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The Financial History Of The Last Century Shows A Steady Increase In The Amount Of Public Indebtedness. Nobody Believes That The States Will Eternally Drag The Burden Of These Interest Payments. It Is Obvious That Sooner Or Later All These Debts Will Be Liquidated In Some Way Or Other, But Certainly Not By Payment Of Interest And Principal According To The Terms Of The Contract.

-Ludwig Von Mises

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The Financial History Of

Ludwig Von Mises

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The Financial History Of The Last Century Shows A Steady Increase In The Amount Of Public Indebtedness. Nobody Believes That The States Will Eternally Drag The Burden Of These Interest Payments. It Is Obvious That Sooner Or Later All These Debts Will Be Liquidated In Some Way Or Other, But Certainly Not By Payment Of Interest And Principal According To The Terms Of The Contract.

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The Issue Is Always The Same: The Government Or The Market. There Is No Third Solution.

Inflation Is An Increase In The Quantity Of Money Without A Corresponding Increase In The Demand For Money, I.e., For Cash Holdings.

The Liberals Of The Eighteenth Century, Guided By The Ideas Of Natural Law And Of The Enlightenment, Demanded For Everyone Equality Of Political And Civil Rights... Nothing, However, Is As Ill-founded As The Assertion Of The Alleged Equality Of All Members Of The Human Race.

Credit Expansion Can Bring About A Temporary Boom. But Such A Fictitious Prosperity Must End In A General Depression Of Trade, A Slump.

The State Is Essentially An Apparatus Of Compulsion And Coercion. The Characteristic Feature Of Its Activities Is To Compel People Through The Application Or The Threat Of Force To Behave Otherwise Than They Would Like To Behave.

Taxing Profits Is Tantamount To Taxing Success.

The Living Is Not Perfect Because It Is Liable To Change; The Dead Is Not Perfect Because It Does Not Live.

Without Calculation, Economic Activity Is Impossible. Since Under Socialism Economic Calculation Is Impossible, Under Socialism There Can Be No Economic Activity In Our Sense Of The Word All Economic Change, Therefore, Would Involve Operations The Value Of Which Could Neither Be Predicted Beforehand Nor Ascertained After They Had Taken Place. Everything Would Be A Leap In The Dark. Socialism Is The Renunciation Of Rational Economy.

The Capitalist System, In Spite Of All Obstacles Put In Its Way By Governments And Politicians, Has Raised The Standard Of Living Of The Masses In An Unprecedented Way.

There Is No Other Planning For Freedom And General Welfare Than To Let The Market System Work.

General Welfare

Scientific Research Sooner Or Later, But Inevitably, Encounters Something Ultimately Given That It Cannot Trace Back To Something Else Of Which It Would Appear As The Regular Or Necessary Derivative. Scientific Progress Consists In Pushing Further Back This Ultimately Given.

Neither The Entrepreneurs Nor The Farmers Nor The Capitalists Determine What Has To Be Produced. The Consumers Do That.

If The Present Tax Rates Had Been In Effect From The Beginning Of Our Century, Many Who Are Millionaires Today Would Live Under More Modest Circumstances. But All Those New Branches Of Industry Which Supply The Masses With Articles Unheard Of Before, Would Operate, If At All, On A Much Smaller Scale, And Their Products Would Be Beyond The Reach Of The Common Man.

People Do Not Cooperate Under The Division Of Labor Because They Love Or Should Love One Another. They Cooperate Because This Best Serves Their Own Interests. Neither Love Nor Charity Nor Any Other Sympathetic Sentiments But Rightly Understood Selfishness Is What Originally Impelled Man To Adjust Himself To The Requirements Of Society, To Respect The Rights And Freedoms Of His Fellow Men And To Substitute Peaceful Collaboration For Enmity And Conflict.

Division Of Labor

He Who Is Unfit To Serve His Fellow Citizens Wants To Rule Them.

The Truth Is That Most People Lack The Intellectual Ability And Courage To Resist A Popular Movement, However Pernicious And Ill-considered.

A Famous, Very Often Quoted Phrase Says: "that Government Is Best, Which Governs Least." I Do Not Believe This To Be A Correct Description Of Of The Functions Of A Good Government. Government Ought To Do All The Things For Which It Is Needed And For Which It Is Established. Government Ought To Protect The Individuals Within The Country Against The Violent And Fraudulent Attacks Of Gangsters, And It Should Defend The Country Against Foreign Enemies. These Are The Functions Of Government Within A Free System, Within The System Of The Market Economy.

Economic Knowledge Necessarily Leads To Liberalism

Keynes Did Not Teach Us How To Perform The Miracle Of Turning A Stone Into Bread, But The Not At All Miraculous Procedure Of Eating The Seed Corn.

The Desire For An Increase Of Wealth Can Be Satisfied Through Exchange, Which Is The Only Method Possible In A Capitalist Economy, Or By Violence And Petition As In A Militarist Society, Where The Strong Acquire By Force, The Weak By Petitioning.

Capitalist Economy

Two Hundred Years Ago, Before The Advent Of Capitalism, A Man's Social Status Was Fixed From The Beginning To The End Of His Life; He Inherited It From His Ancestors And It Never Changed.

Economic Theory Has Demonstrated In An Irrefutable Way That A Prosperity Created By An Expansionist Monetary And Credit Policy Is Illusory And Must End In A Slump, An Economic Crisis.

These People Talk Of A "middle-of-the-road" Policy. What They Do Not See Is That The Isolated Interference, Which Means The Interference With Only One Small Part Of The Economic System, Brings About A Situation Which The Government Itself — And The People Who Are Asking For Government Interference — Find Worse Than The Conditions They Wish To Abolish: The People Who Are Asking For Rent Control Are Very Angry When They Discover There Is A Shortage Of Apartments And A Shortage Of Housing.

It Is Impossible To Describe Any Human Action If One Does Not Refer To The Meaning The Actor Sees In The Stimulus As Well As In The End His Response Is Aiming At.

Public Opinion Takes No Offense At The Endeavors Of Farmers, Workers, Clerks, Teachers, Doctors, Ministers, And People From Many Other Callings To Earn As Much As They Can. But It Censures The Capitalists And Entrepreneurs For Their Greed.

The First Socialists Were The Intellectuals; They, And Not The Masses, Are The Backbone Of Socialism.

The Most Serious Dangers For American Freedom And The American Way Of Life Do Not Come From Without.

Inflationism, However, Is Not An Isolated Phenomenon. It Is Only One Piece In The Total Framework Of Politico-economic And Socio-philosophical Ideas Of Our Time. Just As The Sound Money Policy Of Gold Standard Advocates Went Hand In Hand With Liberalism, Free Trade, Capitalism And Peace, So Is Inflationism Part And Parcel Of Imperialism, Militarism, Protectionism, Statism And Socialism.

There Is Simply No Other Choice Than This: Either To Abstain From Interference In The Free Play Of The Market, Or To Delegate The Entire Management Of Production And Distribution To The Government. Either Capitalism Or Socialism: There Exists No Middle Way.

In Public Administration There Is No Connection Between Revenue And Expenditure.

It Is Impossible To Understand The History Of Economic Thought If One Does Not Pay Attention To The Fact That Economics As Such Is A Challenge To The Conceit Of Those In Power.

One Day, Because They Realize For Some Reason Or Other That They Must Stop Credit Expansion, The Banks Do Stop Creating New Credit To Lend. Then The Firms That Have Expanded Cannot Get Credit To Pay For The Factors Of Production Necessary For The Completion Of The Investment Projects Which They Have Already Committed Themselves. Because They Cannot Pay Their Bills, They Sell Off Their Inventories Cheap. Then Comes The Panic, The Breakdown. And The Depression Starts.

Taxes Are Necessary. But The System Of Discriminatory Taxation Universally Accepted Under The Misleading Name Of Progressive Taxation Of Income And Inheritance Is Not A Mode Of Taxation. It Is Rather A Mode Of Disguised Expropriation Of The Successful Capitalists And Entrepreneurs.

Progressive Taxation

[t]he Essence Of So-called War Prosperity: It Enriches Some By What It Takes From Others. It Is Not Rising Wealth But A Shifting Of Wealth And Income.

Anarchism Misunderstands The Real Nature Of Man. It Would Be Practicable Only In A World Of Angels And Saints

You Call It A 'loophole' When The Government Still Allows You Some Freedom.

War Prosperity Is Like The Prosperity That An Earthquake Or A Plague Brings...but No One Has For Those Reasons Yet Sought To Celebrate Earthquakes And Cholera As Stimulators Of The Productive Forces In The General Interest.

It Has Always Been The Task Of The New Generation To Provoke Changes.

The Essence Of Keynesianism Is Its Complete Failure To Conceive The Role That Saving And Capital Accumulation Play In The Improvement Of Economic Conditions.

The Unpopularity Of Economics Is The Result Of Its Analysis Of The Effects Of Privileges. It Is Impossible To Invalidate The Economists Demonstration That All Privileges Hurt The Interests Of The Rest Of The Nation Or At Least A Great Part Of It.

The Masses Do Not Like Those Who Surpass Them In Any Regard. The Average Man Envies And Hates Those Who Are Different.

If It Is Unnecessary To Adjust The Amount Of Expenditure To The Means Available, There Is No Limit To The Spending Of The Great God State.

German Marxian's Coined The Dictum: If Socialism Is Against Human Nature, Then Human Nature Must Be Changed.

Unemployment Doles Can Have No Other Effect Than The Perpetuation Of Unemployment.

The Direction Of All Economic Affairs Is In The Market Society A Task Of The Entrepreneurs. Theirs Is The Control Of Production. They Are At The Helm And Steer The Ship. A Superficial Observer Would Believe That They Are Supreme. But They Are Not. They Are Bound To Obey Unconditionally The Captain's Orders.

Inflation Is The True Opium Of The People And It Is Administered To Them By Anticapitalist Governments And Parties.

Reason And Action Are Congeneric And Homogenous, Two Aspects Of The Same Phenomenon.

Government Is The Only Institution That Can Take A Valuable Commodity Like Paper, And Make It Worthless By Applying Ink.

Free Markets. What Does This System Mean? The Answer Is Simple: It Is The Market Economy, It Is The System In Which The Cooperation Of Individuals In The Social Division Of Labor Is Achieved By The Market.

Division Of Labor

A Nation, Therefore, Has No Right To Say To A Province: You Belong To Me, I Want To Take You. A Province Consists Of Its Inhabitants. If Anybody Has A Right To Be Heard In This Case It Is These Inhabitants. Boundary Disputes Should Be Settled By Plebiscite.

The Whole Of Mankind's Progress Has Had To Be Achieved Against The Resistance And Opposition Of The State And Its Power Of Coercion.

The Tricks And Artifices Of Advertising Are Available To The Seller Of The Better Product No Less Than To The Seller Of The Poorer Product. But Only The Former Enjoys The Advantage Derived From The Better Quality Of His Product.

Each Epoch Has Found In The Gospels What It Sought To Find There, And Has Overlooked What It Wished To Overlook.

The Pseudo-liberals Monopolize The Teaching Jobs At Many Universities. Only Men Who Agree With Them Are Appointed As Teachers And Instructors Of The Social Sciences, And Only Textbooks Supporting Their Ideas Are Used.

A Society That Chooses Between Capitalism And Socialism Does Not Choose Between Two Social Systems; It Chooses Between Social Cooperation And The Disintegration Of Society. Socialism Is Not An Alternative To Capitalism; It Is An Alternative To Any System Under Which Men Can Live As Human Beings.

What Can Prevent The Coming Of Totalitarian Socialism Is Only A Thorough Change In Ideologies. What We Need Is An Open Positive Endorsement Of That System To Which We Owe All The Wealth That Distinguished Our Age From The Conditions Of Ages Gone By.

Government Is An Apparatus Of Compulsion And Coercion.

Reason's Biological Function Is To Preserve And Promote Life And To Postpone Its Extinction As Long As Possible. Thinking And Acting Are Not Contrary To Nature; They Are, Rather, The Foremost Features Of Man's Nature. The Most Appropriate Description Of Man As Differentiated From Nonhuman Beings Is: A Being Purposively Struggling Against The Forces Adverse To His Life.

The Capitalist System Of Production Is An Economic Democracy In Which Every Penny Gives A Right To Vote. The Consumers Are The Sovereign People. The Capitalists, The Entrepreneurs, And The Farmers Are The People's Mandatories. If They Do Not Obey, If They Fail To Produce, At The Lowest Possible Cost, What

The Market Steers The Capitalistic Economy. It Directs Each Individual's Activities Into Those Channels In Which He Best Serves The Wants Of His Fellow-men. The Market Alone Puts The Whole Social System Of Private Ownership Of The Means Of Production And Free Enterprise In Order And Provides It With Sense And Meaning.

It Is Necessary To Curb The Power Of Government. This Is The Task Of All Constitutions, Bills Of Rights And Laws. This Is The Meaning Of All Struggles Which Men Have Fought For Liberty.

Public Opinion Always Wants Easy Money, That Is, Low Interest Rates.

The Market Is A Democracy In Which Every Penny Gives A Right To Vote.

Servile Labour Disappeared Because It Could Not Stand The Competition Of Free Labour; Its Un-profitability Sealed Its Doom In The Market Economy.

Men Are Fighting One Another Because They Are Convinced That The Extermination And Liquidation Of Adversaries Is The Only Means Of Promoting Their Own Well-being.

The Methods Of The Natural Sciences Cannot Be Applied To Human Behavior Because This Behaviorlacks The Peculiarity That Characterizes Events In The Field Of The Natural Sciences, Viz., Regularity.

Capitalism Means Free Enterprise, Sovereignty Of The Consumers In Economic Matters, And Sovereignty Of The Voters In Political Matters. Socialism Means Full Government Control Of Every Sphere Of The Individuals Life And The Unrestricted Supremacy Of The Government In Its Capacity As Central Board Of Production Management.

The Worst Evils Which Mankind Has Ever Had To Endure Were Inflicted By Bad Governments.

Nothing Is More Calculated To Make A Demagogue Popular Than A Constantly Reiterated Demand For Heavy Taxes On The Rich. Capital Levies And High Income Taxes On The Larger Incomes Are Extraordinarily Popular With The Masses, Who Do Not Have To Pay Them.

The Supremacy Of Public Opinion Determines Not Only The Singular Role That Economics Occupies In The Complex Of Thought And Knowledge. It Determines The Whole Process Of Human History.

It Is The Worst Of All Superstitions To Assume That The Epistemological Characteristics Of One Branch Of Knowledge Must Necessarily Be Applicable To Any Other Branch.

All This Talk: The State Should Do This Or That, Ultimately Means: The Police Should Force Consumers To Behave Otherwise Than They Would Behave Spontaneously.

Daily Experience Proves Clearly To Everybody But The Most Bigoted Fanatics Of Socialism That Governmental Management Is Inefficient And Wasteful.

While Under Precapitalistic Conditions Superior Men Were The Masters On Whom The Masses Of The Inferior Had To Attend, Under Capitalism The More Gifted And More Able Have No Means To Profit From Their Superiority Other Than To Serve To The Best Of Their Abilities The Wishes Of The Majority Of The Less Gifted.

Capitalism Is Essentially A System Of Mass Production For The Satisfaction Of The Needs Of The Masses. It Pours A Horn Of Plenty Upon The Common Man. It Has Raised The Average Standard Of Living To A Height Never Dreamed Of In Earlier Ages. It Has Made Accessible To Millions Of People Enjoyments Which A Few Generations Ago Were Only Within The Reach Of A Small élite.

Violent Resistance Against The Power Of The State Is The Last Resort Of The Minority In Its Effort To Break Loose From The Oppression Of The Majority. ... The Citizen Must Not Be So Narrowly Circumscribed In His Activities That, If He Thinks Differently From Those In Power, His Only Choice Is Either To Perish Or To Destroy The Machinery Of State.

The Unprecedented Success Of Keynesianism Is Due To The Fact That It Provides An Apparent Justification For The 'deficit Spending' Policies Of Contemporary Governments. It Is The Pseudo-philosophy Of Those Who Can Think Of Nothing Else Than To Dissipate The Capital Accumulated By Previous Generations.

If People Do Not Consume Their Whole Incomes, The Non-consumed Surplus Can Be Invested, It Increases The Amount Of Capital Goods Available And Thereby Makes It Possible To Embark Upon Projects Which Could Not Be Executed Before.

There Is No Means By Which Anyone Can Evade His Personal Responsibility. Whoever Neglects To Examine To The Best Of His Abilities All The Problems Involved Voluntarily Surrenders His Birthright To A Selfappointed Elite Of Supermen. In Such Vital Matters Blind Reliance Upon 'experts' And Uncritical Acceptance Of Popular Catchwords And Prejudices Is Tantamount To The Abandonment Of Self-determination And To Yielding To Other People's Domination. As Conditions Are Today, Nothing Can Be More Important To Every Intelligent Man Than Economics. His Own Fate And That Of His Progeny Are At Stake.

The Comparatively Greater Prosperity Of The United States Is An Outcome Of The Fact That The New Deal Did Not Come In 1900 Or 1910, But Only In 1933.

Spiritual Movements Are Revolts Of Thought Against Inertia, Of The Few Against The Many; Of Those Who Because They Are Strong In Spirit Are Strongest Alone Against Those Who Can Express Themselves Only In The Mass And The Mob, And Who Are Significant Only Because They Are Numerous.

An Intellectual Inferiority Of The Masses Would Manifest Itself Most Evidently In Their Aiming At The Abolition Of The System In Which They Themselves Are Supreme And Are Served By The Elite Of The Most Talented Men.

What Makes Small Business Develop Into Big Business Is Not Spending, But Saving And Capital Accumulation.

Whoever Prefers Life To Death, Happiness To Suffering, Well-being To Misery Must Defend Without Compromise Private Ownership In The Means Of Production.

All People, However Fanatical They May Be In Their Zeal To Disparage And To Fight Capitalism, Implicitly Pay Homage To It By Passionately Clamoring For The Products It Turns Out

Inflation Is Essentially Antidemocratic.

Every Step By Which An Individual Substitutes Concerted Action For Isolated Action Results In An Immediate And Recognizable Improvement In His Conditions. The Advantages Derived From Peaceful Cooperation And Division Of Labor Are Universal.

Division Of Labor

There Is An Inherent Tendency In All Governmental Power To Recognize No Restraints On Its Operation And To Extend The Sphere Of Its Dominion As Much As Possible. To Control Everything, To Leave No Room For Anything To Happen Of Its Own Accord Without The Interference Of The Authorities--th Is Is The Goal For Which Every Ruler Secretly Strives.

Production Is Not Something Physical, Material, And External; It Is A Spiritual And Intellectual Phenomenon.

Not Mythical Material Productive Forces, But Reason And Ideas Determine The Course Of Human Affairs. What Is Needed To Stop The Trend Toward Socialism And Despotism Is Common-sense And Moral Courage.

Every Specific Tax, As Well As The Nation's Whole Tax System, Becomes Self-defeating Above A Certain Height Of The Rates.

Under A Socialist Mode Of Production All Personal Incentives Which Selfishness Provides Under Capitalism Are Removed, And A Premium Is Put Upon Laziness And Negligence. Whereas In A Capitalist Society Selfishness Incites Everyone To The Utmost Diligence, In A Socialist Society It Makes For Inertia And Laxity.

Capitalists Have The Tendency To Move Toward Those Countries In Which There Is Plenty Of Labor Available And At Which Labor Is Reasonable. And By The Fact That They Bring Capital Into These Countries, They Bring About A Trend Toward Higher Wage Rates.

War Can Really Cause No Economic Boom, At Least Not Directly, Since An Increase In Wealth Never Does Result From Destruction Of Goods.

Planning Other People's Actions Means To Prevent Them From Planning For Themselves, Means To Deprive Them Of Their Essentially Human Quality, Means Enslaving Them.

Is Still Fulfilling Its Social Function In Supplying The Consumers With More, Better And Cheaper Goods.

Those Who Are Asking For More Government Interference Are Asking Ultimately For More Compulsion And Less Freedom.

Innovation Is The Whim Of An Elite Before It Becomes A Need Of The Public.

The Body Of Economic Knowledge Is An Essential Element In The Structure Of Human Civilization; It Is The Foundation Upon Which Modern Industrialism And All The Moral, Intellectual, Technological, And Therapeutical Achievements Of The Last Centuries Have Been Built.

Society Is Joint Action And Cooperation In Which Each Participant Sees The Other Partner's Success As A Means For The Attainment Of His Own.

The Market And Its Inescapable Law Are Supreme.

Everybody Thinks Of Economics Whether He Is Aware Of It Or Not. In Joining A Political Party Or In Casting His Ballot, The Citizen Implicitly Takes A Stand Upon Essential Economic Theories.

It Is Indeed One Of The Principal Drawbacks Of Every Kind Of Interventionism That It Is So Difficult To Reverse The Process.

What Generates War Is The Economic Philosophy Of Nationalism: Embargoes, Trade And Foreign Exchange Controls, Monetary Devaluation, Etc. The Philosophy Of Protectionism Is A Philosophy Of War.

There Were Nowhere More Docile Disciples Of Lenin, Trotsky And Stalin Than The Nazis Were.

The "progressives" Who Today Masquerade As "liberals" May Rant Against "fascism"; Yet It Is Their Policy That Paves The Way For Hitlerism. Nothing Could Have Been More Helpful To The Success Of The National-socialist (nazi) Movement Than The Methods Used By The "progressives," Denouncing Nazism As A Party Serving The Interests Of "capital." The German Workers Knew This Tactic Too Well To Be Deceived By It Again.

History Has Witnessed The Failure Of Many Endeavors To Impose Peace By War, Cooperation By Coercion, Unanimity By Slaughtering Dissidents.... A Lasting Order Cannot Be Established By Bayonets.

All Present-day Governments Are Fanatically Committed To An Easy Money Policy.

What Economic Calculation Requires Is A Monetary System Whose Functioning Is Not Sabotaged By Government Interference.

Monetary System

The Governments Alone Are Responsible For The Spread Of The Superstitious Awe With Which The Common Man Looks Upon Every Bit Of Paper Upon Which The Treasury Or Agencies Which It Controls Have Printed The Magical Words Legal Tender.

The History Of Mankind Is The History Of Ideas. For It Is Ideas, Theories, And Doctrines That Guide Human Action, Determine The Ultimate Ends Men Aim At, And The Choice Of The Means Employed For The Attainment Of These Ends.

Every Government Intervention [in The Marketplace] Creates Unintended Consequences, Which Lead To Calls For Further Government Interventions.

Unintended Consequences

Socialism Is The Renunciation Of Rational Economy.

Historical Knowledge Is Indispensable For Those Who Want To Build A Better World

Historical Knowledge

He Who Serves The Public Best, Makes The Highest Profits.

The Planner Is A Potential Dictator Who Wants To Deprive All Other People Of The Power To Plan And Act According To Their Own Plans. He Aims At One Thing Only: The Exclusive Absolute Preeminence Of His Own Plan.

The Government And Its Chiefs Do Not Have The Powers Of The Mythical Santa Claus. They Cannot Spend Except By Taking Out Of The Pockets Of Some People For The Benefit Of Others.

The Usual Terminology Of Political Language Is Stupid. What Is 'left' And What Is 'right'? Why Should Hitler Be 'right' And Stalin, His Temporary Friend, Be 'left'? Who Is 'reactionary' And Who Is 'progressive'? Reaction Against An Unwise Policy Is Not To Be Condemned. And Progress Towards Chaos Is Not To Be Commended.

Political Language

The Real Bosses, In The Capitalist System Of Market Economy, Are The Consumers.

In Talking About Equality And Asking Vehemently For Its Realization, Nobody Advocates A Curtailment Of His Own Present Income.

Economically Considered, War And Revolution Are Always Bad Business.

Only One Thing Can Conquer War-that Attitude Of Mind Which Can See Nothing In War But Destruction And Annihilation.

Those Who Disagree With The Dictator's Plan Have No Other Means To Carry On Than To Defeat The Despot By Force Of Arms.

In Spite Of The Anticapitalistic Policies Of All Governments And Of Almost All Political Parties, The Capitalist Mode Of Production

Welfare Policies Never Attain Those - Allegedly Beneficial - Ends Which The Government And The Self-styled Progressives Who Advocated Them Wanted To Attain, But - On The Contrary - Bring About A State Of Affairs Which - From The Very Point Of View Of The Government And Its Supporters - Is Even More Unsatisfactory Than The Previous State Of Affairs They Wanted To 'improve.'

Once Public Opinion Is Convinced That The Increase In The Quantity Of Money Will Continue And Never Come To An End, And That Consequently The Prices Of All Commodities Will Not Cease To Rise, Everybody Becomes Eager To Buy As Much As Possible And Restrict His Cash Holdings To Minimum Size... If The Credit Expansion Is Not Stopped In Time, The Boom Turns To Crack-up Boom: The Flight Into Real Values Begins, And The Whole Monetary System Founders.

Freedom And Liberty Always Mean Freedom From Police Interference.

What Is Lacking To The Underdeveloped Nations Is Not Knowledge, But Capital.

Wars Of Aggression Are Popular Nowadays With Those Nations Convinced That Only Victory And Conquest Could Improve Their Material Well-being.

Economics Is Not About Things And Tangible Material Objects; It Is About Men, Their Meanings And Actions.

Behaviorism Proposes To Study Human Behavior According To The Methods Developed By Animal And Infant Psychology. It Seeks To Investigate Reflexes And Instincts, Automatisms And Unconscious Reactions. But It Has Told Us Nothing About The Reflexes That Have Built Cathedrals, Railroads, And Fortresses, The Instincts That Have Produced Philosophies, Poems, And Legal Systems, The Automatisms That Have Resulted In The Growth And Decline Of Empires, The Unconscious Reactions That Are Splitting Atoms.

Changes In Human Conditions Are Brought About By The Pioneering Of The Cleverest And Most Energetic Men. They Take The Lead And The Rest Of Mankind Follows Them Little By Little.

Human Condition

In A Game There Are Winners And Losers. But A Business Deal Is Always Advantageous For Both Parties. If Both The Buyer And The Seller Were Not To Consider The Transaction As The Most Advantageous Action They Could Choose Under The Prevailing Conditions, They Would Not Enter Into The Deal.

The Characteristic Feature Of A Free Society Is That It Can Function In Spite Of The Fact That Its Members Disagree In Many Judgments Of Value. Freedom Really Means The Freedom To Make Mistakes.

The Continued Existence Of Society Depends Upon Private Property.

The Market System Is The Basis Of Our Civilization. Its Only Alternative Is The Führer Principle.

The Illusiveness Of This Concept Of National Income Is To Be Seen In Its Dependence On Changes In The Purchasing Power Of The Monetary Unit. The More Inflation Progresses, The Higher Rises The National Income.

Socialism In Russia Has Not Brought About An Improvement In The Conditions Of The Average Man Which Can Be Compared With The Improvement Of Conditions, During The Same Period, In The United States.

Once It Has Been Perceived That The Division Of Labour Is The Essence Of Society, Nothing Remains Of The Antithesis Between Individual And Society. The Contradiction Between Individual Principle And Social Principle Disappears.

Interventionism Cannot Be Considered As An Economic System Destined To Stay. It Is A Method For The Transformation Of Capitalism Into Socialism By A Series Of Successive Steps.

Value Is Not Intrinsic, It Is Not In Things. It Is Within Us; It Is The Way In Which Man Reacts To The Conditions Of His Environment. Neither Is Value In Words And Doctrines, It Is Reflected In Human Conduct. It Is Not What A Man Or Groups Of Men Say About Value That Counts, But How They Act.

A New Type Of Superstition Has Got Hold Of People's Minds, The Worship Of The State. People Demand The Exercise Of The Methods Of Coercion And Compulsion, Of Violence And Threat. Woe To Anybody Who Does Not Bend His Knee To The Fashionable Idols!

Big Business Depends Entirely On The Patronage Of Those Who Buy Its Products: The Biggest Enterprises Loses Its Power And Its Influence When It Loses Its Customers.

The Flowering Of Human Society Depends On Two Factors: The Intellectual Power Of Outstanding Men To Conceive Sound Social And Economic Theories, And The Ability Of These Or Other Men To Make These Ideologies Palatable To The Majority.

It Is Certain That Many Intellectuals Envy The Higher Income Of Prosperous Businessmen And That These Feelings Drive Them Toward Socialism. They Believe That The Authorities Of A Socialist Commonwealth Would Pay Them Higher Salaries Than Those That They Earn Under Capitalism.

Economics Must Not Be Relegated To Classrooms And Statistical Offices And Must Not Be Left To Esoteric Circles. It Is The Philosophy Of Human Life And Action And Concerns Everybody And Everything. It Is The Pith Of Civilization And Of Man's Human Existence.

Inequality Of Wealth And Incomes Is An Essential Feature Of The Market Economy. It Is The Implement That Makes The Consumers Supreme In Giving Them The Power To Force All Those Engaged In Production To Comply With Their Orders. It Forces All Those Engaged In Production To The Utmost Exertion In The Service Of The Consumers. It Makes Competition Work. He Who Best Serves The Consumers Profits Most And Accumulates Riches.

The Characteristic Feature Of Militarism Is Not The Fact That A Nation Has A Powerful Army Or Navy. It Is The Paramount Role Assigned To The Army Within The Political Structure. Even In Peacetime The Army Is Supreme; It Is The Predominant Factor In Political Life. The Subjects Must Obey The Government As Soldiers Must Obey Their Superiors. Within A Militarist Community There Is No Freedom; There Are Only Obedience And Discipline.

The Only Source Of The Generation Of Additional Capital Goods Is Saving. If All The Goods Produced Are Consumed, No New Capital Comes Into Being.

The Marxians Love Of Democratic Institutions Was A Stratagem Only, A Pious Fraud For The Deception Of The Masses. Within A Socialist Community There Is No Room Left For Freedom.

Aggressors Cannot Wage Total War Without Introducing Socialism.

The Mark Of The Creative Mind Is That It Defies A Part Of What It Has Learned.

The Boom Is Called Good Business, Prosperity, And Upswing. Its Unavoidable Aftermath, The Readjustment Of Conditions To The Real Data Of The Market, Is Called Crisis, Slump, Bad Business, Depression.

As The Science Of Economics...exploded The Fallacies Of Every Brand Of Utopianism, It Was Outlawed And Stigmatized As Unscientific.

Where There Is No Market Economy, The Best Intentioned Provisions Of Constitutions And Laws Remain A Dead Letter.

Every Step Toward The Elimination Of Profit Is Progress On The Way Toward Social Disintegration.

Assistance Granted To The Unemployed Does Not Dispose Of Unemployment. It Makes It Easier For The Unemployed To Remain Idle.

The Boom Squanders Through Malinvestment Scarce Factors Of Production And Reduces The Stock Available Through Overconsumption; Its Alleged Blessings Are Paid For By Impoverishment.

Overconsumption

Factors Of Production

The Law-abiding Citizen By His Labor Serves Both Himself And His Fellow Man And Thereby Integrates Himself Peacefully Into The Social Order. The Robber, On The Other Hand, Is Intent, Not On Honest Toil, But On The Forcible Appropriation Of The Fruits Of Others' Labor.

A Wealthy Man Can Preserve His Wealth Only By Continuing To Serve The Consumers In The Most Efficient Way.

It Is Evident That Youth Is The First Victim Of The Trend Toward Bureaucratization. The Young Men Are Deprived Of Any Opportunity To Shape Their Own Fate.

The Salesman Thanks The Customer For Patronizing His Shop And Asks Him To Come Again. But The Socialists Say: Be Grateful To Hitler, Render Thanks To Stalin; Be Nice And Submissive, Then The Great Man Will Be Kind To You Later Too.

Government Cannot Make Man Richer, But It Can Make Him Poorer.

The Vigorous Man Industriously Striving For The Improvement Of His Condition Acts Neither More Nor Less Than The Lethargic Man Who Sluggishly Takes Things As They Come. For To Do Nothing And To Be Idle Are Also Action, They Too Determine The Course Of Events.

People Do Not Cooperate Under The Division Of Labor Because They Love Or Should Love One Another. They Cooperate Because This Best Serves Their Own Interests.

Division Of Labor

Love One Another

The Genuine History Of Mankind Is The History Of Ideas. It Is Ideas That Distinguish Man From All Other Beings. Ideas Engender Social Institutions, Political Changes, Technologi- Cal Methods Of Production, And All That Is Called Economic Conditions.

My Theories Explain, But Cannot Slow The Decline Of A Great Civilization. I Set Out To Be A Reformer, But Only Became The Historian Of Decline.

Government Is A Guarantor Of Liberty And Is Compatible With Liberty Only If Its Range Is Adequately Restricted To The Preservation Of What Is Called Economic Freedom.

What Vitiates Entirely The Socialists Economic Critique Of Capitalism Is Their Failure To Grasp The Sovereignty Of The Consumers In The Market Economy.

One Has To Recognize That Science Is Not Metaphysics, And Certainly Not Mysticism; It Can Never Bring Us The Illumination And The Satisfaction Experienced By One Enraptured In Ecstasy. Science Is Sobriety And Clarity Of Conception, Not Intoxicated Vision.

Marx And Engels Openly Declared That The Progressive Income Tax And The Death Tax Are 'economically Untenable' And That They Advocated Them Only Because 'they Necessitate Further Inroads' Upon The Capitalist System And Are 'unavoidable' As A Means Of Bringing About Socialism.

Profits Are The Driving Force Of The Market Economy. The Greater The Profits, The Better The Needs Of The Consumers Are Supplied... He Who Serves The Public Best, Makes The Highest Profits.

People Must Learn That The Accumulation Of Wealth By The Successful Conduct Of Business Is The Corollary Of The Improvement Of Their Own Standard Of Living And Vice Versa. They Must Realize That Bigness In Business Is Not An Evil, But Both The Cause And Effect Of The Fact That They Themselves Enjoy All Those Amenities Whose Enjoyment Is Called The “american Way Of Life.

Civilization Is A Work Of Peaceful Co-operation.

The Truth Is That Capitalism Has Not Only Multiplied Population Figures, But At The Same Time, Improved The People's Standard Of Living In An Unprecedented Way. Neither Economic Thinking Nor Historical Experience Suggests That Any Other Social System Could Be As Beneficial To The Masses As Capitalism. The Results Speak For Themselves. The Market Economy Needs No Apologists And Propagandists. It Can Apply To Itself The Words Of Sir Christopher Wren's Epitaph In St. Paul's: Si Monumentum Requires, Circumspice.

It Is True That Some Secluded Intellectuals In Their Esoteric Circles Talk Differently. They Proclaim The Priority Of What They Call Eternal Absolute Values And Feign In Their Declamations—not In Their Personal Conduct—a Disdain Of Things Secular And Transitory. But The Public Ignores Such Utterances. The Main Goal Of Present-day Political Action Is To Secure For The Respective Pressure Group Memberships The Highest Material Well-being. The Only Way For A Leader To Succeed Is To Instill In People The Conviction That His Program Best Serves The Attainment Of This Goal.

Pressure Groups

Under Capitalism Everybody Provides For Their Own Needs By Serving Others.

Library Of The Works Of Ludwig Von Mises”. Here Is An Article He Wrote In 1951, Some Two Years After His Magnum Opus Human Action Appeared, Where Is Lays Out His Case In A More Popular Form. The Money Sentences Are “economic Theory Has Demonstrated In An Irrefutable Way That A Prosperity Created By An Expansionist Monetary And Credit Policy Is Illusory And Must End In A Slump, An Economic Crisis. It Has Happened Again And Again In The Past, And It Will Happen In The Future, Too.

The Middle-of-the-road Policy Is Not An Economic System That Can Last. It Is A Method For The Realization Of Socialism By Installments.

The Luxury Of Today Is The Necessity Of Tomorrow. Every Advance First Comes Into Being As The Luxury Of A Few Rich People, Only To Become, After A Time, An Indispensable Necessity Taken For Granted By Everyone. Luxury Consumption Provides Industry With The Stimulus To Discover And Introduce New, Things. It Is One Of The Dynamic Factors In Our Economy. To It We Owe The Progressive Innovations By Which The Standard Of Living Of All Strata Of The Population Has Been Gradually Raised.

The Essential Feature Of Government Is The Enforcement Of Its Decrees By Beating, Killing, And Imprisoning.

The Goal Of Liberalism Is The Peaceful Cooperation Of All Men. It Aims At Peace Among Nations Too. When There Is Private Ownership Of The Means Of Production Everywhere And When Laws, The Tribunals And The Administration Treat Foreigners And Citizens On Equal Terms, It Is Of Little Importance Where A Country's Frontiers Are Drawn... War No Longer Pays; There Is No Motive For Aggression... All Nations Can Coexist Peacefully.

Credit Expansion Is The Governments' Foremost Tool In Their Struggle Against The Market Economy. In Their Hands It Is The Magic Wand Designed To Conjure Away The Scarcity Of Capital Goods, To Lower The Rate Of Interest Or To Abolish It Altogether, To Finance Lavish Government Spending, To Expropriate The Capitalists, To Contrive Everlasting Booms, And To Make Everybody Prosperous.

It Cannot Be Denied That Fascism And Similar Movements Aiming At The Establishment Of Dictatorships Are Full Of The Best Intentions And That Their Intervention Has, For The Moment, Saved European Civilization. The Merit That Fascism Has Thereby Won For Itself Will Live On Eternally In History.

A Nation Cannot Prosper If Its Members Are Not Fully Aware Of The Fact That What Alone Can Improve Their Condition S Is More And Better Production. And This Can Only Be Brought About By Increased Saving And Capital Accumulation.

No People And No Part Of A People Shall Be Held Against Its Will In A Political Association That It Does Not Want.

The Tow Pillars Of Democratic Government Are The Primacy Of The Law And The Budget.

Without Speculation There Can Be No Economic Activity Reaching Beyond The Immediate Present.

Liberty Is Meaningless If It Is Only The Liberty To Agree With Those In Power.

The Most Successful Businessmen Were Often Uneducated When Measured By The Scholastic Standards Of The Teaching Profession. But They Were Equal To Their Social Function Of Adjusting Production To The Most Urgent Demand. Because Of These Merits The Consumers Chose Them For Business Leadership.

The Interventionists Do Not Approach The Study Of Economic Matters With Scientific Disinterestedness. Most Of Them Are Driven By An Envious Resentment Against Those Whose Incomes Are Larger Than Their Own. This Bias Makes It Impossible For Them To See Things As They Really Are. For Them The Main Thing Is Not To Improve The Conditions Of The Masses, But To Harm The Entrepreneurs And Capitalists Even If This Policy Victimizes The Immense Majority Of The People.

Government Is Essentially The Negation Of Liberty.

There Is No Remedy For The Inefficiency Of Public Management.

What Counts Alone Is The Innovator, The Dissenter, The Harbinger Of Things Unheard Of, The Man Who Rejects The Traditional Standards And Aims At Substituting New Values And Ideas For Old Ones.

In The Capitalist Society There Is A Place And Bread For All. Its Ability To Expand Provides Sustenance For Every Worker. Permanent Unemployment Is Not A Feature Of Free Capitalism.

If One Regards Inflation As An Evil, Then One Has To Stop Inflating. One Has To Balance The Budget Of The Government.

To Defeat The Aggressors Is Not Enough To Make Peace Durable. The Main Thing Is To Discard The Ideology That Generates War.

A Higher Standard Of Living Also Brings About A Higher Standard Of Culture And Civilization.

The Inequality Of Income And Fortunes Is Essential In Capitalism.

Socialist Society Is A Society Of Officials.

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