Monetary Inflation and Price Inflation

Warren C. Gibson
The Freeman, Vol. 61, Issue 6
Foundation for Economic Education
July 2011

"Recently Fed Chairman Ben Bernanke said he was not worried about price inflation because investors are currently paying a very low premium for inflation-protected Treasury securities, adding, 'The state of inflation expectations greatly influences actual inflation.' Gerald O’Driscoll, well known in free-market circles and a former Fed official, retorted that Bernanke 'has the causation precisely backwards'. In fact the causation runs both ways. Market participants try to figure out what the Fed will do, and the Fed tries to figure out how it can influence expectations, and on it goes, back and forth. But as in the stock market, expectations may turn out to be wrong, and in the long run only the fundamentals matter."

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Analysis Report White Paper

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Watch Milton Friedman's classic example on why government cannot provide goods and services at no one's expense.

"Thomas Jefferson and Andrew Jackson understood 'The Monster'. But to most Americans today, Federal Reserve is just a name on the dollar bill. They have no idea of what the central bank does to the economy, or to their own economic lives; of how and why it was founded and operates; or of the sound money and banking that could end the statism, inflation, and business cycles that the Fed...

"On June 9, 2011 Professor Ivan Pongracic lectured at the Freedom University: Austrian Economics Summer Seminar. In this video Dr. Pongracic presents the ideas of public choice which Nobel Prize winning economist James Buchanan once referred to as 'politics without romance'.

Politicians and bureaucrats are not unique according to public choice theory. They operate like every other...

"Lawrence Reed has been the President of the Foundation for Economic Education since 2008. He presided over the Mackinac Center for Public Policy for its first twenty years and spent decades traveling to over 70 countries spreading the message of liberty.

In this episode of Reason.tv he's interviewed about how he first came to his politics in 1968 because of Czechoslovakia's 'Prague...

"The Austrian School of Economics has prevailed through time given the relevance it has gained in understanding the way markets really work. Peter Boettke has a conversation with Luis Figueroa regarding the importance of the philosophy of economics and explains the value of its premises. They discuss the process of thinking and understanding life through an economics point of view, as a result...

Listen to this audio version of the famous "Austrian Theory of the Trade Cycle".

"Does destruction create jobs? After natural disasters, terrorist attacks, and wars, some people argue that these disasters are good for the economy, because they create jobs and prosperity. As Prof. Art Carden of Rhodes College explains, this is an example of the 'broken window fallacy,' a term coined by Frederic Bastiat. When a shopkeeper's window is broken, he will spend money on a new...

In this engaging talk given at the 2010 Mises University, Hülsmann discusses Mises' family background, education, stages of professional live and some of his major works.

"The Atlas Network has partnered with the John Templeton Foundation on a new and important project — The Morality of Free Enterprise — that will build on the Templeton Foundation’s online conversation, 'Does the Free Market Corrode Moral Character?'

The Atlas Network’s 2011 Morality of Free Enterprise initiative focuses attention on the moral component of freedom by showing that free...

Peter Schiff, an economist who forecasted the most recent economic meltdown, delivers the Henry Hazlitt Memorial Lecture at the annual Austrian Scholars Conference. He speaks of the difference between economic theory and practice.

Primary Document

In this address, Mises discusses why Marxian socialism is antithetical to freedom.

"Here is Hans Hoppe's first treatise in English - actually his first book in English - and the one that put him on the map as a social thinker and economist to watch. He argued that there are only two possible archetypes in economic affairs: socialism and capitalism. All systems are combinations of those two types. The capitalist model he defines as pure protection of private property, free...

"When the IEA first published A Tiger by the Tail in 1972 it made a significant impact. At a time when events were vindicating Hayek's analysis, it reminded economists and policymakers that he had been consistently warning against Keynesianism for more than 40 years. He was awarded the Nobel Prize in Economics just two years later in 1974.

In the context of the present downturn and the...

This economic classic is noted for providing us with terms for and expositions of such key economic ideas as the division of labor, "invisible hand," self-interest as a beneficial force, and freedom of trade.

"This book, as its title indicates, presents an overview of basic Austrian theory. Its focus is on the free market or capitalist economy. The seminal works of the Austrian economists surely cannot be neglected for a deeper understanding of the topics herein discussed. These original works must be consulted, especially in order to obtain a thorough appreciation of the serious implications of...

"The main issue in present-day social and political conflicts is whether or not man should give away freedom, private initiative, and individual responsibility and surrender to the guardianship of a gigantic apparatus of compulsion and coercion, the socialist state. Should authoritarian totalitarianism be substituted for individualism and democracy? Should the citizen be transformed into a...

"Can we control the boom? This is really a complex of many questions. In an attempt to see the implications of our problem more clearly I found it necessary to ask first these three questions:

1. Do we know what a boom is and can we clearly identify a given situation as a boom?

2. If we know what a boom is and if we know how to identify it, do we know how it might be controlled...

"Ludwig von Mises described this as a 'monumental work' which 'is the most eminent contribution to economic theory'. He further stated that 'a man not perfectly familiar with all the ideas advanced in theses three volumes has no claim whatever to the appellation of an economist'. It is a work which made the modern intertemporal theory of interest rates possible." --Liberty Fund

"A reprint of Lachmann’s 1956 classic of Austrian capital theory in which he draws upon the work of Carl Menger, Frank Knight and Friedrich Hayek. In this book Lachmann shows how firms invest to position capital goods with one another, thus creating the complex capital structure. He shows how capital formation and adjustment is a continuous transformation which is immensely complex in its...

"This volume consists of 17 of Ludwig Lachmann’s most important papers published during the period 1940-73. Two of the articles appear here in translation for the first time. Prepared especially for this volume is a new essay about the present 'crisis' in economic thought. Walter Grinder’s extended introduction analyzes Lachmann’s scholarly career in four countries and his overall intellectual...

In this work, "Rothbard has collected Fetter’s journal articles and book reviews from the period 1897 to 1937 which cover the general topics of capital, interest, and rent."

Mises addresses two of the biggest misconceptions about capitalism; that things don't make people happy and that innovations brought about by capitalism are not enjoyed by everyone. 

"George Reisman was a student of Mises's, a translator of his work, and, as he demonstrates in this outstanding treatise, a leading theorist in the Misesian tradition. This mammoth exposition deals with the method and theory of economics, and particularly excels in its application to matters of policy. Its sections on price controls, money, banking, and environmentalism apply Misesian theory...

Kirzner delves into competition and the market process, as well as compares critiques of government regulation on competition and the market process from the "neoclassical" paradigm and the "Austrian" paradigm.

"The central argument of this Hobart Paper by Professor Hayek is that price level stability can be achieved only by removing from national governments their monopoly of money creation. Although price level performance in the years before the Paper's publication had been unsatisfactory worldwide (in Britain, for example, the cost of living had risen by just over 500 percent during the previous...

"There are many socialists who have never come to grips in any way with the problems of economics, and who have made no attempt at all to form for themselves any clear conception of the conditions which determine the character of human society. There are others, who have probed deeply into the economic history of the past and present, and striven, on this basis, to construct a theory of...

"Economic Freedom and Interventionism is both a primer of the fundamental thought of Ludwig von Mises and an anthology of the writings of perhaps the best-known exponent of what is now known as the Austrian School of economics. This volume contains forty-seven articles edited by Mises scholar Bettina Bien Greaves. Among them are Mises’s expositions of the role of government, his discussion of...

"Frédéric Bastiat has said that the Harmonies is a counterpart to Economic Sophisms, and, while the latter pulls down, the Harmonies builds up. Charles Gide and Charles Rist in a standard treatise, A History of Economic Doctrines, have referred to 'the beautiful unity of conception of the Harmonies,' and added, 'we are by no means certain that the...

"The present work is a felicitous introduction to Mises' ideas. They are, of course, elaborated more fully in Human Action and his other scholarly works. Newcomers to his ideas would do well, however, to start with some of his simpler books such as Bureaucracy, or The Anti-Capitalistic Mentality. With this background, readers will find it easier to grasp the principles of the free market and...

"A definitive defense of the methodological foundations of Austrian economics. Hoppe sets the praxeological view (economics as a purely deductive science) against positivism, while taking the critics of the Austrian approach head on. Hans-Hermann Hoppe rests his argument on the Kantian idea of the 'synthetic apriori' proposition, thereby expanding an aim of Mises's in the methodology section...

"An English translation of Bastiat's series of short essays in which he tries to correct common misunderstandings about the free market."

Henry Hazlitt's classic primer outlines a straightforward and accessible portrayal of free-market economics. An unshackled market, Hazlitt says, is the only path to "full production".

Jevons, one of the minds behind the Marginal Revolution, was also a philosopher of sound logic.

"Does it make sense that an economics publisher would bring out a book on logic? Certainly it does from a Misesian point of view. Logic is the method of economic thinking. Without it, indeed, economic theory is not possible."

"The purpose of this book is to establish the logical legitimacy of the science that has for its object the universally valid laws of human action, i.e., laws that claim validity without respect to the place, time, race, nationality, or class of the actor. The aim of these investigations is not to draw up the program of a new science, but to show what the science with which we are already...

Cantillon wrote one major work which was regarded by Jevons and Hayek as an important early contribution to the theory of marginal utility.

"Faustino Ballvé was a remarkable thinker and economist, educated in Spain and England and teaching and practicing law in Mexico City. He was here when Ludwig von Mises came to speak on a lecture tour. The talks that Ballvé heard sparked a new intellectual energy in him. He carried on a long correspondence with Mises himself, checking his education from graduate school against Mises's views....

"The third licence granted to the Austro-Hungarian Bank expired on Dec. 31 1910. It was at first extended provisionally, as it was impossible to reach a settlement between Austria and Hungary regarding the continuance of common currency and banking arrangements. In Hungary a strong majority, which the Government could not afford to ignore, insisted on the formation of an independent Hungarian...

"In For a New Liberty: The Libertarian Manifesto, Rothbard proposes a once-and-for-all escape from the two major political parties, the ideologies they embrace, and their central plans for using state power against people. Libertarianism is Rothbard's radical alternative that says state power is unworkable and immoral and ought to be curbed and finally overthrown." - ...

"A brief and succinct defense of free trade."

This paper presents, in non-technical terms, an 'Austrian' view of how a market economy works.

Mises explained economic phenomena as the outcomes of countless conscious, purposive actions, choices, and preferences of individuals, each of whom was trying as best as he or she could ... to attain ... wants and ... avoid ... consequences.

"Hundreds of thousands of Americans of all ages continue to enjoy this simple and beautiful explanation of the miracle of the 'invisible hand' by following the production of an ordinary pencil. Read shows that none of us knows enough to plan the creative actions and decisions of others."

The gold standard did not fail. The governments were eager to destroy it, because they were committed to the fallacies that credit expansion is an appropriate means of lowering the rate of interest and of 'improving' the balance of trade.

"If you are looking to acquaint yourself with F.A. Hayek's perspective on economic theory--beyond his business cycle and monetary studies of the interwar years--this is the best source. The collection appeared in 1947, before he moved on toward broader cultural and social investigations. It contains his most profound work on the liberal economic order, and his most penetrating reflections on...

"Here is the book that gave the Austrian School its name.

The famed Methodenstreit of the late 19th century was the battle of method. It pitted the emerging Austrian School against the German Historical School over a critically important question: what is the proper way to do social science? Here Carl Menger, the founder of the School, vindicates the importance of theory, and lays the...

"John Maynard Keynes, the man—his character, his writings, and his actions throughout life—was composed of three guiding and interacting elements. The first was his overweening egotism, which assured him that he could handle all intellectual problems quickly and accurately and led him to scorn any general principles that might curb his unbridled ego. The second was...

"The program of liberalism, therefore, if condensed into a single word, would have to read: property, that is, private ownership of the means of production... All the other demands of liberalism result from his fundamental demand."

"The academic contributions of Murray N. Rothbard (1926–1995) are legion, but he also had a passion for public persuasion. A free society can only be sustained if the general public is aware of the vital importance of the market and the terrible consequences of statism. That’s why Rothbard hoped to convince everyone about the virtues of the free economy. For Rothbard, educating the public was...

Man, Economy and the State provides a sweeping presentation of Austrian economic theory, a reconstruction of many aspects of that theory, a rigorous criticism of alternative schools, and an inspiring look at a science of liberty that concerns nearly everything and should concern everyone.

This historic tribute to Menken's economic legacy, written in Henry Hazlitt's "Business Tides" column, frames Menken as an important, but often misunderstood, libertarian.

As Mises outlines in this speech, many reject socialism and capitalism alike, advocating for a third way that avoids the disadvantages of either socialism or capitalism. This is the system of interventionism. The interventionist believes himself to be a mediator between the class of laborers on one side and the class of entrepreneurs on the other. Both parties, as the interventionist sees it,...

"The present book is squarely based on Mises’s personal documents in the Moscow archive and in the archive at Grove City College. I have also used relevant documents available from the Vienna Chamber of Commerce, the Akademisches Gymnasium in Vienna, the Graduate Institute of International Studies in Geneva, the Hoover Institution at Stanford University, as well as the materials that Mrs....

"Jevons’s formative 1875 classic work came into print at the height of interest in gold, silver, and international monetary standards. Refreshingly written, widely quoted, and authoritatively researched, the book begins with the origins of money and works its way through to international banking and credit. Of particular interest are the clear discussions of Gresham’s Law (Ch. VIII),...

"Nation, State, and Economy, published less than a year after Austria’s defeat in World War I, examines and compares prewar and postwar economic conditions and explicates Mises’s theory that each country’s prosperity supports rather than undercuts the prosperity of other countries. Mises’s humanitarian recommendations in this book, born from a classical liberal perspective, provide a striking...

"That the theory of value needs reforming from the very foundation no one will, I think, deny. The imperfection of the prevailing views is confessed even by their own adherents, But while the great majority of economists are still at a loss where to turn, a new theory has come to the front. At first unnoticed, and then for long but little thought of, worked out by men who, for the most part,...

"A collection of papers which explores methodoogy, econometrics, social cost, monopoly theory, the supply of money, interest theory, and macroeconomics. It contains papers by Lachmann, Egger, Rizzo, Kirzner, Littlechild, Armentano, O’Driscoll, Rothbard, Moss, Garrison, and Spadaro."

"Initially sponsored by the University of Chicago Chapter of the Intercollegiate Society of Individualists, the New Individualist Review was more than the usual 'campus magazine.' It declared itself 'founded in a commitment to human liberty.' Between 1961 and 1968, seventeen issues were published which attracted a national audience of readers. Its contributors spanned the libertarian-...

"Written in the same year that he testified before the Currency Commission in Austria-Hungary, and published in English in 1892, Carl Menger explains that it is not government edicts that create money but instead the marketplace. Individuals decide what the most marketable good is for use as a medium of exchange. 'Man himself is the beginning and the end of every economy,' Menger wrote, and so...

"While it is certainly clear that the stimulus bill failed to create a robust economy, I will not attempt to describe here any empirical simulations of the bill's impact (or lack thereof) on the economy. For better or worse, the ARRA was enacted because President Obama and Democratic majorities in the House and Senate believed that a large fiscal stimulus could...

"Pictures of the Socialistic Future (freely adapted from Bebel) (1891), is Richter's satire of what would happen to Germany if the socialism espoused by the trade unionists, social democrats, and Marxists was actually put into practice. It is thus a late 19th century version of Orwell's 1984, minus the extreme totalitarianism which Orwell had witnessed in Nazi Germany and Stalinist Russia but...

By short-circuiting the price mechanism and forcing people into economic lives contrary to their own choosing, central planning destroys the capital base and creates economic randomness that eventually ends in killing prosperity.

"In this anthology, Mises offers an articulate and accessible introduction to and critique of two topics he considers especially important: inflation and government interventionism. According to Mises, inflation, that is monetary expansion, is destructive; it destroys savings and investment, which are the basis for production and prosperity. Government controls and economic planning never...

"These seven works taken together represent the first integration and systematic elaboration of the Austrian theories of money, capital, business cycles, and comparative monetary institutions, which constitute the essential core of Austrian macroeconomics."

"In the beginning, there was Menger. It was this book that reformulated, and really rescued, economic science. It kicked off the Marginalist Revolution, which corrected theoretical errors of the old classical school. These errors concerned value theory, and they had sown enough confusion to make the dangerous ideology of Marxism seem more plausible than it really was.

Menger set out to...

"Economic conditions are constantly changing, and each generation looks at its own problems in its own way. In England, as well as on the Continent and in America, Economic studies are being more vigorously pursued now than ever before; but all this activity has only shown the more clearly that Economic science is, and must be, one of slow and continuous growth. Some of the best work of the...

"In this essay an attempt will be made to restate two crucial points of the explanation of crises and depressions which the author has tried to develop on earlier occasions. In the first part I hope to show why under certain conditions, contrary to a widely held opinion, an increase in the demand for consumers' goods will tend to decrease rather than to increase the demand for investment goods...

Essay embedded below.

About this volume of Hayek's collected works:

In 1931, when the young F. A. Hayek challenged the economic theories of John Maynard Keynes, sixteen years his senior, and one of the world's leading economists, he sparked a spirited debate that would influence economic policy in democratic countries for decades....

"In economics, just as in other sciences, it is by no means an exceptional occurrence to find that, no sooner has a 'new' doctrine made its mark, than earlier, completely forgotten writers are discovered who perceived those newly accepted ideas with brilliant insight in their own day and set them down in their writings. In our field Oresmius, Monchretien, Barbon, Rae, W. F. Lloyd, Cournot,...

In Social Economics, von Wieser puts the alternative-cost doctrine and the theory of imputation into practical application. The work is considered the first overall treatise of Austrian thought.

"This masterwork is much more than a refutation of the economics of socialism (although on that front, nothing else compares). It is also a critique of the entire intellectual apparatus that accompanies the socialist idea, including the implicit religious doctrines behind Western socialist thinking, a cultural critique of socialist teaching on sex and marriage, a refutation of syndicalism and...

Margaret Thatcher, then Prime Minister of Great Britain, delivers an address on a new dawn of free-markets and the failure of socialism.

"As we gather today, the third anniversary of the collapse of Lehman Brothers approaches. Even after all of that time, the U.S. economy continues to disappoint, and the U.S. labor market has hardly made any progress at all. The latest economic data suggests that growth has moderated considerably, while inflation is picking up, and fears of stagflation, not seen since the 1970s, are renewed....

"The substitution of laissez-faire capitalism for the precapitalistic methods of economic management has multiplied population figures and raised in an unprecedented way the average standard of living. A nation is the more prosperous today the less it has tried to put obstacles in the way of the spirit of free enterprise and private initiative. The people of the United States are more...

"The historical school of political economists in Germany, and the Austrian, or as it is frequently termed, the abstract, school are more nearly related than is at first sight apparent. Both follow the spirit of the age in rejecting speculative theory and in seeking their highest laurels on the field of observation. In art, as in science, naturalism must be distinguished from truth to nature,...

Here is a compilation of essays by Austrian school heavyweights Mises, Haberier, Rothbard, and Hayek. This edition offers an introduction and summary by Roger W. Garrison.

"The four essays in this volume, each written by a major figure in the Austrian school of economics, set out and apply a distinctive theory of the business cycle. The span of years (1932-1970) over which they...

"DAY by day it becomes more evident that the Coal we happily possess in excellent quality and abundance is the mainspring of modern material civilization. As the source of fire, it is the source at once of mechanical motion and of chemical change. Accordingly it is the chief agent in almost every improvement or discovery in the arts which the present age brings forth. It is to us indispensable...

"The purpose of this work is to allow the reader who is interested in some difficult economic topics to grasp them and the free-market viewpoint with very little effort. Having experienced the frustration of attempting to counter some of the statist viewpoints common in economic texts, news stories, and other works and in discussions without such a reference guide, I decided to produce just...

Hazlitt edited this 1960 volume of early reactions to Keynes at a time when most economists were devout Keynesians. For the most part, this book is a collection of writings by Keynes' earliest critics.

"Thinking like an economist has been a point of pride since Adam Smith. What often seems to be an endless muddle of political and social perspectives, pseudo-scientific analysis, journalistic advocacies, and financial matters from daily household concerns to the stock market, is suddenly illuminated once one discovers the economic point of view. Kirzner’s The Economic Point of View is a...

"A collection of papers from a Symposium on the economics of Mises held at the 44th meeting of the Southern Economics Association in Atlanta, Georgia on 15 November, 1974. There are articles by Laurence Moss, Fritz Machlup, Israel Kirzner, Murray Rothbard, William Baumgarth, and Karen Vaughn."

"The function of the entrepreneur cannot be separated from the direction of the employment of factors of production for the accomplishment of definite tasks. The entrepreneur controls the factors of production; it is this control that brings him either entrepreneurial profit or loss."

"Yet about the General Theory there is a strange paradox. The Keynesian literature has perhaps grown to hundreds of books and thousands of articles. There are books wholly devoted to expounding the General Theory in simpler and more intelligible terms. But on the critical side there is a great dearth. The non-Keynesians and anti-Keynesians have contented themselves...

"Hayek gives the main arguments for the free-market case and presents his manifesto on the 'errors of socialism.' Hayek argues that socialism has, from its origins, been mistaken on factual, and even on logical, grounds and that its repeated failures in the many different practical applications of socialist ideas that this century has witnessed were the direct outcome of these errors. He...

"A volume in the collection Studies in Economic Theory first published by the Institute for Humane Studies. This is a collection of papers given at a conference on Austrian economics in June 1974. They cover the uniqueness of the Austrian tradition, papers on praxeology and method, the history of Austrian school, capital theory, theory of money, inflation, and the market process. The papers...

"This is a collection of papers given at a conference on Austrian economics in June 1974. They cover the uniqueness of the Austrian tradition, papers on praxeology and method, the history of Austrian school, capital theory, theory of money, inflation, and the market process. The papers are by Edwin G. Dolan, Murray Rothbard, Israel Kirzner, Ludwig Lachmann, Gerald O’Driscoll, and Sudha Shenoy...

"This little essay offers something spectacular: an intellectual history of Mises's own tradition, with first person accounts of conversations with the greats. And truly, Mises turns out to have written the best single account of the origin and early growth of the Austrian School. Mises discusses the intellectual milieu in which the Austrian School began, and recalls a conversation he had with...

The Law, written by Frédéric Bastiat in 1850, was famously influenced by John Locke's Second Treatise of Government and went on to inspire Henry Hazlitt's Economics in One Lesson.

"Ludwig von Mises (1881-1973) was one of the leading free market economists of the 20th century and a great champion of individual liberty. This commentary is excerpted from his book, Human Action (Fox & Wilkes, 1996)."

"In one part of the present work we shall take up the theory of Capital as a Tool of Production, and in another the theory of Interest. But we shall first devote a separate book to the attempt to obtain some insight into what Capital itself is, in conception and nature."

Hayek's famous 1974 Nobel speech spoke to the "Pretence of Knowledge" within economics. As Hayek noted:

"It seems to me that this failure of the economists to guide policy more successfully is closely connected with their propensity to imitate as closely as possible the procedures of the brilliantly successful physical sciences - an attempt which in our field may lead to outright error...

"Frank Fetter's 1904 treatise, Principles of Economics, virtually impossible to find prior to this web edition, constructed a general theory of economics in the Austrian tradition that went unsurpassed until Ludwig von Mises's treatise of 1940, Nationaloekonomie. Yet Fetter, an American Austrian long before the interwar migration from Austria, has not received due recognition for his many...

"And in the real economic world, there is a free lunch, an extraordinary free lunch, and that free lunch is free markets and private property. Why is it that on one side of an arbitrary line there was East Germany and on the other side there was West Germany with such a different level of prosperity? It was because West Germany had a system of largely free, private markets - a free lunch. The...

"In The Road to Serfdom F. A. Hayek set out the danger posed to freedom by attempts to apply the principles of wartime economic and social planning to the problems of peacetime. Hayek argued that the rise of Nazism was not due to any character failure on the part of the German people, but was a consequence of the socialist ideas that had gained common currency in Germany in the decades...

"Economist Fritz Machlup was an early Misesian who wrote this book as an early study in the workings of the business cycle. In particular, he investigates and explains the relationship between expanding credit, monetary policy, and rising stock prices. The German edition was written in 1929 and published in 1930, and proved prophetic in every way. The English edition came out in 1940, with...

"W.H. Hutt’s Theory of Idle Resources was first published in 1939, surely one of the earliest responses to Keynes’s General Theory.

Hutt goes for the heart of Keynes’s prescription for recovery, which was to get idle resources moving, whether that is money, capital, or labor. If something isn’t being employed right now, it is being wasted.

Hutt responded at length that there is...

"In 1912, when Mises, at age thirty-one, wrote this landmark book, no monetary theory could be described as both securely founded on economic reality and properly incorporated into an analysis of the entire economic system. The Theory of Money and Credit opened new vistas. It integrated monetary theory into the main body of economic analysis for the first time, providing fresh new insights...

Jevon's 1871 work is considered the "final" exposition of the marginal theory of value, along with similar discoveries of Karl Menger and Lèon Walras. The "marginal revolution", as the progress was known, opened up a new era in the history of economic thought.

Mises argues that inflation will, of course, help business boom, but that the boom is artificial and will eventually collapse. Additionally, he reasons that simply lowering interest rates is not a good thing and that it distorts the market, that there are two classes of credit (Commodity and Circulation), and he discusses the function of prices, wage rates, and interest rates.

He...

"Written toward the end of Mises’s life, his last monograph, The Ultimate Foundation of Economic Science, returned to economics as a science based on human action. Mises believed that, since the publication of Human Action, economists and scientists alike had misinterpreted the idea of economics as a science by deeming it epistemological positivism—that they believed that the...

F.A. Hayek presents a very thorough analysis on the role of knowledge and infomation in societies, how it is transmitted in various societies and economic systems, how a lack of knowledge ultimately proves to be the downfall of central planning, and other key topics.

"This eleven-volume set of The Works and Correspondence of David Ricardo contains all of Ricardo’s published and unpublished writings, and provides great insight into the early era of political economics by chronicling Ricardo’s significant contributions to modern economics. The edition has been widely acclaimed as the best example, prior to the Glasgow edition of Adam Smith’s...

"Theory and History is primarily a critique of Karl Marx, his materialism, and his prediction of the inevitability of socialism. This book discusses the theory of economics, i.e., the study of purposive human action, and with history, the record of the past actions of individuals. History looks backward into the past, but the lesson it teaches concerns things to come. It opens the...

"[A] collection of essays by leading classical liberals and supporters of the free market from around the world who joined together to celebrate Mises’ accomplishments on behalf of liberty." Volume 2 is available here.

"Knut Wicksell was an important thinker of the second-generation marginalist school, and here is his detailed commentary on and elaboration of the capital theory of Eugen von Böhm-Bawerk. It was first published in 1893, but did not appear in English until 1954. But its appearance filled a gap in the history of economic ideas. He further defends the relationship between the natural rate of...

This is the most recent translation of Böhm-Bawerk's 1892 essay on why it is cost, not labor, that determines value.

In this excerpt from his work Man, Economy, and State, Rothbard describes the role of the entrepreneur in the economy. "We shall concentrate on the capitalist-entrepreneurs, economically the more important type of entrepreneur. These are the men who invest in 'capital' (land and/or capital goods) used in the productive process."

Rockwell--the founder and president of the Ludwig von Mises Institute--reflects on the Institute's contributions, works, and one of the Austrian School's unifying goals: abolishing the Federal Reserve.

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