Ulrich Fehl, professor emeritus at Marburg University, passed away November 9, 2019. Prof. Fehl is remembered in this tribute by his student, Peter Engelhard
Ulrich Fehl, professor emeritus at Marburg University, passed away November 9, 2019. Prof. Fehl is remembered in this tribute by his student, Peter Engelhard
Capitalists and entrepreneurs serve distinct functions in the real economy. Capitalists save money that then maintains production processes until final goods are produced. Entrepreneurs adjust the capital structure in light of uncertainty to produce the most desired goods. Capitalists are rewarded with interest, entrepreneurs with profit.
Over eighty years ago, Keynes condemned the rentier and welcomed his future disappearance. Following in his footsteps, politicians and central bankers today are ever closer to effectively bringing this about.
If you've wanted to read Human Action, this is your opportunity to hear it explained by great economists and scholars!
Central banks have done nothing to end the boom-and-bust cycle. Instead, their unscrupulous interventions in credit markets just prolong the boom. But it's a huge mistake to assume that bringing market interest rates to zero will create a perpetual boom.
The demand for goods is not constrained by the amount of money, but by the production of goods and services available to trade for money.
In order to expand production and increase productivity — and thus increase the standard of living — it is necessary to use capital. And so it makes sense to pay interest on capital lent, so as to encourage the maintenance and production of capital for the future.
Presented at the Mises Institute's "First Annual Advanced Instructional Conference in Austrian Economics" at Stanford University.
Central banks can only distort and mask real interest rates with monetary policy. Interest rates are really set by each individual's time preference.
