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The Ludwig von Mises Institute

Advancing Austrian Economics, Liberty, and Peace

Advancing the scholarship of liberty in the tradition of the Austrian School

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Mises Made Easier
Percy L. Greaves Jr.


Daimios, (Japanese). The chief feudal barons of a territory in Japan. While vassals of the Mikado (Emperor), they exercised independent authority in their baronies. They lost their power (1868) in the changes that followed from the opening of Japan to Western contacts and ideas.

Damocles, Sword of, See "Sword of Damocles.

Daphnis and Chlo?. One of the earliest romantic novels known. It describes how two naive children of rural herders grew up as lovers and overcame severe obstacles to achieve a happy married life in the country. The original manuscript was by a Greek Sophist, Longus (circa 300 A.D.). A French version by Jacques Amyot (1513-1593) appeared in 1559 and in 1810, Paul Louis Courier (1772-1825) found the original manuscript in a Florence, Italy, library and republished it.

Darwinism, social or sociological. A distortion of the doctrine of Charles Darwin (1809-1882) that the evolution and improvement of mankind is the result of a constant struggle for existence against environmental conditions into a quite different doctrine that the evolution and improvement of mankind is the result of constant wars, civil strife and revolutions whereby physically superior men vanquish the physically inferior.

OG. 120-22.

Das Kapital. The main work of the socialist, Karl Marx (1818-1883); a poorly written, voluminous, three volume anti-capitalistic dissertation based on the classical (or labor) theory of value. The rough draft of the three volumes was completed in 1865. Volume I appeared in 1867. Volumes II and III were promised the printer at six month intervals. When Volume I failed to attract notable attention, Marx stopped his finishing touches on the other volumes. After his death, 16 years later, his collaborator and financial backer, Friedrich Engels (1820-1895) brought out Volume II in 1885, and Volume III in 1894. Das Kapital is a book that is much more often quoted and referred to than really read or studied. See "Marxism."

For a critique from the Austrian viewpoint, see "Unresolved Contradiction in the Marxian Economic System" written in 1896 by Eugen von Böhm-Bawerk (1851-1914) and appearing in Volume I of Shorter Classics of Böhm-Bawerk (South Holland, Ill.: Libertarian Press, 1961), earlier editions under the title "Karl Marx and the Close of His System" (Macmillan Co., 1898, and Augustus M. Kelley, 1949). See also Böhm-Bawerk's Capital and Interest (South Holland, Ill.: Libertarian Press, 1959), particularly Volume 1, Chapter XII, "The Exploitation Theory," which has also been printed as a separate extract.

See also PLG. 31-39, 49, 109, 116-17, 175, 288.

Das spezifische Verstehen der Geisteswissenschaften, (German). The specific understanding of the moral sciences. See "Understanding." NOTE: "Geisteswissenschaften" was introduced into the German language for the term, "Moral sciences," as used by the English economist, John Stuart Mill (1806-1873).

Declaration of Independence (July 4, 1776). The document, signed by representatives of the thirteen American colonies assembled in Philadelphia, Pennsylvania, in the Second Continental Congress, which declares the independence of the United States from England. It proclaims that governments are instituted among men to secure the unalienable rights of men to life, liberty and the pursuit of happiness, and to that end, the signers pledged their lives, fortunes and sacred honor.

OG. 79.

Deduction, n. deductive, adj. In logic, reasoning from a general (or universal) premise, that is either assumed or known to be true, to an individual or particular instance of that generality. Example: All men act in an attempt to improve their situation; therefore, Mary's act was an attempt to improve her situation. The derived conclusion is always implicit in the original premise and is necessarily as correct as that original premise. The economics propounded by the Austrian School (q.v.) has been entirely developed on the basis of deductive reasoning.

HA. 38-41; UF. 21-27,44-45.

De facto, (Latin). In fact; actually; in reality.

Deflation. In popular nonscientific usage, a large decrease in the quantity of "money in the broader sense" (q.v.) which results in a rise in the purchasing power of the monetary unit, falsifies economic calculation and impairs the value of accounting as a means of appraising profits and losses. Deflation affects the various prices, wage rates and interest rates at different times and to different extents. It thus disarranges consumption, investment, the course of production and the structure of business and industry while increasing the wealth and income of some and decreasing that of others. Deflation does not alter the available quantity of consumable wealth. It merely removes a quantity of monetary units from the market, thus permitting each of the remaining units to command a higher purchasing power.

This popular definition, a large decrease in the quantity of money, is satisfactory for history and politics but it lacks the precision of a scientific term since the distinction between a small decrease and a large decrease in the quantity of money and the differences in their effects are merely a matter of degree.

A more precise concept for use in theoretical analysis is any decrease in the quantity of money in the broader sense which is not offset by a corresponding decrease in the need for money in the broader sense, so that a rise in the objective exchange-value (purchasing power) of money must ensue.

See PLG. 234-37.

Deism. In the eighteenth century sense, Deism meant a belief in one God as the Creator of the world or universe and opposition to revelation and the thought that God dwelt in man and was continuously active in the affairs of man and the world. Deists aimed at what they considered a rational as opposed to a mysterious faith. This led them to "naturalistic" explanations of religion and a belief in eternal "natural laws" which were regarded as the will of God.

De jure, (Latin). By law; legally; by right as opposed to de facto, in fact.

De lege ferenda, (Latin). For proposing or making a law.

De lege lata, (Latin). From existing law.

Demand deposit. Money placed in or credited to a commercial bank account which the depositor is legally entitled to withdraw on demand without prior notice. In practice, most withdrawals are in the form of checks which merely transfer sums within the banking system. Demand deposits are also known as deposit currency or checkbook money.

HA. 432.

Deposit currency. The demand deposit liabilities of banks. The total amount held in bank accounts subject to immediate withdrawal or transfer to another account upon presentation of a check duly signed by the owner of such a bank account. Sometimes referred to as checkbook money. Like banknotes, deposit currency is a money-substitute (q.v.) and "Money in the broader sense" (q.v.). Only the monetary reserves held against their withdrawal are "money in the narrower sense" (q.v.). The amount of deposit currency in excess of the reserves held against withdrawal is "fiduciary media" (q.v.).

HA. 432-48,571; M. 52-59, 268-75, 278-80, 319-21, 482-83.

Depression. In the trade cycle (q.v.), the period of economic readjustment which inevitably follows a boom created by inflation or credit expansion. The characteristics of a depression period are greatly reduced business activity, mass unemployment and much human misery. These characteristics continue until the illusions of the boom have been dispelled and economic activity has readjusted to the realities of the existing conditions. Attempts to interfere with free and flexible prices, wage and interest rates prevent recovery and prolong the depression period. See "Monetary theory of the trade cycle."

AC. 60-61; HA. 563, 575-78; PF. 103; also PLG. 175-231.

Deproletarianization. An improvement in the living conditions of the manual workers that raises their standard of living to the customary standards of the "middle classes."

Deus ex machina, (Latin). Literally, a god out of a machine, from the ancient theatrical practice of using a machine to produce on stage a god capable of solving problems human beings are unable to solve. Hence, reliance on providential intervention or other unspecified means for the solution of an otherwise unsolvable human problem.

Dialectical materialism. A Marxian concept developed out of a combination of Hegelian dialectics and the materialist philosophy of Ludwig von Feuerbach (1804-1872). It holds that the inherent logic of the "Material productive forces" (q.v.) propel society via the class struggle toward socialism "with the inexorability of a law of nature." See also "Materialism," sense 2.

HA. 79-84; TH. 102-158; UF. 30-33.

Dialectics. A philosophical term applied to methods of debate or argumentation that seek to prove or disprove the truth of something by the rules of logic or the laws of reasoning.

Dictionnaire philosophique, (French). Philosophical dictionary, title of a work by Voltaire (Fran?ois Marie Arouet, 1694-1778), a French writer and philosopher.

Didactic. Instructive; educational; fitted or intended to teach.

Differential equations. Complicated equations which express certain formulas of constant relationships and in which changes in the value or magnitude assigned to certain variable factors determine the value or magnitude of the other variable factors. These equations are helpful in solving many problems of higher mathematics and the natural sciences because the knowledge of certain known factors permits one to compute the value or magnitude of the unknown variable factors. Such equations are of no help in solving problems of human action (economics) because there is no certainty of constant relationships between the values of different factors. See "Mathematical economics" and "Marginal theory of value."

HA. 710-15.

Dilettantism. The quality characteristics of one who pursues an art, occupation or branch of knowledge superficially as a pastime or amusement without acquiring skill or proficiency.

Diminishing returns, law of. See "Returns, law of", of which it is a part.

Direct exchange. The trading of goods for goods (barter), goods for services ("truck system"), or services of one kind for services of another kind without the intermediary use of money or any other medium of exchange. Direct exchange contrasts with indirect exchange which involves the use of a medium of exchange, usually money, in a two step process of sale and purchase in order to obtain the desired goods or services.

Discount, rate of. An interest rate calculated and payable in advance. Unless otherwise specified or suggested, the term refers to the official rate charged by the central bank for discounting the short term paper and other eligible investments of other banks. In the United States, the official discount rate is the rate the Federal Reserve Banks charge their member banks. In Great Britain, the discount rate of the Bank of England is known as the bank rate.

Discursive reasoning. Thinking a problem through logically step by step from one premise to another in an attempt to arrive at an acceptable conclusion or explanation, as opposed to intuitive knowledge.

Disparate. Utterly unlike or different; essentially distinct or dissimilar; incapable of being compared.

Disquisition. A complete or systematic study or investigation; a formal essay, treatise, discussion or dissertation.

Disutility. The state or quality of being contrary to one's desires or well-being. The state or quality of producing undesirable conditions, such as those of annoyance, discomfort, irritation, uneasiness, pain, suffering or distress. The opposite or negative of utility.

Disutility of labor. The discomfort, uneasiness, inconvenience or pain inherent in human effort. Because of this quality men regard labor as a burden and prefer leisure to toil or labor.

HA. 65,131-38,611-17.

Doctrinaire, n. and adj. One who is dogmatic, impractical, visionary and uninterested in views differing from his own.

Dogma. A concept or principle accepted as absolute truth on the basis of unquestioned acceptance of an authority's statement to that effect rather than on the basis of logical reasoning or demonstrated proof.

Do ut des, (Latin). "I give as you give," or "I give that you may give."

Duopoly, duopolist. Literally, two sellers. A market situation in which two individuals or business organizations own or control the total supply of a given commodity or service. A duopolist is one of the two who own or control such a total supply.

HA. 363-64.

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