With the end of the Austro-Hungarian empire in 1918, Austrian School economists found themselves battling a more pronounced socialist influence in European politics and society. Ludwig von
Mises and Joseph Schumpeter remained two of the most prominent champions of free-market policies through the 1920s, with Schumpeter being the first to proclaim the entrepreneur as the central actor of economic change.

When Mises began his famous Privatseminar in Vienna, he laid the intellectual groundwork for an entire new generation of Austrian School thinkers. Men like Friedrich A. von Hayek, Oskar Morgenstern, Fritz Machlup and Gottfried von Haberler all studied with Mises. The work of this next generation would again bring the theories of the Austrian School to the world stage.