by Von Mises
[Title Page and Table of Contents]: Title page and table of contents for Ludwig von Mises' 1931 lecture on the causes of the economic crisis, outlining eight key sections including market function, the business cycle, and unemployment. [Nature and Function of the Market]: Mises critiques the Marxist view of 'anarchic' production, arguing that the capitalist market is actually a 'consumer democracy' where prices direct production toward the most urgent needs. He explains that entrepreneurs are merely executors of consumer wishes, and that any interference with market laws inevitably harms consumption and leads to economic disturbances. [The Business Cycle and the Current Crisis]: This section introduces the Circulation Credit Theory (monetary business cycle theory), explaining how bank-driven credit expansion artificially lowers interest rates below their natural level. This leads to a 'sham boom' and malinvestment of capital, which must eventually collapse into a crisis once the credit expansion stops or triggers a currency panic. [Unemployment and Wage Policy]: Mises argues that mass unemployment is a permanent phenomenon caused by trade union and government interference in the labor market. By forcing wages above the market-clearing rate and providing unemployment benefits that remove the incentive to adapt, these interventions prevent the natural coordination of labor supply and demand. He also refutes the idea that 'rationalization' or technical progress is responsible for joblessness. [Price Declines and Price Support Actions]: The author discusses how government attempts to support falling prices in raw materials and agriculture (such as wheat, coffee, and coal) prevent necessary market adjustments. These 'valorization' schemes and protective tariffs waste capital and turn increased productivity into a burden rather than a blessing for consumers, leading to industrial unprofitability and political tension. [Tax Policy and Gold Production]: Mises examines how high taxation on capital slows down capital formation and lowers real wages. He then addresses the 'gold production' argument, asserting that the crisis is not caused by a lack of gold but by price and wage rigidity. He warns against using inflation to 'trick' unions into lower real wages, as this only leads to further malinvestment and future crises. [Is There a Way Out?]: In the concluding section, Mises declares the failure of interventionist economic policy, which attempts to find a 'middle way' between capitalism and socialism. He argues that the only solution to the crisis is to restore the freedom of the market and cease all attempts to manipulate interest rates, wages, and prices, requiring a fundamental shift away from current political ideologies.
Title page and table of contents for Ludwig von Mises' 1931 lecture on the causes of the economic crisis, outlining eight key sections including market function, the business cycle, and unemployment.
Read full textMises critiques the Marxist view of 'anarchic' production, arguing that the capitalist market is actually a 'consumer democracy' where prices direct production toward the most urgent needs. He explains that entrepreneurs are merely executors of consumer wishes, and that any interference with market laws inevitably harms consumption and leads to economic disturbances.
Read full textThis section introduces the Circulation Credit Theory (monetary business cycle theory), explaining how bank-driven credit expansion artificially lowers interest rates below their natural level. This leads to a 'sham boom' and malinvestment of capital, which must eventually collapse into a crisis once the credit expansion stops or triggers a currency panic.
Read full textMises argues that mass unemployment is a permanent phenomenon caused by trade union and government interference in the labor market. By forcing wages above the market-clearing rate and providing unemployment benefits that remove the incentive to adapt, these interventions prevent the natural coordination of labor supply and demand. He also refutes the idea that 'rationalization' or technical progress is responsible for joblessness.
Read full textThe author discusses how government attempts to support falling prices in raw materials and agriculture (such as wheat, coffee, and coal) prevent necessary market adjustments. These 'valorization' schemes and protective tariffs waste capital and turn increased productivity into a burden rather than a blessing for consumers, leading to industrial unprofitability and political tension.
Read full textMises examines how high taxation on capital slows down capital formation and lowers real wages. He then addresses the 'gold production' argument, asserting that the crisis is not caused by a lack of gold but by price and wage rigidity. He warns against using inflation to 'trick' unions into lower real wages, as this only leads to further malinvestment and future crises.
Read full textIn the concluding section, Mises declares the failure of interventionist economic policy, which attempts to find a 'middle way' between capitalism and socialism. He argues that the only solution to the crisis is to restore the freedom of the market and cease all attempts to manipulate interest rates, wages, and prices, requiring a fundamental shift away from current political ideologies.
Read full text