The Theory of Money and Credit - Ludwig von Mises [0]
of
Money and Credit
by
Ludwig von Mises
New edition enlarged with an essay on monetary reconstruction
Translated from the German by H.E. Batson
This Kindle edition published by
Signalman Publishing
Orlando, 2008
Table of Contents
Preface to the New Edition
Introduction by Professor Lionel Robbins
Preface to the English Edition
Preface to the Second German Edition
PART ONE: THE NATURE OF MONEY
Chapter 1. The Functions of Money
Chapter 2. On the Measurement of Value
Chapter 3. The Various Kinds of Money
Chapter 4. Money and the State
Chapter 5. Money as an Economic Good
Chapter 6. The Enemies of Money
PART TWO: THE VALUE OF MONEY
Chapter 7. The Concept of the Value of Money
Chapter 8. The Determinants of the Objective Exchange-Value, or Purchasing Power, of Money
Chapter 9. The Problem of the Existence of Local Differences in the Objective Exchange-Value of Money
Chapter 10. The Exchange-Ratio Between Money of Different Kinds
Chapter 11. The Problem of Measuring the Objective Exchange-Value of Money and Variations in it
Chapter 12. The Social Consequences of Variations in the Objective Exchange-Value of Money
Chapter 13. Monetary Policy
Chapter 14. The Monetary Policy of Etatism
PART THREE: MONEY AND BANKING
Chapter 15. The Business of Banking
Chapter 16. The Evolution of Fiduciary Media
Chapter 17. Fiduciary Media and the Demand for Money
Chapter 18. The Redemption of Fiduciary Media
Chapter 19. Money, Credit, and Interest
Chapter 20. Problems of Credit Policy
PART FOUR: MONETARY RECONSTRUCTION
Chapter 21. The Principle of Sound Money
Chapter 22. Contemporary Currency Systems
Chapter 23. The Return to Sound Money
Appendix A. On the Classification of Monetary Theories
Appendix B. Translator’s Note on the Translation of Certain Technical Terms
Preface to the New Edition
Forty years have passed since the first German-language edition of this volume was published. In the course of these four decades the world has gone through many disasters and catastrophes. The policies that brought about these unfortunate events have also affected the nations' currency systems. Sound money gave way to progressively depreciating fiat money. All countries are today vexed by inflation and threatened by the gloomy prospect of a complete breakdown of their currencies.
There is need to realize the fact that the present state of the world and especially the present state of monetary affairs are the necessary consequences of the application of the doctrines that have got hold of the minds of our contemporaries. The great inflations of our age are not acts of God. They are man-made or, to say it bluntly, government-made. They are the offshoots of doctrines that ascribe to governments the magic power of creating wealth out of nothing and of making people happy by raising the "national income."
One of the main tasks of economics is to explode the basic inflationary fallacy that confused the thinking of authors and statesmen from the days of John Law down to those of Lord Keynes. There cannot be any question of monetary reconstruction and economic recovery as long as such fables as that of the blessing of "expansionism" form an integral part of official doctrine and guide the economic policies of the nations.
None of the arguments that economics advances against the inflationist and expansionist doctrine is likely to impress demagogues. For the demagogue does not bother about the remoter consequences of his policies. He chooses inflation and credit expansion although he knows that the boom they create is short-lived and must inevitably end in a slump. He may even boast of his neglect of the long-run effects. In the long run, he repeats, we are all dead; it is only the short run that counts.
But the question is, how long will the short run last? It seems that statesmen and politicians have considerably overrated the duration of the short run. The correct diagnosis of the present state of affairs is this: We