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The Economics of Illusion

  • Economics of Illusion by L. Albert Hahn
March 9, 2007

Tags Booms and BustsBusiness CyclesOther Schools of Thought

L. Albert Hahn was one of the most highly regarded economists and bankers in Germany before World War II, but he was unknown in the United States until this translation of The Economics of Illusion appeared in 1949. He immigrated to the United States in 1940. This book is his frontal attack on the Keynesian system, which he calls "the economics of illusion." Hahn shows how government spending creates a false prosperity, and never more than in wartime. He explodes many of Keynes's fallacies — and with great precision too, because, it turns out, Hahn himself once advanced these same fallacies before he saw their errors. So he writes with the passion of a convert.

Ludwig von Mises thought very highly of Hahn's work, and none other than Henry Hazlitt has written the introduction to this classic anti-Keynesian text.

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NY: New York Institute of Finance, 1949.