"The Causes of the Economic Crisis ". Mises

"...is a collection of articles on the business cycle, money, and exchange rates by Ludwig von Mises that appeared between 1919 and 1946. Here we have the evidence that the master economist foresaw and warned against the breakdown of the German mark, as well as the market crash of 1929 and the depression that followed.

Mises presents his business cycle theory in its most elaborate form, applies it to the prevailing conditions, and discusses the policies that governments undertake that make recessions worse (even before Keynes's General Theory appeared!). He recommends a path for monetary reform that would eliminate business cycles as we have known them and provide the basis for a sustainable prosperity.

In foreseeing the interwar economic breakdown, Mises was nearly alone among his contemporaries — which is particularly interesting because Mises made no claim to possessing clairvoyant powers. To him, economics is a qualitative discipline. But among those who say that economics must be quantitative with the goal of accurate prediction, neither the pre-monetarists of the Fisher school nor the Keynesians foresaw the economic damage that would result from central bank policies that manipulate the supply of money and credit.

Why is this? Most economists were looking at the price level and growth rates as indicators of economic health. Mises's theoretical insights led him to look more deeply, and to elucidate the impact of credit expansion on the entire structure of the capitalistic production process.

The essays were well known to contemporary German-speaking audiences. They had not come to the attention of English audiences until 1978, four years after F.A. Hayek was awarded the Nobel Prize for, in particular, "his theory of business cycles and his conception of the effects of monetary and credit policies." In tribute to Hayek's excellent contributions, the Austrian theory of the business cycle has long been called a Hayekian theory.

But it might be more justly called the Misesian theory, for it was Mises who first presented it in his 1912 book and elaborated it so fully in the essays presented in this new book from the Mises Institute. (...)" The Prophet of the Great Depression
By Frank Shostak