[This article is featured in chapter 79 of Making Economic Sense by Murray Rothbard and originally appeared in the September, 1985 edition of The Free Market ] It was a scene familiar to any nostalgia buff: all-night lines waiting for the banks (first in Ohio, then in Maryland) to open; pompous but mendacious assurances by the bankers that all
Economic debates seem to have their own growing seasons. For stretches of time they may disappear, only to reappear in later years covering the same old ground again. The debate about the effects of deficits on interest rates, though temporarily stunted by the frosty winters of the Clinton years with its visions of budget surpluses, is back with
Economists of the Austrian School of economics define inflation differently than much of the mainstream of the economics profession. The typical mainstream intermediate macroeconomics textbook defines inflation as “[a]n increase in the overall level of prices” (Mankiw, Macroeconomics 5th Edition , 530). The eminent Austrian economist, Ludwig von
[An MP3 audio version of this article, read by Floy Lilley, is available for free download .] In the postwar hyperinflation, banknotes were so worthless that they were discarded like trash. (Hungary 1946) Increasing “Excess Reserves” The demise of fiat-money regimes around the world has become unmistakable. They can only be kept alive by central
Listen to the Audio Mises Wire version of this article. I. Warning against Fiduciary Media Early in the 20th century, Ludwig von Mises warned against the consequences of granting the government control over the money supply. Such a regime inevitably creates money through bank credit that is not backed by real savings—a type of money that Mises
Preventing the Banking Industry from Shrinking It may come as a surprise to many, but the relative size of the US commercial-banking industry has not declined following the so-called credit-market crisis, which developed in the second half of 2007. On the contrary, it has increased since then. While nominal GDP rose 4.2% from the second quarter of
Politicians intent on re-election have stirred up a media frenzy over “corporate governance,” exploiting the bankruptcies of a handful of companies like Enron and Worldcom. New accounting industry and corporate financial reporting rules are being imposed with reckless abandon in Washington, D.C. Yet the political class that seeks to grant itself
Beside signing appropriations bills containing $20 billion in pork before leaving town last week, the 106th lame-duck Republican Congress left another nasty surprise for individuals wanting to save money on their health care expenses: it failed to renew the pilot program for medical savings accounts (MSAs). MSAs were introduced in the U.S. four
It costs money to make money. This fact is not only true for businessmen, investors, and entrepreneurs, but also for the moneymakers themselves — the Department of the Treasury. To print bills or mint coins, the United States Mint and Bureau of Engraving and Printing must purchase all sorts of resources, including paper, ink, equipment, and
After months of higher fuel and food prices, I would have expected the outcry to happen sooner than the past week. Usually screams of despair about the cost of living come from special-interest groups representing the aged or the poor. But the siren came this time from my 88-year-old father-in-law. When the topic of the economy surfaced during a
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The Mises Institute is a non-profit organization that exists to promote teaching and research in the Austrian School of economics, individual freedom, honest history, and international peace, in the tradition of Ludwig von Mises and Murray N. Rothbard.
Non-political, non-partisan, and non-PC, we advocate a radical shift in the intellectual climate, away from statism and toward a private property order. We believe that our foundational ideas are of permanent value, and oppose all efforts at compromise, sellout, and amalgamation of these ideas with fashionable political, cultural, and social doctrines inimical to their spirit.