Murray Rothbard called the central puzzle of the business cycle the “cluster of entrepreneurial error.” During the boom, most entrepreneurs and investors appear to be geniuses, earning extraordinary profits year after year. During the bust, their fortunes are suddenly reversed, and they seem like dunces and suffer losses year after year.
Milton Friedman, interviewed in Barron’s (August 24, 1998), was asked: Q: You were acquainted with the Austrian economist Friedrich Hayek and also are familiar with the work of Ludwig von Mises and his American disciple, Murray Rothbard. When you were talking about bad investments, you were alluding to Austrian business-cycle theory. There is a
The Free Market 16, no. 1 (January 1998) When the IMF declares a country an “economic miracle,” look out. A financial crisis cannot be far behind. First it was Japan, the juggernaut that was said to be on the verge of supplanting the U.S. as an economic superpower. Then it was Mexico, the model of how former banana republics can be transformed
The Free Market 16, no. 12 (December 1998) With huge segments of the world economy mired in depression, can we conclude that capitalism has failed or that the market behaves irrationally? That seems to be the consensus among many commentators, so we hear a wide range of calls for government intervention to patch things up. Monetarists are
Paul Krugman smears with a broad brush when he condemns the Austrian theory of the business cycle as the “hangover theory” ( Slate , December 3, 1998). Does he intend to reject wholesale the idea that artificial booms (and drinking binges) lead to busts (and hangovers)? If so, he condemns much more than the Austrian theory of boom and bust.
What is the Mises Institute?
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.