Welcome to Scribd, the world's digital library. Read, publish, and share books and documents. See more ➡
Download
Standard view
Full view
of .
Add note
Save to My Library
Sync to mobile
Look up keyword
Like this
0Activity
×
0 of .
Results for:
No results containing your search query
P. 1
On the Nobel Prize in Economics and Mises

On the Nobel Prize in Economics and Mises

Ratings: (0)|Views: 64|Likes:
Published by Mises Fan
The problem with the “dismal science” of economics is well known. It mercilessly exposes and dispels the myths that have been invented to justify central planning and government interventionism. This flies in the face of the very institutions that finance and award the Prize in memory of Alfred Nobel. The Swedish central bank is institutionally committed to central planning in money. It can hardly be expected to print and spend millions of kronas on research that is useless — and potentially nefarious — from its very own point of view. Moreover, Sweden has been ruled by socialists for most of the post-war period. The venerable Royal Swedish Academy of Sciences was not immune from this tendency.
The problem with the “dismal science” of economics is well known. It mercilessly exposes and dispels the myths that have been invented to justify central planning and government interventionism. This flies in the face of the very institutions that finance and award the Prize in memory of Alfred Nobel. The Swedish central bank is institutionally committed to central planning in money. It can hardly be expected to print and spend millions of kronas on research that is useless — and potentially nefarious — from its very own point of view. Moreover, Sweden has been ruled by socialists for most of the post-war period. The venerable Royal Swedish Academy of Sciences was not immune from this tendency.

More info:

Published by: Mises Fan on Oct 10, 2013
Copyright:Attribution Non-commercial

Availability:

Read on Scribd mobile: iPhone, iPad and Android.
download as PDF, TXT or read online from Scribd
See More
See less

10/10/2013

pdf

text

original

 
40 Years Later: Mises’s Lasting Legacy 
Mises Daily: Thursday, October 10, 2013 byJörg Guido Hülsmann (http://mises.org/daily/author/231/Jorg-Guido-Hulsmann)
Tweet
20
2
14
Editor’s note: October 10, 2013 is the 40th anniversary of the death of Ludwig von Mises.
Each year in early October, the world looks to Swedenand Norway, where the annual Nobel Prize winners areannounced in the fields of literature, medicine-physiology, physics, chemistry, and peace-making.The great Swedish entrepreneur, Alfred Nobel did notsponsor a prize in economics, and the committees sponsored out of his estate did not grant anysuch prize until the present day. But there is a “Prize in Economic Sciences in Memory of AlfredNobel” which is sponsored by the central bank of Sweden. Since 1969, that prize has been grantedevery year in early October, too.The timing and the labeling of the prize, as well as the fact that its laureates are selected by theRoyal Swedish Academy of Sciences, which also picks the other laureates (except for the peaceprize), have misled people all over the world into thinking it is the real thing. Like counterfeitbanknotes, the economics prize has been circulating among the unsuspecting public.Alfred Nobel did not intend to sponsor a prize in economics. Apparently, neither did the Swedishcentral bank. Its prize has usually been awarded to scholars specializing in applied mathematics, orapplied psychology, or in the art of playing with statistical data that goes under the name of econometrics. Very rarely is it awarded to scholars who actually spend most of their time thinkingabout real-world economic problems, and almost never to anybody who has anything new andimportant and true to say about the real economy. It is true that many laureates were very wellversed in economics, but even they did not, as a rule, obtain the prize for any contribution to thatdiscipline.The problem with the “dismal science” of economics is well known. It mercilessly exposes anddispels the myths that have been invented to justify central planning and governmentinterventionism. This flies in the face of the very institutions that finance and award the Prize inmemory of Alfred Nobel. The Swedish central bank is institutionally committed to central planningin money. It can hardly be expected to print and spend millions of kronas on research that isuseless — and potentially nefarious — from its very own point of view. Moreover, Sweden has beenruled by socialists for most of the post-war period. The venerable Royal Swedish Academy of Sciences was not immune from this tendency.Unsurprisingly, the economics prize has always been heavily biased against economists who opposethe fiat-money foundation of the welfare state and of the warfare state. The facts speak forthemselves. With the notable exception of F.A. Hayek (laureate in 1974), none of the prize winnersis on record as an outspoken critic of central banking and monetary interventionism. And evenHayek came out of the closet only
after 
winning the prize, publishing
Choice in Currency 
(1976)and
Denationalisation of Money 
(1977).Unsurprisingly, two giants of economic thought, Ludwig von Mises (1881-1973) and Murray Rothbard(1926-1995) did not obtain the economics prize in memory of Alfred Nobel. Mises, who was arguablythe greatest economist ever, died at the very moment when that prize was awarded for the fifthtime. On the occasion of the 40th anniversary of his passing, it is appropriate to commemorate hisachievements and to highlight his lasting legacy.
RecommendSend54 people recommend this. Be the first of your friends.
Like54
 
Ludwig von Mises is well known as a fountainhead of the revival of classical liberalism andlibertarianism after WWII. But his influence on contemporary political thought was based entirelyon his groundbreaking contributions to social analysis, and to monetary economics in particular. Atthe very moment when inflationist ideas had made their intrusion into the academic world andwere about to supersede classical economics, Mises revolutionized the theory of money. He was thefirst economist to develop a full-fledged explanation of money prices, and he was also the first todevelop a comprehensive analysis of the causes and consequences of money production. His workrenewed and greatly reinforced the case against monetary interventionism, which had been at theheart of classical economics.Before Adam Smith, public opinion was infused with the notion that the volume of spending (intoday’s Keynesian jargon known as “aggregate demand”) drives the economy. Politicians andbusinessmen therefore strove to increase the national money supply in order to promote productionand growth. Smith argued that this was all wrong. The true causes of aggregate wealth were to beseen in the division of labor and in a frugal lifestyle. Policies designed to increase the nationalmoney supply by encouraging exports and hampering imports were ineffective. They impoverishedthe nation rather than to promote its growth.This thesis inspired the intellectual movement known as classical economics. It has also inspired theeconomists of the Austrian School. When Carl Menger developed his price theory based on the rock-solid foundation of subjective value, he did not seek to overthrow classical economics root andbranch. What he did was to repair one fundamental shortcoming of classical price theory, and in sodoing he solidified the overall edifice. Eugen von Böhm-Bawerk reinforced the classical teachingson savings and capital by analyzing the role of time in the production process. At the beginning of the 20th century, then, Ludwig von Mises completed the Austrian revision and reconstruction of classical economics with his theory of money.Adam Smith had neglected money because neither the demand for money, nor the supply thereof were to be counted among the causes of the wealth of nations. Many of his disciples — especiallythe great David Ricardo — delved into the matter in more detail. But their writings suffered fromthe Achilles’ heel of Smith’s theory: his cost-of-production theory of prices. They could thereforenot quite come to grips with the economics of banking, and the practical consequence was a never-ending sequence of booms and busts. This practical failure in the field of money and bankingeventually discredited the entire edifice of classical economics. Inflationist doctrines made acomeback, first creeping (second half of the 19th century), then galloping (around WWI), andeventually triumphing in the 1930s.Mises did not develop his theory of money in order to come up with classical-liberal practicalconclusions. Quite to the contrary, it took him a while to understand the political implications of what he had found. The first edition of this monetary treatise (1912) is actually quite tame in thatrespect. It is only in the second edition (1924) that Mises starts to hammer the anti-interventionistimplications of his work in monetary economics. At about the same time, he had begun to delveinto other areas of research, most notably into the analysis of socialist and interventionist systemsof government. These works brought him great fame, and they were instrumental in converting anentire generation of young intellectuals — such as Hayek, Haberler, Machlup, Morgenstern, andRobbins — to classical liberal ideas. But his monetary thought would always remain the backbone of his thinking. Eventually he would present it fully developed within a general theory of humanaction (
Nationalökonomie
,
Human Action
).It was Mises’s personal misfortune that, during all of his life, his economic and political ideas werethoroughly out of fashion. But, precisely for this very reason, his legacy is lasting and strong. Todaythe ideas that Mises had painstakingly refuted have run their course. Inflationism, socialism, andstatism have spelled misery, corruption, and chaos. Reading Mises enables us to understand thisworld, and it helps us to see the road that leads out of these quagmires.
Note: The views expressed in Daily Articles on Mises.org are not necessarily those of the MisesInstitute.
Comment on this article.

You're Reading a Free Preview

Download
/*********** DO NOT ALTER ANYTHING BELOW THIS LINE ! ************/ var s_code=s.t();if(s_code)document.write(s_code)//-->