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“Academia’s War Against Free Market Money”

Posted by
April 22, 2010
in Blog

“In a confrontational and much-needed LewRockwell.com article, Prof. William Anderson launched a counter-attack against mainstream academic economists’ refusal to consider seriously the Austrian School’s theory of money. Despite the fact that Ludwig von Mises’ 1912 theory of money explains booms and busts better than rival theories, and despite the fact that Austrian School disciples predicted the most recent bust when academic economists denied that such a bust was imminent, Austrian School economists get no respect. I could almost hear Aretha Franklin as I read Anderson’s essay.

I would put it somewhat differently. I would say that the nine-decade blackout on Mises’ theory of money has fared better than the seven-decade blackout on his theory of why socialist economic calculation is impossible (no capital markets), and therefore socialism as a system will fail.

What rescued Mises’ theory of socialism was the bankruptcy of the Soviet Union in 1988, the fall of the Berlin Wall in 1989, and the suicide of the Soviet Union in 1991. Reality had undeniably triumphed. So, grudgingly, there was a new willingness by a few mainstream economists to give Mises’ 1920 essay, ‘Economic Calculation in the Socialist Commonwealth,’ at least a footnote.” Read more.

“Academia’s War Against Free Market Money”
Gary North
LewRockwell.com, December 1, 2008.

Image by Simon Howden / FreeDigitalPhotos.net.