1. The General Economic Conditions for the Use of Money
Where the free exchange of goods and services is unknown, money is not wanted.
Preface to the Second German Edition
When the first edition of this book was published twelve years ago, the nations and their governments were just preparing for the tragic enterprise of the Great War. They were preparing, not merely by piling up arms and munitions in their arsenals, but much more by the proclamation and zealous propagation of the ideology of war. The most important economic element in this war ideology was inflationism.
Preface to the English Edition
The outward guise assumed by the questions with which banking and currency policy is concerned changes from month to month and from year to year. Amid this flux, the theoretical apparatus which enables us to deal with these questions remains unaltered. In fact, the value of economics lies in its enabling us to recognize the true significance of problems, divested of their accidental trimmings.
Introduction by Professor Lionel Robbins
Of all branches of economic science, that part which relates to money and credit has probably the longest history and the most extensive literature. The elementary truths of the Quantity Theory were established at a time when speculation on other types of economic problem had hardly yet begun. By the middle of the nineteenth century when, in the general theory of value, a satisfactory statical system had not yet been established, the pamphlet literature of money and banking was tackling, often with marked success, many of the subtler problems of economic dynamics.
Preface to the New Edition
Forty years have passed since the first German-language edition of this volume was published. In the course of these four decades the world has gone through many disasters and catastrophes. The policies that brought about these unfortunate events have also affected the nations’ currency systems. Sound money gave way to progressively depreciating fiat money. All countries are today vexed by inflation and threatened by the gloomy prospect of a complete breakdown of their currencies.
On March 13 Americans will, in their tolerant nature, acquiesce once again to a government initiated (and hardly popular) loss of one hour, and the setting of clocks out of sync with our planet’s celestial rhythm.
The Niskanen Center in Washington, D.C, bills itself as a “libertarian think tank:” but its conception of libertarianism is one that many of us will find surprising. Jerry Taylor, the founder and president of the Center, in an article of March 10, “Do Libertarians Want Freedom or Not?” argues that libertarians ought to be sympathetic to welfare measures and legislation that restricts freedom of association to promote civil rights.
If we were to ask readers to list the most important Austrian economists, most people would probably name Menger, Mises, Hayek, and Rothbard. But probably very few would think to include Frank Albert Fetter (1863–1949) among the luminaries of the tradition. This is unfortunate, because Fetter’s work, although neglected, is actually the source of some of the greatest insights in Austrian economics, and deeply influenced Mises, Rothbard, and others.
Not so long ago the idea of negative interest rates seemed absurd. Now, as The New York Times reports, over $7 trillion in debt the world over make lenders yield instead of the other way around. But negative rates haven’t stimulated anything but the occasional bubble. What monetary treachery do the money mandarins have up their sleeves beyond creating enormous amounts of central bank credit and driving rates underwater?
Libertarianism doesn’t often attract attention from The Atlantic, but a recent article, “The Information Revolution’s Dark Turn,” features philosopher Alistair Duff who attacks libertarianism in general, and Murray Rothbard specifically. Unfortunately, the article misrepresents libertarianism, but does so in a superficially plausible way. Many critics of libertarianism, I suspect, view it in the same way the article does.
