The use of mathematics necessarily leads the economist to distort reality by making the theory convenient for mathematical symbolism and manipulation. Mathematics takes over, and the reality of human action loses out.
It was the physiocrats who broke with centuries of sound economic reasoning and contributed to what would become, in the hands of Smith and Ricardo, a reactionary and obscurantist destruction of the correct analysis of value.
The Mises Circle in Houston, Texas. Sponsored by Jeremy S. Davis. Recorded 22 January 2011.
Fifty years ago, Rothbard saw the need for institutions to support scholarship, writing, publishing, and the exchange of ideas in the libertarian tradition. Otherwise, young people will turn to political activism and find themselves drifting left and right rather than staying on the path toward liberty.
The theory of profit/interest has major implications for the understanding of capital accumulation, the determination of real wages and the general standard of living, taxation, inflation/deflation, and the business cycle.
Without a dynamic price mechanism — trademark of a money-based, capitalist society — there can be no calculation, and without calculation there can be no advanced division of labor. Our society would be no more advanced than it was during the age of barter.
The honor of being called the "father of modern economics" belongs not to its usual recipient, Adam Smith, but to a gallicized Irish merchant, banker, and adventurer who wrote the first treatise on economics more than four decades before the publication of the Wealth of Nations.
