F.A. Hayek on Money,
the Business Cycle, and the Gold Standard

Preface by Danny Quah
Foreword by Toby Baxendale
Edited with an Introduction by Joseph T. Salerno

Copyright 2008 Ludwig von Mises Institute

Hayek photograph on back cover courtesy of The Cambridgeshire Collection, Cambridge Central Library.

For information, write the Ludwig von Mises Institute, 518 West Magnolia Avenue, Auburn, Alabama 36832, U.S.A. mises.org.

ISBN: 978-1-933550-22-0

The Ludwig von Mises Institute thanks
Toby Baxendale

for his magnificent sponsorship
of the publication of this book.

Economics never labels anything any more. Well, more accurately, it does; only now it hardly ever uses labels formed from people’s names.

It is with great pleasure that I fully support the reproduction of these works. I congratulate Lew Rockwell and his team for having the foresight to do this in honor of Hayek, one of the most important economists of the last century.

Friedrich A. Hayek was barely out of his twenties in 1929 when he published the German versions of the first two works in this collection, Monetary Theory and the Trade Cycle and “The Paradox of Saving.” The latter article was a long essay that was to become the core of his celebrated book and the third work in this volume, Prices and Production, the publication of which two years later made him a world-renowned economist by the age of thirty-two. But the young Hayek did not pause to savor his success.

The German essay,1 of which the following is a translation, represents an expanded version of a paper2 prepared for the meeting of the Verein für Sozialpolitik,3 held in Zurich in September 1928, and of some remarks contributed to the discussion at that meeting. Although, in revising the translation, I have made numerous minor alterations and additions (mainly confined to the footnotes), the general course of the argument has been left unchanged. The book, therefore, still shows signs of the particular aim with which it was written.

CHAPTER 1

I

CHAPTER 2

I