Preface To The Third Spanish Edition

PREFACE TO THE THIRD SPANISH EDITION

In this, the third edition of Dinero, Crédito Bancario y Ciclos Económicos, an attempt has been made to preserve as far as possible the contents, structure, and page numbering of the two previous editions. However, changes have been necessary in certain cases, as I have taken this new opportunity to raise some additional arguments and points, both in the main text and in several footnotes. Also, the bibliography has been updated with the new editions and Spanish translations which have appeared in the four years since the previous edition, and with a few new books and articles which have a particular bearing on the topics covered in the book.Finally, the editor of the English version, Money, Bank Credit, and Economic Cycles,Judith Thommesen, very patiently and painstakingly verified hundreds of quotations in English and other languages against their original sources. A significant number of small misprints had been detected and have now been rectified, and thus her efforts have helped to make this third edition even more polished. I am deeply grateful to her, as well as to Dr. Gabriel Calzada, Associate Professor at the Universidad Rey Juan Carlos, for his assistance in reviewing and correcting certain bibliographic references.

In the interval since the publication of the previous edition, economic trends have been marked by the high fiduciary inflation and the sharp increase in public deficits necessary to finance the war in Iraq and to meet the rising costs which the “welfare state,” plagued by severe and insoluble problems, generates in most western countries. The money supply and the interest rate have been subject to further manipulation. In fact, the United States Federal Reserve lowered the rate to a historical minimum of 1 percent, thus preventing the necessary correction of the investment errors committed prior to the 2001 recession. The above circumstances have triggered a new speculative bubble in real estate markets, along with a dramatic rise in the price of the energy products and raw materials which are the object of almost unlimited demand on a worldwide scale, due to new investment projects undertaken mainly in the Asiatic basin, and particularly in China. Thus, we seem to be approaching the typical turning-point phase of the cycle, the phase which precedes every economic recession. Moreover, the very recent 180-degree turn in the monetary policy of the Federal Reserve, which has jacked up interest rates to 4 percent in only a few months, confirms the trend even further.

It is my hope that this new edition will help readers and scholars to better understand the economic phenomena of the world that surrounds them. May it also serve to convince specialists and framers of current economic policy that we must abandon social engineering in the monetary and financial sphere as soon as possible. The attainment of these goals will mean the complete fulfilment of one of my primary objectives.

Jesús Huerta de Soto
Formentor
August 28, 2005

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One such book is Roger W. Garrison’s Time and Money: The Macroeconomics of Capital Structure, published by Routledge in London and New York in 2001, three years after the appearance of the first Spanish edition of Money, Bank Credit, and Economic Cycles. Garrison’s text can be viewed as complementary to this one. His book is especially noteworthy, because in it he develops the Austrian analysis of capital and economic cycles in the context of the different paradigms of modern macroeconomics, and the approach and language he uses to do so are fully consistent with those used by the mainstream in our discipline. Hence, Garrison’s book will undoubtedly help build awareness among economists in general of the need to consider the Austrian perspective and its comparative advantages. However, I do feel that Garrison’s explanations are too mechanistic and that he falls short of providing sufficient justification for his analysis from the juridical-institutional standpoint. Nonetheless, I thought it advisable to promote the book’s translation into Spanish by a team of professors and disciples from my department at the Universidad Rey Juan Carlos. Dr. Miguel Ángel Alonso Neira led the team, and the translation has already been published in Spain under the title Tiempo y dinero: la macroeconomía en la estructura del capital (Madrid: Unión Editorial, 2005). Finally, we should recommend also the encyclopedic work of Ludwig van den Hauwe, Foundations of Business Cycle Research (Saarbrücken, Germany: VDM Verlag Dr. Müller, 2009).

The English edition was beautifully published in 2006 as Money, Bank Credit, and Economic Cycles under the auspices of the Ludwig von Mises Institute in Auburn, Alabama, thanks to the support of the Institute’s president, Llewellyn H. Rockwell.