50 years during which Vienna exported an astonishing pool of talent to Europe and the US, talent in the social and physical sciences, in the arts and architecture, in marketing and design, and very much in economics. Here is Richard Cockett.

Richard Cockett

The claim is as much a provocation as the claim. It grabs the reader's interest. It's worked on you. The very first line of your book in the introduction goes like to hold that a european capital on the banks of the Danube lit the spark for most of western intellectual and cultural life in the 20th century, may sound like an absurdly extravagant claim. And yet, Richard, this is the flame that you choose to chase in this book.

Stephen Dubner

So persuade me in just a minute or two that this claim is indeed neither absurd nor extravagant. To support the claim, there are three main arguments one is the breadth of the viennese contribution. Other cities and other places produced outstanding achievements in certain fields, but it was the breadth of contribution that struck me about Vienna. Secondly, it was a way that all these things interlinked, and indeed all the people were interlinked. It was also the way that they thought their intellectual disposition.

Richard Cockett

This is all the economists of the philosophers and the artists and the physicians, they all basically shared the same education. People who were often called polymaths by those who met them in the west when they'd all emigrated. A huge percentage of these people went to the union university. Vienna, which was at the time, this is from the 1880s to the 1930s, was one of the most prestigious universities in Europe. It was totally different from what we now regard as a university, with all the specializations, the endless faculties, all subdivided into little bastions.

The University of Vienna only had four faculties. It had a faculty of law, a faculty of medicine and pharmaceuticals, the faculty of theology, and it had a faculty of philosophy. So notice, there no distinction between science and arts. The whole of the natural sciences, physics, maths, was in the faculty of philosophy, as was history, languages, politics. And I think that was hugely important, because to become a big austrian intellectual, as so many of them did.

The distinguishing feature is that they were able to roam over so many fields, all these viennese thinkers. Their natural disposition was to be engaged in the real world. If they were experts in statistics or in data analysis, if businesses asked them to apply those methodologies in order to sell more goods or to create more prosperity, the Viennese were extremely happy to do so, wanted to be involved in what we would now call policymaking in the public sphere. I am curious to know a bit about your career trajectory. First of all, I understand you have a PhD in history.

Stephen Dubner

What was your concentration? I studied history as an undergraduate at Oxford, and then I did a PhD in modern history, and then I was a senior lecturer at London University for six, seven years. After that, I was a british academy fellow. I only switched to journalism when I was 38. And why did you switch to journalism?

The reason I ask is that I wish it happened more. We have a lot of well trained academics in this country, in your country and elsewhere, who have a great depth of knowledge in a particular field. They don't often end up in journalism as you did, but I think it might make journalism stronger if they did. So why'd you do it? First of all, I'd written several books very quickly, one after another, I think four by that time.

Richard Cockett

And basically I'd kind of exhausted my interests. I needed new horizons, I needed new subjects, I needed new material. Secondly, I must say I was just bored in academia because, as you doubtless know, there's a lot of repetition and a lot of just repeating the same lectures and classes. You crossed over to the bright side, not the dark side. Yes, that's right.

I left the dark side, went over the bright side, and a decision which I've never regretted. If you could just describe the process by which you came to realize that you had a book idea here in Vienna. When I was young, I got a junior fellowship at the British Academy. My subject was the history of Thatcherism and reaganism, the intellectual roots of what I called the revival of economic liberalism, which I thought would be a kind of plain sail through various obscure british politicians and american economists. But pretty early on, I stumbled across the austrian economists, the viennese economists who actually were behind the whole thing.

Stephen Dubner

And you hadn't known that. I had not known that. I think I was aware of the name Hayek, Friedrich von Hayek, who sort of hovered over a lot of the discourse on Thatcherism. So I'd sort of heard of a few names. I had no idea of their influence or how they'd been working for 30, 40, 50 years before Thatcher was elected in 1979, Reagan at the end of 1980.

Richard Cockett

No idea on their profound and lasting influence on the revival of free market economics. The essential insight of Hayek, which makes him, I think alone, one of the great political economists of the 20th century. He argued that in a modern economy, information was becoming so devolved that a state run economy was logically impossible. And in as far as it was possible, it could only lead to bad outcomes. That is, the pernicious concentration of power leading to a totalitarian state.

And I think the growth of modern media, the growth of the Internet, growth of smartphones, everything supports his argument. I think that's a fundamental insight. Wikipedia was founded by a Hayekian and it diversified knowledge. The Encyclopedia Britannica is the old model where a couple of men in suits could sit down and compile knowledge. Here you go, 50 volumes of knowledge.

That's it, guys, from a to z. Wikipedia is the new model. Knowledge is so diversified that everyone can contribute, has to contribute to knowledge, because knowledge rests now in millions of individuals. I was a foreign correspondent, went abroad, wrote books about faraway places like Sudan and Burma. I was also writing for the economists, mainly about business subjects, politics, etcetera.

And it became very notable every time I went down to the core of a subject or was pointed in the direction of the founding book of the discipline, or the original thinker who thought the whole thing up. They were usually viennese, just to take a couple of examples. If you got interested in the entire fields of modern advertising or marketing, fairly soon you got to Ernst Dichter, who basically invented modern market research. Also the way that companies discover consumer preferences, applying psychology or psychoanalysis to consumer behaviour. We did a big piece in the economist on the history of shopping malls, and lo and behold, the first architect who created the first shopping mall, Victor Gruen, hailed from Vienna.

And then there were all the more obvious people, like Ludwig Wittgenstein, the philosophers, the mathematicians, Sigmund Freud, who was inventing psychoanalysis in the first 20 years or so of the 20th century. Ludwig von Mises, who essentially invented modern free market economics or reinvented it in 1920. What would 20th century Hollywood have been. Like without the Viennese, hugely influential in Hollywood? I was entirely ignorant of this before I started my book.

I had no idea that the golden age was dominated by so many. Billy Wilder was born in Vienna. Preminger, Preminger, Fred Zinnerman, who later did the day of the Jackal, etcetera. I mean, they invented film music. Eric Korngold, really the most admired film composer of his age, and invented the modern score, forerunner of John Williams and Hans Zimmer and all those film composers.

Stephen Dubner

We know today of film scoring. I can't help but think of that zither music in the third man. And the third man was a Vienna story. Yes. Yeah, absolutely.

Richard Cockett

That story of Vienna. And then, you know, the first great set designer was Viennese, and he did all Randolph Hearst's productions. And then there's Rudolph Bing, the opera impresario in New York City. But he really changed opera around the world. Friday was charged with the New York Opera.

That was after having invented Vienna for a festival in Britain modeled on the Salzburg festival. We haven't even mentioned Wilhelm Reich, the creator of the orgasmatron. As I dug further, you could find individual monographs on the work and contribution of these people as individuals, but nobody had gathered it all together and presented a kind of synoptic view. How were all these people interconnected? Why did they all come from this one relatively, of the small european capital at a particular moment in time, which ended very abruptly in 1938?

I thought it was one of those books that had to be written. And then when nobody did, I thought, well, I better do it. How much more diverse or cosmopolitan or how much more of a melting pot was Vienna, or even Austria but I sense it was mostly Vienna at that point than similar cities in eastern and central Europe. Enormously. This is the key to Vienna's success.

This is something for us to bear in mind in the contemporary world that Vienna was a city of immigration. Almost all the people I talk about, very few of their families, came from Vienna. They were usually second generation immigrants from some part of the austro hungarian empire. Many of them came from what is now Ukraine, the cities of Kiev and Liv. These produced an amazing array of mainly jewish young men.

And if they were young men and women, too, of talent, it was natural for them to go to the centre of the empire because that was known to be where they'd get the best education, the best opportunities, etcetera. Where did being viennese rank among most people, as opposed to being catholic or protestant or jewish, or from Bohemia or from Italy and so on? In our age of identity politics, people have begun to sort of use a cookie cutter view of Vienna, saying, ah, well, let's study the Catholics, the Jews, the women, the Bohemians, the etcetera, the Viennese themselves. The people I write about viewed themselves as Viennese, and that was exactly the virtue of the city, that for them, Vienna really was a melting pot. And what united them was the german philosophy of bildung.

By that they meant the democracy of the intellect, that if you studied, if you were educated, if you had that intellectual disposition, then there was an equality there that allowed you to prosper in this intellectual meritocracy, regardless of whether you were a Roman Catholic, a Protestant, a Bohemian, a Jew, a woman, et cetera, et cetera, and later on in many of their lives. So this would be towards the end of the 20th century. People who interviewed them kept on asking, well, what about your jewish identity? What about your feminist identity? All of them resisted such questioning.

They said, I wasn't a socialist or a this or a that. I was viennese. That was my identity. Can you think of another place now or previously, where a city or a place exerted that kind of influence on one's identity? I mean, I selfishly like to think that we New Yorkers are that to.

Some degree, I was going to say New York. Genuinely, I was. I think that's the other place. It's a city of immigrants. I also think of Barcelona a few hundred years ago.

Stephen Dubner

And of course, there are many places in the ancient world where many people from many places came. But you make it sound, Richard, so simple that they embrace this idea of bildung as a kind of what we might call today a growth mindset. Was it so simple? Was it just kind of in the water there? Well, that was the tradition.

Richard Cockett

It was the tradition of the german enlightenment, which had been basically developed since the late 18th century. So this had been a long time in the making. And they all honoured the same literary and intellectual, and indeed, very importantly, musical gods. Beethoven, Schiller, Goethe, the gods of the german enlightenment. They were all very heavily invested in the same canon of enlightenment views, which they thought was open to anyone who would invest in that tradition.

It was very democratic. It was not dependent on your birth, whether you came from an aristocratic family. It was about the value of intellectual achievement and education. So this pre world War one, Vienna, was a place of intellectual accomplishment. It was a place of beauty.

Stephen Dubner

It was a place of vibrancy. But moreover, perhaps it strikes me, it was a place of stability. We had this period in the modern world not that long ago that economists like to call the great moderation. Economists like to preach about the fact that all those financial crises and depressions, we figured out how to solve them. They're never coming again.

Richard Cockett

Then, of course, 2008. Exactly. So my senses at Vienna before World War one was like that. That's certainly the impression I get from reading Stefan Zweig. I mean, there was a lot of disruption in the visual arts, especially.

Stephen Dubner

There's Aegon Schiele's extremely intense and very sexualized paintings, which landed him in prison for a bit. Even Gustav Klimt, who started as a traditionalist, but then helped lead the secession movement. But my sense is that the broader culture and the politics and the economics of Vienna at that point seemed to be on very firm ground. Yeah, I would agree with that. There was a sense of achievement, of accomplishment, and of stability, but only to a degree.

Richard Cockett

A lot of people were very aware of all the problems underneath society, the inequalities, the rise of nationalism, the rise of anti semitism. I haven't come to any of that yet. This is what we call black Vienna. All that was becoming evident in the period 1900 to 1914. So the threats to liberal society were very clear.

There were riots, strikes, etcetera, as there was throughout Europe. The omens were there for people who cared to look, and quite a lot of people did look. You know, people refer to it as the golden age, even more so in retrospect. This is what Stefan Zweig writes about the world of yesterday, even more so in retrospect, because, of course, postwar Vienna, 1918, was so appalling. Anything before then looked like a golden age.

Stephen Dubner

Here is a passage from the world of yesterday by Stefan Zweig, which he finished just before he and his wife killed themselves in 1942. In its liberal idealism, the 19th century was honestly convinced that it was on the straight and unfailing path toward being the best of all worlds. Earlier eras, with their wars, famines and revolts, were deprecated as times when mankind was still immature and unenlightened. I now asked Richard Cockett for a brief history lesson. What happened to Vienna before and then during the First World War?

Richard Cockett

From the 18 1670s to 1918, it was the capital of the great Austro Hungarian Empire, reigned over by the Habsburgs and the great Franz Joseph I. Austria was defeated in the First World War and dismembered at the Treaty of Versailles. So the empire's broken up. But more importantly for Vienna itself, the empire was impoverished. When Vienna was separated from its empire from 1918 to about 1923, it was stalked by famine.

People were impoverished. They experienced the sort of hyperinflation that Weimar Germany was more famous for. So the emigration to Britain and particularly to the United States, it really starts then. People just have to get out. There are no jobs.

People are bankrupted, completely wiped out. All the savings of the middle classes are gone. So there's a lot of disenchantment, anger. Okay, so that gets us to this period of history called Red Vienna. Walk us through that.

Stephen Dubner

Vienna between the first and second world wars. What were the strong political currents? Who was trying to accomplish what and who was in opposition? Red Vienna was the moniker for Vienna during the period 1918 to 1934, when the city was ruled by a socialist city council. And the city council, the socialists were interested in trying to implement the most advanced program of democratic socialism of its time.

Richard Cockett

Because what they were trying to do in red Vienna was create what they called Denoi Menschen, a new human. And the new human would be a rational worker liberated from old fashioned notions of monarchy, imperialism, militarism. So the new person would be a new socialist man and woman for a new era where all the peoples of the world could unite. You make it sound a little bit creepy, Richard. I have to say, creepiness is a good word, because, of course, this was very directed.

They spent a lot of money on building council houses, endless clinics to improve everything from people's sex lives to maternity wards to hospitals, eradicating disease. But with a lot of rules. A lot of rules. You had to be assigned a certain time to come outside and beat your rugs, for instance. It really was the epitome.

One of the reasons this was so important is that people like Hayek, the later Thatcherite and reaganite economic liberals, they were living in Vienna during this time. They could see how you could improve the lives of people to a degree through this. But they also saw how restricting it could be and on how much power became invested in a very small number of socialist administrators. And when Red Vienna was applying all this science to daily life, what was happening outside of Vienna in Austria? And what was the rest of central Europe looking like?

Stephen Dubner

In other words, how much of an outlier was Vienna at this moment? Vienna was a small dot in a very conservative, bordering on fascistic nationalist pan German Austria and of course Germany itself. And what did the average fascist sympathizer or fascist think of Vienna? Vienna was the enemy. In fact, the very term red Vienna was coined by one such nationalist conservative opponent.

Richard Cockett

They regarded red Vienna as mad, dangerous and against all the values that they held. The rest of Austria was dominated by a very conservative small sea coalition of pan Germans, people who wanted Austria to be united with Germany, nationalists, proto fascists and Roman Catholics. Because the other thing of course was that red Vienna was markedly jewish. Only two cities in Europe had a higher proportion of Jews. It's also worth noting though that the intellectual Jews of Vienna of this period were almost overwhelmingly, extraordinarily assimilated.

Yes, that's right. 95% of these middle class Jews regarded themselves as assimilated Jews. They were viennese and they were Austrians. The famous artist story Nanz Gombrich used to argue about this much later when people said he used to come to him and say, we want to study the Jews of Vienna. What happened to the Jews of Vienna?

And he resented this. His answer to that, it was always that Hitler identified the Jews at Vienna. We didn't identify as Jews. A fascination of Vienna for many has been, you know, this dialectic between the modern progressive liberal ideas that Vienna became most famous for and the fact that it also incubated national socialism and fascism. One of its most famous sons was Adolf Hitler.

So Hitler was born in northern Austria but he came to Vienna before the First World War and that's really where he learnt his politics. He copied his style of politics, Nazism, off austrian forebears. The most famous of which was the mayor of Vienna in the years before 1914. A man called Karl Lueger. Lueger was the first european politician to mobilize anti Semitism as a political doctrine.

He realized that he could unite people around a nationalist pan german agenda and the glue on this would be anti Semitism. So he whipped up antagonism towards the Jews and blamed Jews for all ills, real and imagined, in the austro hungarian empire at the time. And Hitler acknowledges his debt to Lueger in all his writings. He, too, was a sort of unmarried leader of the people, a populist, if you like.

Stephen Dubner

In 1938, through a combination of political manipulation and military power, Hitler incorporated Austria into the German Reich. This was called the Anschluss, or annexation. A popular thing to do as a tourist today in Vienna is to stand beneath the so called Hitler balcony, the terrace of the Neueberg, where Hitler met the viennese public to announce his plan. Judging by the hundreds of thousands of people who turned out to greet Hitler in Vienna, the almost ecstatic reception he got, many, many Austrians supported the Anschluss and welcomed him back. And what was hitlers objective for Vienna at that moment?

Richard Cockett

The Nazis wanted to destroy Vienna as a center of intellectual opposition to national socialism. So they physically destroyed many of Vienna's institutes. They locked all the jewish, non aryan members of these institutes out of their own institutions. Many of them fled into exile. Some were killed later in the Holocaust.

And many of the viennese intellectuals, whether they were actually jewish or non jewish, it was perfectly clear which way politics was going to go after 1938. There was a stampede for the exits, basically, and everybody, if you were a liberal on the left, jewish, non aryan, tried to get out as quickly as they could. Could you imagine a counterfactual? Had Vienna somehow held against the Anschluss? Because you write about the period of red Vienna when the local government did rise, its own army, essentially its military corps, police.

Stephen Dubner

There was wealth there. There was great feeling for Vienna as a place worth defending. Was it even a little bit possible that Vienna might have somehow held well. Vienna was a city surrounded by Austria, and Austria as a whole. I mean, there are no opinion.

Richard Cockett

Poles will never know for certain. But the country as a whole was, at the very least, tolerant of the Anschluss, and a lot of the population were very provantulous. One point about this is that the treatment of the Jews in the days after the Angelus itself was so barbaric, it was so utterly awful, that no jew, no person could be in any doubt as to the ultimate aim of the Nazis to extinguish the jewish presence in Vienna. This is a very fundamental difference between the experience of Vienna and Berlin. When the Nazis took over in Berlin, they passed various laws, the Nuremberg laws, etcetera, which would gradually and legally exclude Jews from the commercial intellectual life of the country.

But they did it in stages over years, which allowed many people to think that this was not so bad, that they may change their mind. Etcetera. Destruction. And the horrors visited upon the viennese Jews when the Germans came in in March 1938 was so bad that everyone was persuaded there was no future for Jews in Austria. So virtually all of them tried to get out.

Which means, ironically, that there was a greater diaspora.

Stephen Dubner

After the break, who was in that diaspora, and what did they do in their adopted homeland of America? I'm Stephen Dubner. This is freakonomics Radio. We'll be right back.

Free economics Radio is sponsored by Amica Insurance. Amica Insurance is all about empathy. They know your auto, home, and life insurance are more than just policies. Home insurance is about protecting the life you've built. Auto Insurance is there to protect you on the road ahead.

That's why Amica takes a consultative approach to help protect what matters most to you. They are a customer owned insurance company that puts your needs first, and their representatives are available 24/7 for claim related matters. As Amika says, Empathy is our best policy.

Unknown

Take your business further with the smart and flexible American Express business gold card. It's packed with benefits to help unlock more value from your business purchases. That's the powerful backing of American Express. Learn more at american express.com businessgoldcard.

Stephen Dubner

Richard Cockett, an english author and journalist and former academic, recently published a book called Vienna how the City of Ideas created the modern world. He chronicles how the city's intellectual culture and educational worldview produced a bounty of great thinkers and doers in many fields. But as Vienna came under pressure from political opponents and was eventually gobbled up by Nazi Germany, many of those thinkers and doers fled, their ideas taking root elsewhere, particularly in the United States. One of the best was a sociologist called Paul Lazarsfeld, now credited with being the founder of modern empirical sociology. He was exactly one of those who started coming in the mid 1930s, and he became a sort of traffic conductor for the mid atlantic intellectual flows.

How and where did the viennese diaspora contribute to the allies winning World War two? The contributions to the war itself were fairly small. Many of them were interned in Britain, classified as enemy aliens. They really wanted to contribute, wanted nothing more than to fight back against the Nazis, but often found themselves frustrated. Now, in America, many of them, particularly the physicists, many of them were recruited to the american war effort and made very vital contributions.

Richard Cockett

Many of them were involved in the Manhattan project, but I argue it was really the Cold War where they came into their own because they wrote the theoretical defense of the west against communism that sustained western thinking through the Cold War. Several important books, above all Karl Popper's the Open Society and its enemies. Friedrich Hayek's famous book, the Road of serfdom, which described how liberal societies, if they weren't careful, could slide into totalitarianism. Joseph Schumpeter, describing the virtues of capitalism as against communism and socialism at a time when many of the young were swept away by the great victories of the Soviet Union and the Second World War, were embracing communism, or at least state socialism. So the Austrians were absolutely vital in coming to the defense of liberal capitalism at a time when that was deeply unfashionable.

Stephen Dubner

There was also a deep foundational understanding of psychology that seems as though it worked its way into everything the viennese diaspora did, from architecture to marketing to economics, even. Yes, I mean, Vienna was the birthplace of psychoanalysis, and this bore very heavily on this generation. Many of these Viennese who came over to America, they were soaked in the new disciplines. The most obvious person that represents this was the architect Richard Neutra from Vienna. And he combined modernism with the lifestyle of California and the materials of California.

Richard Cockett

If you came to neutra to build your house, he would give you a questionnaire about how you lived. It was like a process of psychoanalysis for the architect to understand your needs, because for him, a house was a place where you expressed your mind, your psychology, your body. And so he had to understand a person in that psychological sense. This was entirely novel. Let's go broad.

Stephen Dubner

What would the US look like today without that Viennese? Diaspora America probably would have looked quite different, because the Viennese bought certain specific disciplines and applying it to lots of subjects, lots of walks of real life that nobody had ever thought of applying it to before. They really did profoundly change the way that business, the whole of business, went about its work by thinking about products, how you package goods, how you sell your goods. They redesigned shop fronts, they invented the modern advertising industry, they invented focus groups, they invented the shopping. They were invested in and inventing pretty well every aspect of modern consumer culture.

A lot of things on that list, Richard. I could imagine many listeners saying, I could live without that or with less of that. In other words, consumer culture. Yes, it's easy to make the argument that it's gone too far. What's your position there?

Richard Cockett

Vince Packard did a famous book on this called the Hidden Persuaders, arguing that the Viennese, with all their new fangled psychological methods, etcetera, were manipulating you into buying stuff that you didn't really need. Or believing things that weren't necessarily in your best interest. Exactly. All for the purposes of wicked capitalism to increase other people's profit margins. He addresses this and he says that in the end, what they're doing is giving you the choice.

You can pay attention to all this, or you don't have to. True enough, but as we've seen in the last, let's say, 15 years, especially whether it's news or gossip delivered digitally or just online communities or games, there is a level of what some people call addiction. So is it possible that the Viennese were just too good at teaching us how to get people hooked? You know, the last of this generation died in the mid 1990s, so who knows what they would have said about today's addictions to social media, etcetera. I'm sure they would have been deeply involved in the psychology of this.

But as distinct from their reputation, many of them were advocates of a state that would regulate industries. They were not usually in favor of a free for all in letting industry do what it wanted, etcetera. Hayek, for instance, from early on, they were all in favor of a minimum state. And many of the Thatcherites, you know, the trade off was, you liberate industries, but they have to be regulated in the public interest. In Britain, for instance, that's how we are now organized.

They liberated the media, but there is a regulator called Ofcom, and it has powers to prevent concentration, to allow the diversity that the austrian school was so keen on. Although, oddly enough, many of these austrian economists and what we today would call political scientists, it would be quite a while before they achieved, I would say, influence and prominence. During the period 1945 to the early 1980s. There was what we now call the keynesian consensus in the United States and in Britain, the midway between the state collectivism of communism and freewheeling market capitalism. And the Austrians, they argued that this was a mirage, that the keynesian system was deeply flawed both in its economics and its politics, and could only end up shifting western societies more and more in an illiberal and anti democratic direction.

Stephen Dubner

And what, was there evidence that this was a mistaken ideology? Well, I think they'd seen it all before in red Vienna. They'd grown up, come to maturity in the cauldron of post 1918 Europe. They'd seen close up the baleful consequences of collectivism in Vienna, in Austria, and in Germany. So they were in no doubt as to the pernicious consequences of the over concentration of state power, of collectivism, and of restricting economic social freedoms.

I'm curious to know, having read all these books and having studied these thinkers, how surprised are you at the way that their ideas in economics and politics have become manifest in the US and in the UK? Does the reality seem in line with what they actually believed and wrote, or do you feel it's been to some degree warped? Well, two points here. The Viennese themselves thought that, above all, they were trying to get the British and the Americans to rediscover their own best nature. They were all huge fans of David Hume, Locke, Adam Smith, the liberal constitutions, founding fathers, the pragmatist tradition in America.

Richard Cockett

So basically what they were doing was trying to refashion Britain and America's own liberal economic traditions for a new era. With a nice helping of viennese scientific thinking. With a good dollop of viennese scientific technocratic thinking, adding some mathematics and econometrics fancy forecasting, the more perceptive critics of, say, road to serfdom when it first came out, I think the New York Times, the reviewer said all the way back in 1945, it's extraordinary that it takes a central european professor Hayek, to tell his anglo saxon audience what our best traditions are. But that is the truth. And that's why so many Viennese felt very at home, in Britain particularly, and also America.

They thoroughly admired the british and american constitutions, constitutional government, the rule of law. And whereas many post war radicals wanted to tear this all down and create new socialist societies, the Austrians, their main argument was that these societies were bastions of freedom and should be protected. I'm Steven Dubner. This is Freakonomics Radio. We will be right back to finish up with Richard Cockett, the author of Vienna how the City of Ideas created the Modern World.

Stephen Dubner

Free economics Radio is sponsored by Netsuite to reduce costs and headaches. Smart businesses are graduating to Netsuite by Oracle. Netsuite is the number one cloud financial system, bringing accounting, financial management, inventory and HR into one platform and one source of truth. With Netsuite, you reduce it costs because Netsuite lives in the cloud with no hardware required, accessed from anywhere. You cut the cost of maintaining multiple systems because you've got one unified business management suite and you are improving efficiency by bringing all your major business processes into one platform, slashing manual tasks and errors.

Over 37,000 companies have already made the move. So do the math. See how you will profit with Netsuite. Backed by popular demand, Netsuite has extended its one of a kind flexible financing program for a few more weeks. Head to Netsuite.com freak.

That's netsuite.com freak.

Free economics Radio is sponsored by Trugreen. Trugreen takes care of all the hard work it takes to get a great lawn so you can take care of everything else in your busy schedule. Trugreen is the easiest and most affordable way to get a beautiful lawn. All you have to do is water and mow, and they'll do the rest, weed control, fertilization, aeration, and more. So you can do literally anything else.

With Trugreen, you know you're in good hands because they are the official lawn care treatment provider of the PGA Tour. Trugreen offers a satisfaction guarantee, and they have a very verified best price promise, which guarantees you the lowest price with no compromise on quality. You do. You let Trugreen do your lawn care. Visit trugreen.com to get the best lawn at the best price with the best people guaranteed.

That's Trugreen.com.

What does it mean to be rich? Maybe it's less about reaching a magic number and more about discovering the magic in life. At Edward Jones, our dedicated financial advisors are the people you can count on for financial strategies that help support a life you love, because the key to being rich is knowing what counts. Learn more about our comprehensive approach to planning@edwardjones.com. Findyourrich Edward Jones Member SIPC.

Stephen Dubner

So, Richard, when you look around the world today, what would you say comes closest to Vienna at the peak of its powers? California, Silicon Valley? San Francisco? That in many ways is a similar concentration. It draws in people from all over the world.

Richard Cockett

There's a similar multiethnic, multicultural dynamism to the place and a creativity there, and an application of science, of maths, of pure thought and ideas to everyday devices, which I think echoes Vienna. Before Vienna, I'd say Medici. Florence would have been very similar in the Renaissance. And, you know, everyone coming to London or Manchester in the 1840s for cradles of modern capitalism. So you get these sparks, dainty, these cities, which exist for a little while.

The big thing for me about Vienna, only 30, 40 years before all this happened, it was a relatively small, provincial city. One of Austria's most famous exports in the last half century is Arnold Schwarzenegger. I knew you'd mention him. I'm just, I'm really curious, partly because my colleague, my co author Steve Levitt, interviewed him on his podcast, and I found it really interesting. And I never would have thought about Schwarzenegger as having anything to do with the intellectual foment of Vienna.

Stephen Dubner

But in retrospect, I think that there is something about him that is deeply, deeply, deeply, absolutely. I mean, his commentaries on the Trump era, they are all completely steeped in this history we've been discussing. At the storming of the Capitol on January 6, 2020, he says directly, look, I was brought up in a state reeling from a national socialist era where laws were trampled on, democracy was overthrown, etcetera. I have seen this. You have to realize how precious this is.

Richard Cockett

Dont let it happen here. A theme he returns to frequently. And his strand of republicanism. He was republican governor of California. Its all steeped with that social liberalism of progressive Vienna.

He is the very essence of a person shaped by what happened to Austria, what happened in Vienna, and then coming to the new world. And of course, usefully, he never dropped the accent. So he's never been able to disguise the fact that he actually does come from Austria. Richard, let me conclude by asking you maybe the most cliched question I could. But when you look back at this, a little over 100 years of history, to this peak Vienna period, the destruction, the unbelievable diaspora, the unbelievably influential diaspora, especially in the United States, what do you think of the key lessons to be learned?

It won't surprise you. I spent many years cogitating upon this. I'm glad you did. Don't be afraid of immigration. Immigration drives creativity.

Vienna is a very good example of the virtues of different people coming together. But there's a second thing which I think is very important, which I learned from all this. It's how the Viennese, the progressives, the liberals, all these great creative thinkers didn't notice the Russians of national socialism. They just somehow couldn't imagine it. If you want to protect this sort of culture, you have to be strong in your will to protect it.

It doesn't happen naturally. It doesn't continue naturally. You have to be radical in your commitment to protecting it. That this rich mixture of Vienna was destroyed by the Viennese themselves, by the forces opposing this cosmopolitan ethnic mix within the city itself. In a most terrifying and appalling way, we have popper, Freud and Hitler and Eichmann living in the same city, and it's easy to see in retrospect, who won in Vienna.

The other thing I would say, the other lesson is the intellectual environment that they created in Vienna. And I come back to what we were talking about before in terms of the universities and in terms of exposing the universities to a wider culture that was very, very important for them. And that's something I think that universities today really struggle with. I mean, it was extraordinary. You could see that when those three heads of the universities came up to Congress, wow, they've just collided with the real world.

And there was utter disconnect. Are you serious, you three? You can't see that you have to protect people on your campuses from this hate speech and genocide speech? And the same time the heads of those universities were saying, oh, you know, free speech, we have to be careful. Depends on the context.

You know, there was an utter non meeting of mind in Vienna. It was so much more fluid. It's interesting. It reminds me of another debate that you wrote about back in peak Vienna that is very common again today, which is the debate over language, what can and what cannot be said. Absolutely.

A lot of people in Britain, America found the Viennese very bracing. Direct. Yes. And even abrasive. I mean, I've experienced this.

It's quite a thing to have an intellectual argument with some of these viennese. Intellectuals, I would think, especially for an englishman. No offense. Especially for an englishman. Yeah.

The Viennese were often taken aside in England by their english interlocutors and said, now you might just dial it down a little bit. Can you be a little bit more moderate? And they tried to, but for them, it wasn't a problem because it was give and take. You know, this is my argument. Let's have yours.

Let's have a discussion. Von Mises famously said of his seminar where austrian economics was born, he famously said that it was through disagreeing with each other that we created the austrian school. So how do you disagree creatively? How can you moderate disagreements to create something good if you're both doing it in good faith? And I think the good faith point really matters.

And that's what they managed to do, because they were all invested in an intellectual moment where they all agreed on the basics of what they were trying to achieve and how they were trying to advance civilization. So there was a basic agreement there, which, you know, we must try and we must try and find. Again.

Stephen Dubner

I love what Richard Cockett just said there about the basic agreement of advanced, advancing civilization and how we must try to find it again. The Vienna weve been talking about today and celebrating was far from perfect. Among these big thinkers, there was plenty of arrogance and elitism and self interest and the idea of applying rational scientific thinking to every aspect of human life. Well, that could be disturbing. Were seeing that now in the debates around technology and especially artificial artificial intelligence.

Still, as I said earlier, this book really made me think. And for that, I am exceedingly grateful to Richard Cockett. It also made me realize that for all we may talk in our society, including on this show, about using rational thinking and data and common sense to help solve problems, to make our communities more livable and fair, all of that adds up to barely a whisper in the wind compared to the brute force of a government with a different agenda, or an autocrat who can undo generations of kindness and progress with a new set of laws and some secret police. Usually when we think about a lost world, it was many hundreds or even thousands of years earlier. But Vienna was lost not even 100% years ago.

When you read ancient history or biblical history, you're always coming across how such and such kingdom was sacked. You never stop to think what that really means, just how complete and brutal that was. I don't think it's my job to compare the brutality of one group of people to another from centuries earlier. But yeah, the sack of Vienna was brutal. And so what I was left with, especially after visiting Vienna, was a deep sadness.

I felt I was mourning the loss of this place that I'd never known. But I realize now that I did know it in the form of the many ideas that came out of Vienna and spread west. So that vanished place is a part of me, and I'm guessing at least some of it is a part of you. To think about its heyday is both thrilling and heartbreaking. To see Theodor Herzl's old bicycle hanging from the ceiling of Vienna's jewish museum, well, there are ghosts everywhere.

All those ghosts are now pressed between the pages of Richard Cockett's fine book. Thanks to him for writing it and for speaking about it with me today. Coming up next time on the show, the whole term inclusive capitalism drives me bananas because everyone talks about it and like, isn't this it? Freakonomics radio has been beating up on the private equity industry over the past few years. Next week, we talk to a big player in the industry who says he has introduced a valuable reform.

It has won him some fans. I think Pete's a good guy. I think his interest in helping workers is sincere. But yeah, you knew there was a but, didnt you? You have to look at private equity.

Overall and say, is this a force for good, for workers? And its massively not. Thats next time on the show. Until then, take care of yourself and if you can, someone else too. Freakonomics Radio is produced by Stitcher and Renbud Radio.

You can find our entire archive on any podcast, app or@freekonomics.com where we also publish transcripts and show notes. This episode was produced by Ryan Kelly. Our staff also includes Alina Cullman, Augusta Chapman, Dalvin Abawaji, Eleanor Osborne, Elsa Hernandez, Gabriel Roth, Greg Ripon, Jasmine Klinger, Jeremy Johnston, Julie Kanfer, Lyric Bowditch, Morgan Levy, Neil Carruth, Rebecca Lee Douglas, Sarah Lilly, and Zach Lipinski. Our theme song is mister fortune by by the hitchhikers. Our composer is Luis Guerra.

As always, thank you for listening. Give us a sense of how all these good things flowed into this one place. I will, but before that, I'm gonna take my jumper off.

Unknown

The Freakonomics radio network the hidden side of everything.

Stitcher.

Unknown

Hey parents, Greenlight is here to take one big thing off your to do list teaching your kids about money. With a greenlight debit card and money app of their own, kids and teens learn to earn, save, and invest. You can send money instantly, set flexible controls, and get real time notifications of your kids money activity. Set up chores and put allowance on autopilot to reward them for their hard work. Then learn about the world of money together.

Get one month free when you sign up@greenlight.com. Podcast whether you're a morning person or a bedtime procrastinator, everyone deserves a mattress that works for their style. And you'll find the best mattress for you at Ashley. The new Tempura DaP collection at Ashley brings you one of a kind, body conforming technology, making every sleep tailored to be your best. The collection also features cool to the touch covers and motion absorption to help minimize sleep disruptions from partners, pets or kids.

Shop the all new Tempura DaP collection at Ashley in store or online@ashley.com. Ashley for the love of home, you can live out your MasterChef dreams when you find a professional on Angie to tackle your dream kitchen remodel. Connect with skilled professionals to get all. Your home projects done well. Visit angie.com dot.

You can do this when you angie that.

586. How Does the Lost World of Vienna Still Shape Our Lives?

Primary Topic

Episode Summary

Main Takeaways

Episode Chapters

1. Introduction to Vienna's Impact

2. The Destruction of Vienna

3. The Legacy of Viennese Culture

Actionable Advice

About This Episode

People

Books

Guest Name(s):

Content Warnings:

Transcript