Business Cycles

The Austrian explanation of the boom-bust cycle makes more sense than any other explanation I've seen.

Hayek criticized Keynes for his neglect of the real structure of production, arguing that Keynes's predilection for concentrating on the immediate and purely monetary phenomena accompanying changes in money expenditure, together with his penchant for aggregative macro concepts (total profits, total investment), had led him into contradictory or untenable conclusions.

Government controlled fiat money is and will always be, by construction, fraudulent money.

One of our top priorities must be to get rid of a monetary system that contributes to artificial money creation and credit expansion and thus to recurring boom-bust episodes in production and employment.

Robert Murphy demonstrates in this excellent book a penetrating ability to explain the essence of fallacious economic doctrines. As he notes, three theories offer competing explanations of the Great Depression

Since the heart of credit is real savings, it is obvious that no government schemes, such as cleansing banks' balance sheets, can increase fully backed credit.

In the same way, the path to economic recovery is to allow markets to channel specialized resources to their highest-valued uses, not to dump taxpayer funds on whatever firms and industries happen to be ready for them — or politically connected.

We must make them realize what they owe to the much vilified "economic freedom," the system of free enterprise and capitalism.

Time after weary time, it is the mainstream and Keynesian economists (who ridicule and ignore Austrian economics as unscientific) whose predictions are utterly refuted by the events of history.

Presented as part of the Mises Institute’s Brown Bag Seminar series on May 21, 1997 in Auburn, Alabama.