Famous Libertarians Part 4
Ludwig von Mises
Ludwig Heinrich Edler von Mises (German pronunciation:
[ˈluːtvɪç fɔn ˈmiːzəs]; September 29, 1881 – October 10, 1973) was an Austrian-American
economist,
historian,
philosopher,
author, and
classical liberal who had a significant influence on the modern
Libertarian movement and the
Austrian School.
Mises wrote and lectured extensively on behalf of
classical liberalism and is seen as one of the leaders of the
Austrian School of economics.
[16] In his
treatise on economics,
Human Action, Mises introduced
praxeology as a more general conceptual foundation of the social sciences and established that economic laws were only arrived at through the means of
methodological individualism firmly rejecting
positivism and
materialism as a foundation for the social sciences. Many of his works, including
Human Action, were on two related economic themes:
- monetary economics and inflation;
- the differences between government controlled economies and free markets.
Mises in his library
Mises argued that money is demanded for its usefulness in purchasing other goods, rather than for its own sake and that any unsound
credit expansion causes business cycles. His other notable contribution was his argument that
socialism must fail economically because of the
economic calculation problem – the impossibility of a socialist government being able to make the economic calculations required to organize a complex economy. Mises projected that without a
market economy there would be no functional
price system, which he held essential for achieving rational and efficient allocation of capital goods to their most productive uses. If capital goods are the subject of neither rent nor exchange, as per private ownership of those means of production, then no barter terms or money prices can arise for them. Without the common nominal index of money pricing that allows comparison of costs of production to likely revenues, there can be no rational allocation of diverse capital goods in the production of diverse consumer goods whose production requires some use of scarce capital. In a socialist society, capital is not distributed according to the more efficient—thus profitable—capital structures, but rather to any use a theoretical socialist planner sees fit without the aid of monetary price signals to compare the profitability in a given use of capital.