THE GREAT DEPRESSION was an important time for the Austrian School; with worldwide unemployment at all-time highs, the need for economic solutions was critical. The work of Mises and Hayek on business cycles in the 1920s and 1930s was nothing short of prophetic: they were two of the very few who predicted the stock market crash in 1929. But their answer to the ills of the world economy -- that the depression was due to interference in free markets, and that it would take the free markets to recover -- couldnt compete with Keynesian ideas of public investment.
As the "Keynesian revolution" took hold, men like Mises, Hayek and Leo Schoenfeld-Illy continued to champion free markets with their economic theories. It would take 30 years for the world to come around.