"The Causes of the Economic Crisis" by Ludwig von Mises

This book refutes the socialists and Keynesian, as well as anyone who believes that the printing press can provide a way out of trouble. Mises shows who was responsible for driving the world into economic calamity. It was the inevitable effects of the government's monopoly over money and banking.



Just as in his attack on socialism, here he was brilliant and brave and prescient. Mises was there, before and after. He was writing about contemporary events. He issued the warnings that the world did not heed, the warnings we must heed today.

Contents
FOREWORD by Frank Shostak
INTRODUCTION by Percy L. Greaves, Jr.
CHAPTER 1—STABILIZATION OF THE MONETARY UNIT —FROM THE VIEWPOINT OF THEORY (1923)
I. The Outcome of Inflation
1. Monetary Depreciation
2. Undesired Consequences
3. Effect on Interest Rates
4. The Run from Money
5. Effect of Speculation
6. Final Phases
7. Greater Importance of Money to a Modern Economy
II. The Emancipation of Monetary Value From the Influence of Government
1. Stop Presses and Credit Expansion
2. Relationship of Monetary Unit to World Money —Gold
3. Trend of Depreciation
III. The Return to Gold
1. Eminence of Gold
2. Sufficiency of Available Gold
IV. The Money Relation
1. Victory and Inflation
2. Establishing Gold “Ratio”
V. Comments on the “Balance of Payments” Doctrine
1. Refined Quantity Theory of Money
2. Purchasing Power Parity
3. Foreign Exchange Rates
4. Foreign Exchange Regulations
VI. The Inflationist Argument
1. Substitute for Taxes
2. Financing Unpopular Expenditures
3. War Reparations
4. The Alternatives
5. The Government’s Dilemma
VII. The New Monetary System
1. First Steps
2. Market Interest Rates
VIII. The Ideological Meaning of Reform
1. The Ideological Conflict
Appendix: Balance of Payments and Foreign Exchange Rates
CHAPTER 2—MONETARY STABILIZATION AND CYCLICAL POLICY (1928)
A. Stabilization of the Purchasing Power of the Monetary Unit
I. The Problem
1. “Stable Value” Money
2. Recent Proposals
II. The Gold Standard
1. The Demand for Money
2. Economizing on Money
3. Interest on “Idle” Reserves
4. Gold Still Money
III. The “Manipulation of the Gold Standard”
1. Monetary Policy and Purchasing Power of Gold
2. Changes in Purchasing Power of Gold
IV. “Measuring” Changes in the Purchasing Power of the Monetary Unit
1. Imaginary Constructions
2. Index Numbers
V. Fisher’s Stabilization Plan
1. Political Problem
2. Multiple Commodity Standard
3. Price Premium
4. Changes in Wealth and Income
5. Uncompensatable Changes
VI. Goods-Induced and Cash-Induced Changes in the Purchasing Power of the Monetary Unit
1. The Inherent Instability of Market Ratios
2. The Misplaced Partiality to Debtors
VII. The Goal of Monetary Policy
1. Liberalism and the Gold Standard
2. “Pure” Gold Standard Disregarded
3. The Index Standard
B. Cyclical Policy to Eliminate Economic Fluctuations
I. Stabilization of the Purchasing Power of the Monetary Unit and Elimination of the Trade Cycle
1. Currency School’s Contribution
2. Early Trade Cycle Theories
3. The Circulation Credit Theory
II. Circulation Credit Theory
1. The Banking School Fallacy
2. Early Effects of Credit Expansion
3. Inevitable Effects of Credit Expansion on Interest Rates
4. The Price Premium 109
5. Malinvestment of Available Capital Goods
6. “Forced Savings”
7. A Habit-forming Policy
8. The Inevitable Crisis and Cycle
III. The Reappearance of Cycles
1. Metallic Standard Fluctuations
2. Infrequent Recurrences of Paper Money Inflations
3. The Cyclical Process of Credit Expansions
4. The Mania for Lower Interest Rates
5. Free Banking
6. Government Intervention in Banking
7. Intervention No Remedy
IV. The Crisis Policy of the Currency School
1. The Inadequacy of the Currency School
2. “Booms” Favored
V. Modern Cyclical Policy
1. Pre-World War I Policy
2. Post-World War I Policies
3. Empirical Studies
4. Arbitrary Political Decisions
5. Sound Theory Essential
VI. Control of the Money Market
1. International Competition or Cooperation
2. “Boom” Promotion Problems
3. Drive for Tighter Controls
VII. Business Forecasting for Cyclical Policy and the Businessman
1. Contributions of Business Cycle Research
2. Difficulties of Precise Prediction
VIII. The Aims and Method Cyclical Policy
1. Revised Currency School Theory
2. “Price Level” Stabilization
3. International Complications
4. The Future
3—THE CAUSES OF THE ECONOMIC CRISIS (1931)
I. The Nature and Role of the Market
1. The Marxian “Anarchy of Production” Myth
2. The Role and Rule of Consumers
3. Production for Consumption
4. The Perniciousness of a “Producers’ Policy”
II. Cyclical Changes in Business Conditions
1. Role of Interest Rates
2. The Sequel of Credit Expansion
III. The Present Crisis
A. Unemployment
1. The Market Wage Rate Process
2. The Labor Union Wage Rate Concept
3. The Cause of Unemployment
4. The Remedy for Mass Unemployment
5. The Effects of Government Intervention
6. The Process of Progress
B. Price Declines and Price Supports
1. The Subsidization of Surpluses
2. The Need for Readjustments
C. Tax Policy
1. The Anti-Capitalistic Mentality
D. Gold Production
1. The Decline in Prices
2. Inflation as a “Remedy”
IV. Is There a Way Out?
1. The Cause of Our Difficulties
2. The Unwanted Solution
4—THE CURRENT STATUS OF BUSINESS CYCLE RESEARCH AND ITS PROSPECTS FOR THE IMMEDIATE FUTURE (1933)
I. The Acceptance of the Circulation Credit Theory of Business Cycles
II. The Popularity of Low Interest Rates
III. The Popularity of Labor Union Policy
IV. The Effect of Lower than Unhampered Market Interest Rates
V. The Questionable Fear of Declining Prices
5—THE TRADE CYCLE AND CREDIT EXPANSION: THE ECONOMIC CONSEQUENCES OF CHEAP MONEY (1946)
I. The Unpopularity of Interest
II. The Two Classes of Credit
III. The Function of Prices, Wage Rates, and Interest Rates
IV. The Effects of Politically Lowered Interest Rates
V. The Inevitable Ending
INDEX