Monetary Inflation and Price Inflation

The Austrian school legend Ludwig von Mises battled socialism and statism throughout the early 20th century and two world wars. Read this short summary of his life and contributions.

A refreshing profile of economics professor Boettke at George Mason University, who is spearheading the Austrian school revolution.

"I’ve long promised a post on Austrian Business Cycle Theory, and here it is. For those who would rather get straight to the conclusion, it’s one I share in broad terms with most of the mainstream economists who’ve looked at the theory, from Tyler Cowen, Bryan Caplan and Gordon Tullock at the libertarian/Chicago end of the spectrum to Keynesians like Paul Krugman and Brad DeLong.

To sum...

In this article, Boettke outlines what he sees as the ten propositions important to understanding the thoughts behind the "Austrian school". Fundamentals to Austrian economics center around individualism, subjectivity, the market order, and the role of prices.

"Ever since Adam Smith, of course, economists have rejected this untutored view of the market. Despite drastically differing assessments of the usefulness of government regulation, economists have, within a variety of paradigms, been compelled to take at least some account of those regularities in markets which, for Smith, reflect the benign results of the '...

Would government interventionism be made more difficult without the aid of a central bank? This article takes a look at the authority and discretion given to government banking policy.

"If a time machine whisked America’s Founding Fathers from Philadelphia on July 4, 1776, to the Bureau of Engraving and Printing in Washington, D.C., on Independence Day, 2011, what might they think? Watching high-speed presses spew giant sheets of greenbacks would dazzle the eyes of even Benjamin Franklin, a professional printer. Beyond that, though, they would feel skin up their noses."

Koerner discusses the rising popularity of the Austrian School and contrasts it with Modern Monetary Theory.

"Austria’s proud intellectual tradition suffered an enormous blow from Nazism and World War II. Kurt T. Leube on the postwar efforts of Friedrich von Hayek to revive that tradition, especially in economics."

"Recently there has been another breakthrough in describing the interaction between political authorities and private interests. Economist Fred S. McChesney of Northwestern University noticed that many payments by private parties to legislators could not be explained as efforts to obtain economic rents at public expense through legislation. Instead, the parties making the payments were simply...

"Although the phrase 'nation-building' sounds much more constructive and well-intentioned than the destruction and death that have normally accompanied the use of American power, the reality is that attempts to build nations are likely to fail. What the nation-builders overlook is a distinction made by Ludwig von Mises almost 100 years ago: A nation is not necessarily the same as a 'state.' In...

"Paul Krugman gave a presentation in Cambridge at a conference to celebrate the 75th anniversary of Keynes's General Theory of Employment, Interest and Money. He titled his presentation 'Mr. Keynes and the Moderns' and in it he walks through the basic argument for what I will call 'nuts and bolts Keynesianism' as opposed to either Chapter 12ers or the Samuelsonian synthesis. In the process,...

Frederic Bastiat and the "Broken Window Fallacy" explain why government cannot in fact "create" jobs.

"Anyone who doubts the world's central banks' ability to send excess liquidity sloshing around the globe only has to look at the recent boom in the area of art and luxury goods.

It's always the case that cheap money flows to malinvestment.

While the monetary authorities look to create jobs on Main Street, the money inevitably flows to the latest speculative fashion, whatever it...

"The term 'supply-side economics' is used in two different but related ways. Some use the term to refer to the fact that production (supply) underlies consumption and living standards. In the long run, our income levels reflect our ability to produce goods and services that people value. Higher income levels and living standards cannot be achieved without expansion in output. Virtually all...

"Most supporters of the free market agree that high taxes are harmful to overall living standards and economic activity. But it is often less than clear why this is, even to opponents of taxation. In this think piece, Terry Arthur uses insights from the Austrian school to demonstrate clearly why it is that taxes are so bad, and that anybody who believes in free trade between countries cannot...

Although members of the Austrian or Chicago schools of economics agree on many free-market points, there are important differences in their approaches. Murphy outlines variations in the way these economists view methodology, the business cycle, and the law.

"The Great Depression created a widespread misconception that market economies are inherently unstable and must be managed by the government to avoid large macreconomic fluctuations, that is, business cycles. This view persists to this day despite the more than 40 years since Milton Friedman and Anna Jacobson Schwartz showed convincingly that the Federal Reserve’s...

"Economist and Hoover honorary fellow Friedrich Hayek spent seven decades extolling the supremacy of capitalism over socialism. For most of those decades, Hayek was a voice in the wilderness. Yet as John Cassidy argues, by the end of his life Hayek was vindicated to such an extent that "it is hardly an exaggeration to refer to the twentieth century as the Hayek century."

The famous Chicago School economist Milton Friedman reflects on the obligations of business. What does it mean when businesses speak of "social responsibility"?

"Many people think life without the welfare state would be chaos. In their minds, nobody would help support the less fortunate, and there would be riots in the streets. Little do they know that people found innovative ways of supporting each other before the welfare state existed. One of the most important of these ways was the mutual-aid society."

"Inflation as measured by the Consumer Price Index (CPI) has been almost nonexistent for several years, though it started creeping higher in the first half of 2011. Yet many prices have been rising at double-digit percentage rates. Are official figures trustworthy? And what of expectations? There is a great deal of buzz right now about inflation but also talk of renewed stagnation with the Fed...

"Austrians view economics as a tool for understanding how people both cooperate and compete in the process of meeting needs, allocating resources, and discovering ways of building a prosperous social order. Austrians view entrepreneurship as a critical force in economic development, private property as essential to an efficient use of resources, and government intervention in the market...

Caplan, an economics professor at George Mason University, outlines why he no longer considers himself an Austrian. He maintains that Austrians do not properly understand neoclassical economics and are too dismissive of its discoveries.

"The above cycle diagram is a map of the Austrian Economics Framework. This diagram attempts to capture all the aspects of the Austrian Economic view. Working as a cycle, an interruption as indicated by the red connectors, illustrates a blockage of the entire economic cycle. The implication of this cycle demonstrates reform of any economic system must involve this cycle as a whole."

"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...

"Another update to the chart used by the Obama administration to promote its stimulus package. (Real figures charted as red dots.) Professor Steve Horwitz says that it's time to call it a failure. It's hard to disagree. Even on its own terms, the stimulus has not delivered the jobs promised. In fact, the situation is worse than the projection of unemployment without the recovery plan.

...

"As you can see, we have been struggling to get back to average growth rates and we have not enjoyed any of the above-average growth that normally follows a recession.

The key question, of course, is why growth has been anemic, resulting in (what seems to be) a permanent loss of output. In his presentation, Lucas warns that bad government policy is playing a big role. He says that 'the...

"Some people recite history from above, recording the grand deeds of great men. Others tell history from below, arguing that one person's life is just as much a part of mankind's story as another's. If people do make history, as this democratic view suggests, then two people make twice as much history as one. Since there are almost 7 billion people alive today, it follows that they are making...

Most economists--particularly Keynesians--place a great emphasis on the role of large-scale "scientific" models" to calculate economic behavior. But does such "science" really symbolize economic progress and an understanding of the market? G.R. Steele deconstructs this notion. Instead, he discusses the "rational economic man", for "to behave economically is to behave rationally." Even so,...

"This Spring 2005 issue completes our Centenary celebration. Entitled 'Ayn Rand Among the Austrians,' the present symposium is centered on Rand’s relationship to the Austrian school of economics. A rather heterodox approach to economics, the Austrian school was founded by Carl Menger in the nineteenth century and was exemplified in the twentieth century by such theorists as Ludwig von Mises, F...

"Income inequality measures don't tell us much about poverty and, as this report argues, can actually mask declines in living standards of the poor. Furthermore, there is no good reason to use country-specific inequality measures as opposed to a global measure; if the latter is used, prioritites for poverty reduction shift dramatically. This report argues against the current fashion for using...

"Here, after reviewing Hülsmann’s argument, we will argue that it is in fact more general and can be applied to contrast the same scenario (changes in monetary demand) under two different institutional systems under free banking: 100% reserves vs Fractional Reserve Banking. We then go on to show that this contrast undermines one of the chief claims made for the asserted economic benefits of...

This careful and succinct overview by the current Foundation for Economic Education president offers an Austrian school, free-market perspective on the Great Depression. Indeed, many of our modern day assumptions about the Great Depression may be skewed.

"Professor Miller does not offer his account of The Constitution of Liberty as a substitute for reading Hayek; rather, it is designed to be a guide to the central argument of Hayek’s work and therefore belongs on the bookshelf alongside Hayek. It is written at a level accessible to the novice and simultaneously substantial enough to be of value to the specialist. Miller both provides an...

"Many economists argue that a pure market economy cannot come about because people will always have incentives to use coercion. We maintain that these economists leave out an important factor in social change. Change can come about by altering incentives or preferences, but since most neoclassical economists ignore changing preferences, they too quickly conclude that change is impossible....

"Economist Knut Wicksell made his name among the Swedish public with a series of provocative lectures on the causes of prostitution, drunkenness, poverty, and overpopulation. A malthusian, the young Wicksell advocated birth control as the cure for these social ills. His image as a radical social reformer did much to attract the attention of the press and the Young Socialists with whom he...

"Ludwig von Mises was one of the last members of the original austrian school of economics. He earned his doctorate in law and economics from the University of Vienna in 1906. One of his best works, The Theory of Money and Credit, was published in 1912 and was used as a money and banking textbook for the next two decades. In it Mises extended Austrian marginal utility theory to money, which,...

"Ludwig von Mises was one of the greatest economists and political scientists of the twentieth century. He revolutionised the understanding of money, inflation and recessions; comprehensively refuted the arguments for socialism; and provided a devastating critique of the methodologies of mainstream economics. His contributions to the Austrian School laid the intellectual groundwork for...

"This article suggests the potential feasibility of combining doctrines from Austrian economics and Objectivism in an effort to develop the strongest possible conceptual and moral case for a free market society. I argue that Austrian economics and Objectivism can benefit from each other’s insights and that the two schools have more in common than heretofore has been appreciated. My conclusion...

"As a historian, I have long been interested in applying the insights of Austrian theory to the interpretation of business cycles as they have occurred in history. In pursuing this endeavor, I have encountered what I believe are a number of problems with Austrian business cycle theory. Although brought into relief by historical inquiry, the problems themselves are not historical. On the...

"According to the Objectivist value theory of Ayn Rand, values are objective and relational. By contrast, most adherents of the Austrian school of economics believe that subjective value theory is one of its main features and basic strengths. As it turns out, some Austrians seem to have held or hold that values are relational, while others have held or hold different views.

In this...

"This short book is an accessible introduction to liberty – one of the key concepts of political and economic thought. It explains why liberty is so important and sets out in clear language the benefits of freeing individuals from big government. The guide consists of ten concise chapters, each focusing on a particular aspect of liberty and written by an expert in the field. The authors show...

"The deflationist’s focus on bank credit deflation is misplaced because of a basic misunderstanding of how credit affects prices. A fall in the amount of bank credit can only affect prices-in-general when it leads to a reduction in the amount of fiduciary media, and only when the decrease in fiduciary media causes a contraction in the money supply, and, furthermore, only when the fall in the...

Many supporters of free trade often support free immigration. Hans-Herman Hoppe argues there is a significant difference between these positions, despite similar economic benefits. Countries should adopt free trade but restrict immigration. He argues that free trade requires a contract. Party A buys a good from Party B. This ensures the transaction is voluntary and respects property rights....

"The Austrian School of economics-the causal-realist, marginalist, subjectivist tradition established by Carl Menger in l87l-has experienced a remarkable renaissance over the last five decades. It is not always clear, however, exactly what distinguishes the Austrian School from other traditions, schools of thought, approaches, or movements within economics and its sister disciplines. This...

"Austrian economics is a valuable resource for historians. Scholars informed by Austrian insights can make better sense of historical phenomena, and can provide far better insight into economic history, than those who lack this background. It is impossible to understand events such as the Great Depression with the assistance of no theory at all, so it is essential that the historian adopt the...

"The freedom-minded Nobel economist FA Hayek wrote a famous article on 'Why I am not a Conservative'. But ASI's Dr Madsen Pirie disputes Hayek's self-evaluation, and explains why he was wrong."

"It was this most fundamental of all economic propositions that Keynes deliberately and willfully destroyed. Say’s Law has, for all practical purposes, now disappeared from economic discourse and policy. And until it returns, the ability for the economics profession to provide sound and sensible advice during recession will remain sharply constrained. But to understand what Say’s Law means one...

In this lecture, Hoppe argues that the Founders made a fatal mistake by enshrining both the power to tax and the ability of anyone to participate in politics and become part of government (i.e. democracy) into the American Constitution. This has led to a constant violation of property rights and aggression against citizens. He offers private alternatives to state-...

"Hayek was one of the most important free market economists of the 20th century, winning the Nobel Prize for Economic Science in 1974. He was a member of the 'Austrian school of economics', taught at the London School of Economics and the University of Chicago, wrote extensively on banking and monetary theory, the socialist calculation debate, and the theory of spontaneous orders."

"Pete Boettke, of George Mason University, talks with EconTalk host Russ Roberts about the origins and tenets of Austrian economics. This is a wonderful introduction to how the so-called Austrian economists look at the world and how they continue to influence economics today."

"Pete Boettke of George Mason University talks with EconTalk host Russ Roberts about the life, work, and legacy of Ludwig von Mises. Boettke outlines Mises's most important contributions to economics--business cycle theory, the socialism/calculation debate, and the application of economics to a wide range of behavior beyond the financial. Boettke discusses how Mises fits into the Austrian...

"Bruce Caldwell of Duke University and the General Editor of the Collected Works of F. A. Hayek, talks with EconTalk host Russ Roberts about Hayek, his life, his ideas, his books, and articles. The conversation covers Hayek's intellectual encounters with Keynes, Hayek's role in the socialist calculation debate, Hayek's key ideas, and a discussion of which of Hayek's works are most accessible...

"Don Boudreaux, of George Mason University, talks with EconTalk host Russ Roberts about the microfoundations of macroeconomics and the Austrian theory of business cycles. Boudreaux draws on Erik Lindahl's distinction between microeconomics and macroeconomics, emphasizing the difference between individual choices and the coordination of economic activity. Other topics include the Austrian view...

"Larry White of George Mason University talks with EconTalk host Russ Roberts about Hayek's ideas on the business cycle and money. White lays out Hayek's view of business cycles and the role of monetary policy in creating a boom and bust cycle. The conversation also explores the historical context of Hayek's work on business cycle theory--the onset of the Great Depression and the intellectual...

"Econstories.tv is a place to learn about the economic way of thinking through the eyes of creative director John Papola and creative economist Russ Roberts.

In Fear the Boom and Bust, John Maynard Keynes and F. A. Hayek, two of the great economists of the 20th century, come back to life to attend an economics conference on the...

The video discusses the battle over economic philosophy and policy prescriptions throughout the 20th century, especially focusing on the ideas of Hayek, Keynes, and Marx.

"A couple of years ago, I did some spontaneous interviews with economists that concerned Hazlitt’s Economics in One Lesson. They proved more popular than I ever imagined that would become. I’ve had many requests for a single link that compiles them all. This is that link."

This video shows various clips of Keynesians Ben Bernanke and Paul Krugman, and Austrians Peter Schiff and Ron Paul from before, during and after the 2008 financial crisis.

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

"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...

"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...

"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...

"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...

"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 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...

"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...

"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...

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."

"Joseph Alois Schumpeter (1883 - 1950) was an Austrian-American economist and political scientist. He popularized the term 'creative destruction' in economics. Schumpeter's most popular book in English is probably Capitalism, Socialism and Democracy. This book opens with a treatment of Karl Marx. While he is sympathetic to Marx's theory that capitalism will collapse and will be replaced by...

"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...

"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...

"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...

"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...

"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....

"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." - ...

This famous allegory, written by the founder of the Foundation for Economic Education in 1958, has long been regarded as a simple and inspiring illustration on behalf of the free-market. The 50th anniversary edition also includes an introduction by the current FEE president and an afterword by Nobel laureate Milton Friedman.

"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...

"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 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...

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.

"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....

"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...

"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."

"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...

"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...

"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...

"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...

"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...

"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,...

"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...

"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 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,...

"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...

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.

"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."

"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...

"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 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...

"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)."

Hayek's famous 1974 Nobel speech spoke to the "Pretense 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...

"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...

"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...

"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...

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...

"What is the problem we wish to solve when we try to construct a rational economic order? On certain familiar assumptions the answer is simple enough. If we possess all the relevant information, if we can start out from a given system of preferences, and if we command complete knowledge of available means, the problem which remains is purely one of logic. That is,...

"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...

"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...

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."

"Stressing verbal logic rather than mathematics, Israel M. Kirzner provides at once a thorough critique of contemporary price theory, an essay on the theory of entrepreneurship, and an essay on the theory of competition. Competition and Entrepreneurship offers a new appraisal of quality competition, of selling effort, and of the fundamental weaknesses of contemporary welfare economics.

"Must we always remain agnostic about the causes of booms and busts? Is it really true that business cycles are rooted deep within the free-market economy, and that therefore some form of government planning is needed if we wish to keep the economy within some kind of stable bounds? Do booms and then busts just simply happen, or does one phase of the cycle flow logically from the other?

"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 of...

"'Elements of Pure Economics' was one of the most influential works in the history of economics, and the single most important contribution to the marginal revolution."

"Mad about Trade is the much-needed antidote to a rising tide of protectionist sentiment in the United States. The book explains the benefits of free trade and globalization for middle-class, Main Street Americans exposed to a barrage of negative claims from politicians and commentators such as Lou Dobbs. It offers a spirited defense of free trade and globalization that engages the populists...

"Though Austrian economics has focused almost exclusively on microeconomic concerns such as price coordination and entrepreneurship, Horwitz looks at three distinct macroeconomic issues that have been pursued by Austrian economists in the post-revival years. They are the extensions of the Mises-Hayek theory of the trade cycle, the idea of free banking or a completely market-driven monetary...

"The principal findings of experimental economics are that impersonal exchange in markets converges in repeated interaction to the equilibrium states implied by economic theory, under information conditions far weaker than specified in the theory. In personal, social, and economic exchange, as studied in two-person games, cooperation exceeds the prediction of traditional game theory. This book...

"The major social problems of the United States—deteriorating education, lawlessness and crime, homelessness, the collapse of family values, the crisis in medical care—have been produced by well-intended actions of government. That is easy to document. The difficult task is understanding why government is the problem. The power of special interests arising from the concentrated benefits of...

This is the blog "where orders emerge." Economists Don Boudreaux and Russ Roberts of George Mason University post about current evens, from their insightful economic view.

This project of the Liberty Fund is a wonderful resource dedicated to promoting the study of economics and liberty. It offers a variety of materials accessible to students, teachers, researchers, and economic enthusiasts. Some favorite features include the EconTalk podcast series and the Online Library of Liberty.

"The mission of IHS is to support the achievement of a freer society by discovering and facilitating the development of talented students, scholars, and other intellectuals who share an interest in liberty and who demonstrate the potential to change the climate of opinion to one more congenial to the principles and practice of freedom."

Thomas E. Woods, Jr., a senior fellow of the Ludwig von Mises Institute, provides this rich resource for those who are setting out to learn more about Austrian Economics.

"The Ludwig von Mises Institute was founded in 1982 as the research and educational center of classical liberalism, libertarian political theory, and the Austrian School of economics. It serves as the world's leading provider of educational materials, conferences, media, and literature in support of the tradition of thought represented by Ludwig von Mises and the school of thought he enlivened...

"The most complete online offering of the literature of the Austrian School and libertarian ideas, including books, journal articles, and other writings, sorted by author or any method you choose."