Mises Daily

This short chapter provides the link between Part II (Action Within the Framework of Society) and Part III (Economic Calculation) of the book.

Tough times require cutbacks and a beefing up of savings.

But what happened to the view that people have rights that restrict what government may do, even to promote overall "happiness"? Frank does not so much as mention it.

Since it's so important, the main point just made needs to be repeated: credit expansion creates an artificial economic inequality by showing up in the stock market and driving up stock prices. Since the stocks are owned mainly by wealthy people, they are the main beneficiaries of the process. The more substantial and the more prolonged the credit expansion is, the larger are the gains enjoyed by wealthy people more than anyone else.

By distorting relative prices and insisting on inefficient workplace rules, they certainly hamper the economy, no question about it. But it is wrong to blame unions for rising prices.

What government cannot do without causing even more problems is take positive action against symptoms, such as falling stocks or housing prices, rising unemployment, business failures, and falling incomes. This is precisely what caused the Great Depression to get its name instead of being called what it might have been called: the recession of 1929–1931.

In the present chapter, Mises argues that ideas control human destiny.

[This essay originally appeared as the final chapter of A New History of Leviathan (1972).]

Increased capital in proportion to labor is the only means of producing more without the number of workers increasing.

A number of the neoconservatives began as supporters of Trotsky; and, though their political allegiance has changed, their pattern of thought has not.