The Theory of Money and Credit - Ludwig von Mises [8]
It is equally hard to understand how the assertion could have been made that the experience of recent years has necessitated a revision of economics. The tremendous and sudden changes in the value of money that we have experienced have been nothing new to anybody acquainted with currency history; neither the variations in the value of money, nor their social consequences, nor the way in which the politicians reacted to either, were new to economists. It is true that these experiences were new to many etatists, and this is perhaps the best proof that the profound knowledge of history professed by these gentlemen was not genuine but only a cloak for their mercantilistic propaganda.
The fact that the present work, although unaltered in essentials, is now published in a rather different form from that of the first edition is not due to any such reason as the impossibility of explaining new facts by old doctrines. It is true that, during the twelve years that have passed since the first edition was published, economics has made strides that it would be impossible to ignore. And my own occupation with the problems of catallactics has led me in many respects to conclusions that differ from those of the first edition. My attitude toward the theory of interest is different today from what it was in 1911; and although, in preparing this as in preparing the first edition, I have been obliged to postpone any treatment of the problem of interest (which lies outside the theory of indirect exchange), in certain parts of the book it has nevertheless been necessary to refer to the problem. Again, on the question of crises my opinions have altered in one respect: I have come to the conclusion that the theory which I put forward as an elaboration and continuation of the doctrines of the Currency School is in itself a sufficient explanation of crises and not merely a supplement to an explanation in terms of the theory of direct exchange, as I supposed in the first edition.
Further I have become convinced that the distinction between statics and dynamics cannot be dispensed with even in expounding the theory of money. In writing the first edition, I imagined that I should have to do without it, in order not to give rise to any misunderstandings on the part of the German reader. For in an article that had appeared shortly before in a widely read symposium, Altmann had used the concepts "static" and "dynamic," applying them to monetary theory in a sense that diverged from the terminology of the modern American school. [1] Meanwhile, however, the significance of the distinction between statics and dynamics in modern theory has probably become familiar to everybody who, even if not very closely, has followed the development of economics. It is safe to employ the terms nowadays without fear of their being confused with Altmann's terminology. I have in part revised the chapter on the social consequences of variations in the value of money in order to clarify the argument. In the first edition the chapter on monetary policy contains long historical discussions; the experiences of recent years afford sufficient illustrations of the fundamental argument to allow these discussions now to be dispensed with.
A section on problems of banking policy of today has been added, and one in which the monetary theory and policy of the etatists are briefly examined.