Rothbard A to Z

IDEAS

Machines are embodied ideas.

Classical Economics, p. 374

… if our ideas are determined, then we have no way of freely revising our judgments and of learning truth—whether the truth of determinism or of anything else.

Economic Controversies, p. 7

… ideas, freely adopted, determine social institutions, and not vice versa …

Economic Controversies, p. 9

… no government, however powerful or coercive, can, in the long run, rule by force alone … since force, in the long run, lies with the majority of the ruled rather than with the minority of the ruling elite, to maintain their rule the ruling elite must persuade the majority to give it their support. In other words, in the long run, ideas held by the people rule, for good or for ill. Ideas trump brute force.

Economic Controversies, p. 194

… thinkers can slip into error and inconsistency, and even write gibberish on occasion. Many historians of thought do not seem able to recognize this simple fact.

Economic Thought Before Adam Smith, p. 16

… a person’s environment, physical or social, does not “determine” the ideas and knowledge with which he will emerge as an adult. It is a fundamental fact of human nature that a person’s ideas are formed for himself; others may influence them, but none can determine absolutely the ideas and values which the individual will adopt or maintain through life.

Education: Free and Compulsory, p. 2

… man’s mind, using the ideas it has learned, directs his energy in transforming and reshaping matter into ways to sustain and advance his wants and his life. Behind every “produced” good, behind every man-made transformation of natural resources, is an idea directing the effort, a manifestation of man’s spirit.

Ethics of Liberty, p. 31

… force per se cannot rule. Even in the most despotic dictatorship, the government can only persist when it is backed by the majority of the population. In the long run, ideas, not force, rule …

Irrepressible Rothbard, p. 8

… ideas are the key; and spreading correct doctrine is a necessary part of any libertarian strategy.

Irrepressible Rothbard, p. 39

… ideas, good or bad, often keep marching on …

Irrepressible Rothbard, p. 280

Ideas need not be a highly abstract level …

Libertarian Forum v. 1, p. 520

… there is no such thing as Platonic ideas floating in some sort of abstract vacuum … ideas are held, for good or bad, by people …

Libertarian Forum v. 2, p. 1133

Bad and discredited ideas, it seems, never die.

Making Economic Sense, p. 123

Ideas have consequences …

Making Economic Sense, p. 391

… an actor chooses means from his environment, in accordance with his ideas, to arrive at an expected end.

Man, Economy, and State with Power and Market, p. 4

… for any action, there must be some plan or idea of the actor about how to use things as means, as definite pathways, to desired ends. Without such plans or ideas, there would be no action.

Man, Economy, and State with Power and Market, p. 11

… ideas can be refuted only by other ideas …

Man, Economy, and State with Power and Market, p. 975

Resistance of an organization to new ideas has occurred significantly even in efficient, alert corporations—how much more would it occur in government, where there is neither the incentive nor the possibility of a profit-and-loss check on its efficiency!

Science, Technology, and Government, p. 62

IDEOLOGY

… an opposition or revolutionary movement, or indeed any mass movement from below, cannot be primarily guided by ordinary economic motives. For such a mass movement to form, the masses must be fired up, must be aroused to a rare and uncommon pitch of fervor against the existing system. But for that to happen, the masses must be fired up by ideology. Only ideology, guided either by a new religious conversion or by a passion for justice, can arouse the interest of the masses (in the current jargon, “raise their consciousness”) and lead them out of the morass of daily habit into an uncommon and militant activity in opposition to the state.

Conceived in Liberty v. 3, p. 353; p. 1117

… only a fiercely held ideology, centering on a passion for justice, can keep the intellectuals to the rigorous path of truth. …

… statists tend to be governed by economic motivation, with ideology serving as a smokescreen for such motives, while libertarians or antistatists are ruled principally and centrally by ideology, with economic defense playing a subordinate role.

Conceived in Liberty v. 3, p. 354; p. 1118

… the majority must be persuaded by ideology that their government is good, wise and, at least, inevitable, and certainly better than other conceivable alternatives. Promoting this ideology among the people is the vital social task of the “intellectuals.” For the masses of men do not create their own ideas, or indeed think through these ideas independently; they follow passively the ideas adopted and disseminated by the body of intellectuals. The intellectuals are, therefore, the “opinion-molders” in society.

Egalitarianism as a Revolt Against Nature, pp. 62–63

Ideology has always been vital to the continued existence of the State, as attested by the systematic use of ideology since the ancient Oriental empires. The specific content of the ideology has, of course, changed over time, in accordance with changing conditions and cultures. In the Oriental despotisms, the Emperor was often held by the Church to be himself divine; in our more secular age, the argument runs more to “the public good” and the “general welfare.” But the purpose is always the same: to convince the public that what the State does is not, as one might think, crime on a gigantic scale, but something necessary and vital that must be supported and obeyed. The reason that ideology is so vital to the State is that it always rests, in essence, on the support of the majority of the public.

Ethics of Liberty, pp. 168–69

Lack of ideology simply means lack of any ideology that differs at all fundamentally from the ruling system.

Libertarian Forum v. 1, p. 5

… in a profound sense that the “bad guys” in history are largely economically motivated, and the “good guys” ideologically motivated …

… the “bad guys,” the statists, are governed by economic motivation with ideology serving as a smokescreen for such motives, whereas the “good guys,” the libertarians or anti-statists, are ruled principally and centrally by ideology, with economic defense playing a subordinate role.

Libertarian Forum v. 1, pp. 520–21

When the “bad guys” act … when they form a State … their primary motivation is economic: to increase their plunder at the expense of the subject and taxpayer. The ideology that they profess and that is formulated and spread through society by the Court Intellectuals is merely an elaborate rationalization for their venal economic interests. The ideology is the smokescreen for their loot, the fictitious clothes spun by the intellectuals to hide the naked plunder of the Emperor. The task of the historian, then, is to penetrate to the essence of the transaction, to strip the ideological garb from the Emperor State and to reveal the economic motive at the heart of the issue.

Libertarian Forum v. 1, p. 521

It is only ideology, guided either by a new religious conversion, or by a passion for justice, that can arouse the interest of the masses (in the current jargon to “raise their consciousness”) and lead them out of their morass of daily habit into an uncommon and militant activity in opposition to the State. This is not to say that an economic motive, a defense for example of their property, does not play an important role. But to form a mass movement in opposition means that they must shake off the habits, the daily mundane concerns of several lifetimes, and become politically aroused and determined as never before in their lives. Only a common and passionately believed in ideology can perform that role. …

By the very nature of the masses, it is impossible for them to arrive at such a revolutionary or opposition ideology on their own. Habituated as they are to their narrow and daily rounds, uninterested in ideology as they normally are, concerned with daily living, it is impossible for the masses to lift themselves up by their own bootstraps to hammer out an ideological movement in opposition to the existing State.… In contrast to the statist Court Intellectual, whose role is a junior partner in rationalizing the economic interests of the ruling class, the radical or opposition intellectual’s role is the centrally guiding one of formulating the opposition or revolutionary ideology and then to spread the ideology to the masses, thereby welding them into a revolutionary movement.

… setting oneself up in opposition to an existing State is a lonely, thorny, and often dangerous road.… only a fiercely held ideology, centering on a passion for justice, can keep the intellectual to the rigorous path of truth.

Libertarian Forum v. 1, p. 521

No ideological revolution proceeds on a continuous straight line from birth to triumphant victory. Every such revolution proceeds in a zig-zag manner.

Libertarian Forum v. 2, p. 1191

The problem of an ideology is not whether it is put forth in an emotional, a matter-of-fact, or a dull manner. The question is whether or not the ideology is correct.

Strictly Confidential, p. 33

… every major social change came about, and necessarily so, through an ideological revolution.

Strictly Confidential, p. 44

IMMIGRATION

… the private ownership of all streets would resolve the problem of the “human right” to freedom of immigration. There is no question about the fact that current immigration barriers restrict not so much a “human right” to immigrate, but the right of property owners to rent or sell property to immigrants. There can be no human right to immigrate, for on whose property does someone else have the right to trample?

Ethics of Liberty, p. 119

The libertarian society would resolve the entire “immigration question” within the matrix of absolute property rights.

Ethics of Liberty, p. 120

Libertarians favor freedom of movement and immigration …

Libertarian Forum v. 2, p. 1027

Someone who emigrates from one country to another in expectation of a higher wage is in this sense an entrepreneur and may obtain a monetary profit or loss from his move.

Man, Economy, and State with Power and Market, p. 604

Caught in an insoluble contradiction are those believers in the free market and private property who still uphold immigration barriers. They can do so only if they concede that the State is the owner of all property, but in that case they cannot have true private property in their system at all.

Man, Economy, and State with Power and Market, p. 1147

IMPERIALISM

… far from being an inherent stage of capitalism, modern imperialism was a throwback to the pre-capitalist imperialism of earlier ages, but with a minority of privileged capitalists now joined to the feudal and military castes in promoting imperialist aggression.

Egalitarianism as a Revolt Against Nature, p. 30n5

… the libertarian must condemn imperialism.

Ethics of Liberty, p. 196

Aside from being a necessary condition to the achievement of justice, national liberation is the only solution to the great world problems of territorial disputes and oppressive national rule.

Libertarian Forum v. 1, p. 45

“National self-determination” is only a harmless metaphor for a movement against imperial dictation.

Libertarian Forum v. 1, p. 212

Imperialism, then, cannot win …

Libertarian Forum v. 1, p. 557

The logic of empire promises only permanent war, permanent tyranny, and permanent injustice, and, in the end, failure even on its own terms.

Libertarian Forum v. 2, p. 1037

INDEX CALCULATION

… the price, or purchasing power, of the money unit will be an array of the quantities of alternative goods and services that can be purchased for a dollar. Since the array is heterogeneous and specific, it cannot be summed up in some unitary price-level figure.

Economic Controversies, p. 687

… there is no such thing as a single, scientific index of the movement of general prices. All such indexes are strictly arbitrary, and there are a huge number of possible indexes, all of which create insuperable economic distortions.… Every individual and group in the country experiences different cost-of-living “indexes” …

Libertarian Forum v. 1, p. 470

Every person experiences his own “inflation rate,” depending on what he customarily buys. …

There is, then, no “scientific” or unflawed measurement of the movement of consumer prices. The only excuse for any such index is that it be consistent, that is, whatever its flaws, it be consistent over the years so that movements in the index can have a substantial degree of coherent meaning. To change the nature of such indices is to deceive, for it is to abandon consistency and to doctor the data for political effect.

Libertarian Forum v. 2, p. 1024

… the concept of an average for prices is a common fallacy. …

… for several things to be averaged together, they must first be totaled. In order to be thus added together, the things must have some unit in common, and it must be this unit that is added. Only homogeneous units can be added together.

Man, Economy, and State with Power and Market, p. 838

… any concept of average price level involves adding or multiplying quantities of completely different units of goods, such as butter, hats, sugar, etc., and is therefore meaningless and illegitimate.

Man, Economy, and State with Power and Market, p. 839

… there is no scientific, objective means of measuring changes in the value of money. Scientifically, one index number is just as arbitrary and bad as any other.

Man, Economy, and State with Power and Market, p. 848

The concept of an average for prices is a common fallacy. It is easy to demonstrate that prices can never be averaged for different commodities …

Strictly Confidential, p. 247

Any form of averaged price-level concept involves the adding or multiplying of the quantities of completely different units of goods, such as butter, hats, sugar, etc., and is therefore meaningless and illegitimate. Even pounds of sugar and pounds of butter cannot be added together …

Strictly Confidential, p. 248

INDIVIDUALISM

The true science of man bases itself upon the existence of individual human beings, upon individual life and consciousness.… The true science of man concentrates on the individual as of central, epistemological and ethical importance.

Economic Controversies, p. 23

Individual valuation is the keystone of economic theory.

Economic Controversies, p. 289

The glory of the human race is the uniqueness of each individual, the fact that every person, though similar in many ways to others, possesses a completely individuated personality of his own. It is the fact of each person’s uniqueness—the fact that no two people can be wholly interchangeable—that makes each and every man irreplaceable and that makes us care whether he lives or dies, whether he is happy or oppressed. And, finally, it is the fact that these unique personalities need freedom for their full development that constitutes one of the major arguments for a free society.

Economic Controversies, p. 601

… libertarians, if they have any personal philosophy beyond freedom from coercion, are supposed to be at the very least individualists, and if they are individualists they should be heartily in favor of each individual’s advancing of his own “ego.” What’s, wrong with ego?

Libertarian Forum v. 1, p. 184

The first truth to be discovered about human action is that it can be undertaken only by individual “actors.” Only individuals have ends and can act to attain them.

Man, Economy, and State with Power and Market, p. 2

… every individual knows the data of his own inner self best—by the very fact that each has a separate mind and ego.

Man, Economy, and State with Power and Market, p. 1301

Rugged individualism, also known as social Darwinism, is inhumane and illogical; it is based on a completely false use of analogy and an absurd theory of ethics.

Rothbard vs. the Philosophers, p. 50

The Rugged Individualist glorifies struggle and condemns the easy path. Since the whole process of civilization has been the cumulative attempt to make it easier to satisfy man’s desires, the Rugged Individualist is of necessity opposed to civilization.

Rothbard vs. the Philosophers, p. 55

… rugged individualism really turns out to be rugged collectivism.

Rothbard vs. the Philosophers, p. 57

INDUSTRIAL REVOLUTION

The Industrial Revolution freed the masses of men from their abject poverty and hopelessness—a poverty aggravated by a growing population that could find no employment in the frozen economy of pre-industrial Europe. The Industrial Revolution, the achievement of free-market capitalism, meant a steady and rapid improvement in the living conditions and the quality of life for the broad masses of people, for workers and consumers alike …

Economic Controversies, p. 660

… free market capitalism arrived full scale with the Industrial Revolution in Western Europe, a revolution that brought about a remarkable release of creative energy and productive ability, an enormous increase of production.

Economic Controversies, p. 676

… the Industrial Revolution in England, spurred by a roughly free-market economy, enormously improved rather than crippled the standard of living of the average consumer and worker in England.

Libertarian Forum v. 1, p. 516

Mass consumption was a feature of the Industrial Revolution from the beginning …

Man, Economy, and State with Power and Market, p. 972

INFANT INDUSTRIES

… there is no more need for government to protect a new, young, industry from foreign competition than there is to protect it from domestic competition.

… Any government subsidizing of a new industry will funnel too many resources into that industry as compared to older firms …

Making Economic Sense, p. 364

… “infancy” for protectionists never ends, and the “temporary” period of support stretched on forever. …

… In reality, protection is a subsidy for the inefficient and tends to perpetuate and aggravate the inefficiency, be the industry young, mature, or “old.” A protective tariff or quota provides a shelter for inefficiency and mismanagement to multiply … The result is a perpetually uncompetitive industry.… Only exposure to competition can make a firm or an industry competitive.

Making Economic Sense, p. 382

Logically, the infant industry argument must be applied to interlocal and interregional trade as well as international. Failure to realize this is one of the reasons for the persistence of the argument. Logically extended, in fact, the argument would have to imply that it is impossible for any new firm to exist and grow against the competition of older firms, wherever their locations.

Man, Economy, and State with Power and Market, p. 1107

Logically, the “infant industry” argument must apply to interlocal and regional as well as national trade, and failure to apply it to those areas is one of the reasons for the persistence of this point of view. Logically extended, the argument would imply that it is difficult or impossible for any firm to exist and grow against the competition of existing firms in the industry, wherever located. Illustrations of this growth, and of decay of old firms, however, are innumerable …

Strictly Confidential, p. 252

INFLATION

… persistent inflation is brought about by continuing and chronic increases in the supply of money …

America’s Great Depression, p. xxvii

The fault of inflation is not in business “monopoly,” or in union agitation, or in the hunches of speculators, or in the “greediness” of consumers; the fault is in the legalized counterfeiting operations of the government itself. For the government is the only institution in society with the power to counterfeit—to create new money. So long as it continues to use that power, we will continue to suffer from inflation, even unto a runaway inflation that will utterly destroy the currency.

America’s Great Depression, p. xxviii

If one price goes up and another down, we may conclude that demand has shifted from one industry to another; but if all prices move up or down together, some change must have occurred in the monetary sphere. Only changes in the demand for, and/or the supply of, money will cause general price changes. An increase in the supply of money, the demand for money remaining the same, will cause a fall in the purchasing power of each dollar, i.e., a general rise in prices; conversely, a drop in the money supply will cause a general decline in prices. On the other hand, an increase in the general demand for money, the supply remaining given, will bring about a rise in the purchasing power of the dollar (a general fall in prices); while a fall in demand will lead to a general rise in prices. Changes in prices in general, then, are determined by changes in the supply of and demand for money.

America’s Great Depression, pp. 6–7

Government is inherently inflationary …

America’s Great Depression, p. 24

Inflation is a form of taxation, since the government can create new money out of thin air and use it to bid away resources from private individuals, who are barred by heavy penalty from similar “counterfeiting.” Inflation therefore makes a pleasant substitute for taxation for the government officials and their favored groups, and it is a subtle substitute which the general public can easily—and can be encouraged to—overlook. The government can also pin the blame for the rising prices, which are the inevitable consequence of inflation, upon the general public or some disliked segments of the public, e.g., business, speculators, foreigners.

America’s Great Depression, p. 24

… the overwhelmingly dominant cause of the virus of chronic price inflation is inflation, or expansion, of the supply of money. Just as an increase in the production or supply of cotton will cause that crop to be cheaper on the market; so will the creation of more money make its unit of money, each franc or dollar, cheaper and worth less in purchasing power of goods on the market.

Case Against the Fed, pp. 9–10

… we cannot rely upon Alan Greenspan, or any Federal Reserve Chairman, to wage the good fight against the chronic inflation that has wrecked our savings, distorted our currency, levied hidden redistribution of income and wealth, and brought us devastating booms and busts. Despite the Establishment propaganda, Greenspan, the Fed, and the private commercial bankers are not the “inflation hawks” they like to label themselves. The Fed and the banks are not part of the solution to inflation; they are instead part of the problem. In fact, they are the problem. The American economy has suffered from chronic inflation, and from destructive booms and busts, because that inflation has been invariably generated by the Fed itself. That role, in fact, is the very purpose of its existence: to cartelize the private commercial banks, and to help them inflate money and credit together, pumping in reserves to the banks, and bailing them out if they get into trouble.

Case Against the Fed, p. 144

There is only one way to eliminate chronic inflation, as well as the booms and busts brought by that system of inflationary credit: and that is to eliminate the counterfeiting that constitutes and creates that inflation. And the only way to do that is to abolish legalized counterfeiting: that is, to abolish the Federal Reserve System, and return to the gold standard …

Case Against the Fed, p. 146

The natural tendency of the state is inflation.

Case for a 100 Percent Gold Dollar, p. 38

Government is just as much, if not more, inclined toward monetary and credit inflation as any private central bank. Government can always use inflation to finance the deficits it desires and to subsidize credit to its political allies.

Classical Economics, p. 234

Any scheme for inflating the money supply, whether private or public, can only redistribute income and wealth, cripple or destroy the unit of calculation indispensable to a modern economy, weaken incentives to save, and generally cripple and eventually destroy the economic system. The eventual end is hyperinflation and economic disaster.

Economic Controversies, p. 209

… the government’s intervention into the monetary system is invariably inflationary …

Economic Controversies, p. 235

… money creation functions as a hidden and insidious form of taxation and expropriation of the property and resources of producers.

Economic Controversies, p. 439

… monetary inflation is a method by which the government, its controlled banking system, and favored political groups are able to partially expropriate the wealth of other groups in society.

Economic Controversies, p. 700

The ultimate result of a policy of persistent inflation is runaway inflation and the total collapse of the currency.

Economic Controversies, p. 700

… “inflation”—the increase of paper money or bank liabilities—is a hidden, and therefore particularly insidious, form of taxation. Being hidden, an inflation of money is not likely to arouse the opposition that may be stirred by overt taxation.

Economic Controversies, p. 713

… inflation is the health of the State …

Economic Controversies, p. 717

… an increase in the money supply can only dilute the effectiveness of each existing money unit, and therefore must be “inflationary” in the sense of raising prices beyond what they would have been otherwise.

Economic Controversies, p. 880

… the State is inherently inflationary …

Economic Controversies, p. 909

… the state has always been attracted by the idea of creating its own money in addition to plundering directly the wealth of its subjects.

Economic Thought Before Adam Smith, p. 227

… all prices are determined inversely by the supply of the good and directly by the demand for it. But the supplies of goods are, in general, going up year after year in our still growing economy. So that, from the point of view of the supply side of the equation, most prices should be falling, and we should right now be experiencing a nineteenth-century-style steady fall in prices (“deflation”). If chronic inflation were due to the supply side—to activities by producers such as business firms or unions—then the supply of goods overall would necessarily be falling, thereby raising prices. But since the supply of goods is manifestly increasing, the source of inflation must be the demand side—and the dominant factor on the demand side, as we have indicated, is the total supply of money.

For a New Liberty, p. 219

… price inflation is always caused by an increase in the money supply. In particular, it is caused by bank credit expansion propelled by the central government. Price rises are not caused by particularly wicked groups in the market: by unions, businessmen, Jews, speculators, foreigners, or whatever, as governments have throughout history charged in order to take the blame and attention off governmental shoulders.

Left and Right, p. 229

What happens is that the federal government pumps new money into the economy through Federal Reserve expansion, and then, when the people begin to spend their new money and prices begin to rise, the government proceeds to denounce the public for “spending too much” and levies higher income taxes to “sop up their excess purchasing power”—thus levying both a swindle and a double burden upon the long-suffering public. Spending and government fiscal policy, furthermore, are irrelevant to price inflation, which is determined by the supply and demand of money.… To advocate higher taxes in order to check higher prices is like advocating a person’s murder in order to cure him of disease.

Libertarian Forum v. 1, p. 33

… prices depend not only on the quantity of money but also on the subjective demand to hold money on the part of the populace. As an inflationary boom proceeds and prices continually rise, expectations of future increases become built-in to the psychology of the public. Hence, their demand to hold money begins to fall, as people decide to make their purchases now rather than later when they know that prices will be higher. The mere cessation of monetary inflation cannot, all at once, reverse these inflationary expectations. Hence, prices will keep rising until the determination of the government not to inflate the money supply further becomes credible among the public.

Libertarian Forum v. 1, p. 122

… we cannot account for the continuing inflation from the production side. Where then is the culprit? It is the money side. …

Who, then, is responsible for the continual and growing increases in the supply of money? It is not big business or little business or labor unions or consumer “greed” or international speculators or any of the other economic forces that government has focused on to pin the blame for inflation. The culprit is none other than the federal government itself. It is the federal government and no other organization that has absolute and effective control of the supply of money, and regulates it to its own content. It is the federal government that has been merrily increasing the supply of money, to “stimulate” the economy, to finance its own now enormous budget deficits, to help out favored borrowers, to lower interest rates, or for any other reason.

… First it pumps more money into the economy, and continues to do so. Then, as the new money inevitably spreads throughout the society, and as prices and wages and rents inevitably increase in response, the government itself becomes increasingly possessed with righteous indignation. It issues edicts, bellows about social responsibility, and denounces various groups in turn for supposedly causing the price inflation. Business is denounced for raising prices, labor unions for asking and obtaining wage increases, landlords for raising rents, and sometimes consumers for spending too much. But never, never does the government bother to point to its own responsibility for the whole problem. Instead, it continues to pour more money into the system, and then to wax indignant when prices and wages rise in inevitable response. The White Knight of government, with its myriad of experts and advisers, marching out to man the ramparts of the “fight against inflation,” turns out to be the very culprit who is the source and origin of the whole problem.

Libertarian Forum v. 1, p. 230

… it is the hidden force of the money supply that is at work in determining inflation.

Libertarian Forum v. 1, p. 235

Unfortunately, the public cannot be expected to understand the arcane processes by which the Fed and other central banks keep increasing the money supply and thereby bring about continuing and accelerating inflation. …

Unfortunately, the public is still ignorant of the cause of inflation: the expansion of the money supply by the Fed and the other central banks.

Libertarian Forum v. 1, p. 485

… to advocate high taxes in order to stop inflation is like advocating the guillotine as a cure for cancer. Regardless of how bad a high price is, say, for a loaf of bread, it is still better than a tax, for at least one can eat the bread, whereas a tax provides no service to the consumer whatsoever. …

… the government and its central bank’s continuing expansion of the money supply—its legalized counterfeiting, to be blunt about it—is the only cause of inflation. Higher taxes, even in balancing the budget, will only redistribute money and income from private to governmental hands, and will not solve the cancerous problem of governmental money growth.

Libertarian Forum v. 1, pp. 509–10

An increase in one price does not “cause inflation.” On the contrary, the paying of higher prices for one product would ordinarily leave consumers with only one option: to cut their demand for other products, and thereby to lower other prices. The rise of prices in general cannot be caused by occurrences in one industry; they can only result from increases in consumer demand, which in turn can only come about from governmental increases in the supply of money …

Libertarian Forum v. 1, p. 520

… government, as legalized monopoly counterfeiter, is inherently inflationary …

Libertarian Forum v. 2, p. 1012

… monetary inflation is a hidden form of taxation or redistribution of wealth, to the government and its favored groups and from the rest of the population.

Ludwig von Mises: Scholar, Creator, Hero, p. 11

… inflation is chronic because of the systematic expansion of the money supply.

Making Economic Sense, p. 12

Price inflation is the consequence of the monetary inflation pumped in by the Federal Reserve …

Making Economic Sense, p. 36

In truth, price inflation is not a disease to be combatted by government; it is only necessary for the government to cease inflating the money supply.

Making Economic Sense, p. 252

Inflation, credit expansion, business cycles, heavy government debt, and high taxes are not, as Establishment historians claim, inevitable attributes of capitalism or of “modernization.” On the contrary, these are profoundly anti-capitalist and parasitic excrescences grafted onto the system by the interventionist State …

Making Economic Sense, p. 293

After the money supply is increased, prices do not rise automatically; the resulting inflation depends on human choices and the public’s decisions to hold or not to hold money.

Making Economic Sense, p. 334

… only when the power to create money, that is, to counterfeit, is taken totally out of the hands of government will the curse of inflation truly disappear forever.

Making Economic Sense, p. 338

… inflation, creating new money is, anyway, a form of taxation.

Man, Economy, and State with Power and Market, p. 911

The process of issuing pseudo warehouse receipts or, more exactly, the process of issuing money beyond any increase in the stock of specie, may be called inflation.… Clearly, inflation is the primary event and the primary purpose of monetary intervention.… A priori, almost all intervention will be inflationary.

Man, Economy, and State with Power and Market, p. 990

Inflation is any increase in the supply of money not matched by an increase in the gold or silver stock available …

Man, Economy, and State with Power and Market, p. 991

… inflation reduces saving and investment, thus lowering society’s standard of living.

Man, Economy, and State with Power and Market, p. 993

… inflation tends at once to repress saving-investment and to cause consumption of capital.

Man, Economy, and State with Power and Market, p. 994

Most people believe that government officials must constantly pace the ramparts, armed with a huge variety of “control” programs designed to combat the inflation enemy. Yet all that is really necessary is that the government and the banks (nowadays controlled almost completely by the government) cease inflating.

Man, Economy, and State with Power and Market, p. 1022

… praxeologically, there is no difference between the nature and effects of taxation and inflation on the one hand, and of robberies and counterfeiting on the other. Both intervene coercively in the market, to benefit one set of people at the expense of another set.

Man, Economy, and State with Power and Market, pp. 1149–50

Only coercive intervention, not private spending, can bring about inflation.

Man, Economy, and State with Power and Market, p. 1299

Government inflation not only must injure half the population for the benefit of the other half, but may also lead to a business-cycle depression or collapse of the currency.

Man, Economy, and State with Power and Market, p. 1364

Debasement, then, is the arbitrary redefining and lightening of the currency so as to add to the coffers of the State.

Mystery of Banking, p. 11

… a continuing, sustained inflation—that is, a persistent rise in overall prices—can either be the result of a persistent, continuing fall in the supply of most or all goods and services, or of a continuing rise in the supply of money. Since we know that in today’s world the supply of most goods and services rises rather than falls each year, and since we know, also, that the money supply keeps rising substantially every year, then it should be crystal clear that increases in the supply of money, not any sort of problems from the supply side, are the fundamental cause of our chronic and accelerating problem of inflation.

Mystery of Banking, p. 28

… the essence of inflation is the process by which a large and hidden tax is imposed on much of society for the benefit of government and the early receivers of the new money. Inflationary increases of the money supply are pernicious forms of tax because they are covert, and few people are able to understand why prices are rising. Direct, overt taxation raises hackles and can cause revolution; inflationary increases of the money supply can fool the public—its victims—for centuries.

Mystery of Banking, p. 53

… price levels are determined by the supply and the demand for money … expansion of the money supply—a function solely of government—is the prime active force in inflation.

Mystery of Banking, p. 74

… the cause of our chronic inflation is continuing increases in the supply of money, which eventually generate inflationary expectations that aggravate and accelerate the inflation. Eventually, if unchecked, the inflation runs away into a crack-up boom and destruction of the currency.

Mystery of Banking, p. 75

… the chronic and accelerating inflation of our time has been caused by a fundamental change in the monetary system. From a money, centuries ago, based solidly on gold as the currency, and where banks were required to redeem their notes and deposits immediately in specie, we now have a world of fiat paper moneys cut off from gold and issued by government-privileged Central Banks. The Central Banks enjoy a monopoly on the printing of paper money, and through this money they control and encourage an inflationary fractional reserve banking system which pyramids deposits on top of a total of reserves determined by the Central Banks. Government fiat paper has replaced commodity money, and central banking has taken the place of free banking. Hence our chronic, permanent inflation problem, a problem which, if unchecked, is bound to accelerate eventually into the fearful destruction of the currency known as runaway inflation.

Mystery of Banking, p. 176

A price, therefore, is a free act of voluntary exchange between two individuals, both of whom benefit by the exchange (else the exchange would not be made!). A tax is a compulsory act of expropriation, with no benefit accruing to the individual (unless he happens to be on the receiving end of property expropriated by the State from someone else).

In the light of this distinction, advocating high taxes to prevent high prices is similar to a highway robber assuring the victim that his robbery is checking inflation.

Strictly Confidential, p. 226

Inflation may be defined as any increase in the economy’s supply of money not consisting of an increase in the stock of the money metal. Fractional reserve banks, therefore, are inherently inflationary institutions.

What Has Government Done to Our Money?, p. 41

Inflation (an increase in money substitutes not covered by an increase in the metal stock) is never socially useful, but merely benefits one set of people at the expense of another. Inflation, being a fraudulent invasion of property, could not take place on the free market.

What Has Government Done to Our Money?, p. 48

… governments are inherently inflationary … inflation is a powerful and subtle means for government acquisition of the public’s resources, a painless and all the more dangerous form of taxation.

What Has Government Done to Our Money?, p. 50

Inflation, therefore, lowers the general standard of living in the very course of creating a tinsel atmosphere of “prosperity.”

Fortunately, inflation cannot go on forever. For eventually people wake up to this form of taxation …

What Has Government Done to Our Money?, p. 54

What governments want, after all, is not simply inflation, but inflation completely controlled and directed by themselves.

What Has Government Done to Our Money?, p. 68

Hyperinflation occurs when the public realizes that the government is bent on inflation, and decides to evade the inflationary tax on its resources by spending money as fast as possible while it still retains some value.

What Has Government Done to Our Money?, pp. 81–82

… governments are inherently inflationary, since inflation is a tempting means of acquiring revenue for the State and its favored groups.

What Has Government Done to Our Money?, p. 86

INTELLECTUAL PROPERTY

Violation of (common law) copyright is an equivalent violation of contract and theft of property.… our theory of property rights includes the inviolability of contractual copyright.

Ethics of Liberty, p. 123

… violation of copyright should indeed be illegal.

Libertarian Forum v. 2, p. 1123

The patent is incompatible with the free market precisely to the extent that it goes beyond the copyright.

Man, Economy, and State with Power and Market, p. 747

… copyright is a logical attribute of property right on the free market, while patent is a monopoly invasion of that right.

Man, Economy, and State with Power and Market, p. 748

If it is desired to maintain a free market, it is particularly important to allow copyrights, but not patents, for mechanical inventions.

… On the free market, there would therefore be no such thing as patents. There would, however, be copyright for any inventor or creator who made use of it, and this copyright would be perpetual, not limited to a certain number of years.

Man, Economy, and State with Power and Market, p. 749

… patents distort the type of research expenditure being conducted.… competitors can often be indefinitely discouraged from further research expenditures in the general area covered by the patent. Moreover, the patentee is himself discouraged from engaging in further research in this field, for the privilege permits him to rest on his laurels for the entire period of the patent, with the assurance that no competitor can trespass on his domain. The competitive spur for further research is eliminated. Research expenditures are therefore overstimulated in the early stages before anyone has a patent, and they are unduly restricted in the period after the patent is received. In addition, some inventions are considered patentable, while others are not. The patent system then has the further effect of artificially stimulating research expenditures in the patentable areas, while artificially restricting research in the nonpatentable areas.

Man, Economy, and State with Power and Market, p. 752

A patent is a grant of monopoly privilege by the government to first discoverers of certain types of inventions. Some defenders of patents assert that they are not monopoly privileges but simply property rights in inventions, or even in “ideas.” But in free-market, or libertarian, law everyone’s right to property is defended without a patent.

Man, Economy, and State with Power and Market, p. 1133

Patents, like any monopoly grant, confer a privilege on one and restrict the entry of others, thereby distorting the freely competitive pattern of industry.

Man, Economy, and State with Power and Market, p. 1137

INTELLECTUALS

… no state—no minority—can continue long in power unless supported, even if passively, by the majority. Why then does the majority continue to accept or support the state when it is clearly acquiescing in its own subjection? Why does the majority continue to obey the minority?

Here we arrive at the age-old role of the intellectuals, the opinion-molding groups in society. The ruling class—be it warlords, nobles, bureaucrats, feudal landlords, monopoly merchants, or a coalition of several of these groups—must employ intellectuals to convince the majority of the public that its rule is beneficent, inevitable, necessary, and even divine. The leading role of the intellectual throughout history is that of the court intellectual, who, in return for a share of, a junior partnership in, the power and pelf offered by the rest of the ruling class, spins the apologias for state rule with which to convince a misguided public. This is the age-old alliance of church and state, of throne and altar, with the church in modern times being largely replaced by secular intellectuals and “scientific” technocrats.

Conceived in Liberty v. 3, p. 352; p. 1116

Only intellectuals, full-time (or largely full-time) professionals in ideas, have the time, the ability, and the inclination to formulate an opposition ideology and then to spread the word to the people. In contrast to the statist court intellectual, whose role is a junior partner in rationalizing the economic interests of the ruling class, the radical or opposition intellectual’s role is the centrally guiding one of formulating the opposition or revolutionary ideology and then of spreading the ideology to the masses, thereby welding them into a revolutionary movement.

Conceived in Liberty v. 3, p. 353; p. 1117

It is an occupational disease of intellectuals to simplify the reality of people, of other people that is, in order to try to understand them. And so intellectuals like to pigeonhole their subjects—other people—into neat, orderly, and simple categories, and to classify and then deal with them in neat and orderly ways. …

… Intellectuals, in short, are all too often terrible simplifiers, willing and eager to impose massive and painful losses upon other people for the sake of symmetry, uniformity, flatness, or some other simple and abstract ideal.

Economic Controversies, p. 549

To make their rule permanent, the State rulers need to induce their subject masses to acquiesce in at least the legitimacy of their rule. For this purpose the State has always taken a corps of intellectuals to spin apologia for the wisdom and the necessity of the existing system.

Economic Controversies, p. 656

… state rule cannot endure for long without a corps of intellectuals to spin the arguments and the rationale to gain the support and the sense of legitimacy among the public …

Economic Controversies, p. 665

… the intellectual’s livelihood in the free market is never too secure; for the intellectual must depend on the values and choices of the masses of his fellow men, and it is precisely characteristic of the masses that they are generally uninterested in intellectual matters. The State, on the other hand, is willing to offer the intellectuals a secure and permanent berth in the State apparatus; and thus a secure income and the panoply of prestige. For the intellectuals will be handsomely rewarded for the important function they perform for the State rulers, of which group they now become a part.

Egalitarianism as a Revolt Against Nature, p. 63

The greatest danger to the State is independent intellectual criticism …

Egalitarianism as a Revolt Against Nature, p. 67

… it is precisely the function of the State’s ideological minions and allies to explain to the public that the Emperor does indeed have a fine set of clothes. In brief, the ideologists must explain that, while theft by one or more persons or groups is bad and criminal, that when the State engages in such acts, it is not theft but the legitimate and even sanctified act called “taxation.” The ideologists must explain that murder by one or more persons or groups is bad and must be punished, but that when the State kills it is not murder but an exalted act known as “war” or “repression of internal subversion.” They must explain that while kidnapping or slavery is bad and must be outlawed when done by private individuals or groups, that when the State commits such acts it is not kidnapping or slavery but “conscription”—an act necessary to the public weal and even to the requirements of morality itself. The function of the statist ideologists is to weave the false set of Emperor’s clothes, to convince the public of a massive double standard: that when the State commits the gravest of high crimes it is really not doing so, but doing something else that is necessary, proper, vital, and even—in former ages—by divine command. The age-old success of the ideologists of the State is perhaps the most gigantic hoax in the history of mankind.

Ethics of Liberty, p. 168

… intellectuals, whose services are often not very intensively desired by the mass of consumers, can find a more secure “market” for their abilities in the arms of the State. The State can provide them with a power, status, and wealth which they often cannot obtain in voluntary exchange. For centuries, many (though, of course, not all) intellectuals have sought the goal of Power …

Ethics of Liberty, p. 170

In all societies, public opinion is determined by the intellectual classes, the opinion molders of society. For most people neither originate nor disseminate ideas and concepts; on the contrary, they tend to adopt those ideas promulgated by the professional intellectual classes, the professional dealers in ideas. Now, throughout history … despots and ruling elites of States have had far more need of the services of intellectuals than have peaceful citizens in a free society. For States have always needed opinion-molding intellectuals to con the public into believing that its rule is wise, good, and inevitable; into believing that the “emperor has clothes.”

For a New Liberty, pp. 13–14

… since the early origins of the State, its rulers have always turned, as a necessary bolster to their rule, to an alliance with society’s class of intellectuals. The masses do not create their own abstract ideas, or indeed think through these ideas independently; they follow passively the ideas adopted and promulgated by the body of intellectuals, who become the effective “opinion molders” in society. And since it is precisely a molding of opinion on behalf of the rulers that the State almost desperately needs, this forms a firm basis for the age-old alliance of the intellectuals and the ruling classes of the State. The alliance is based on a quid pro quo: on the one hand, the intellectuals spread among the masses the idea that the State and its rulers are wise, good, sometimes divine, and at the very least inevitable and better than any conceivable alternatives. In return for this panoply of ideology, the State incorporates the intellectuals as part of the ruling elite, granting them power, status, prestige, and material security. Furthermore, intellectuals are needed to staff the bureaucracy and to “plan” the economy and society.

Before the modern era, particularly potent among the intellectual handmaidens of the State was the priestly caste, cementing the powerful and terrible alliance of warrior chief and medicine man, of Throne and Altar. The State “established” the Church and conferred upon it power, prestige, and wealth extracted from its subjects. In return, the Church anointed the State with divine sanction and inculcated this sanction into the populace. In the modern era, when theocratic arguments have lost much of their lustre among the public, the intellectuals have posed as the scientific cadre of “experts” and have been busy informing the hapless public that political affairs, foreign and domestic, are much too complex for the average person to bother his head about. Only the State and its corps of intellectual experts, planners, scientists, economists, and “national security managers” can possibly hope to deal with these problems.

For a New Liberty, p. 67

The ruling elite, whether it be the monarchs of yore or the Communist parties of today; are in desperate need of intellectual elites to weave apologias for state power. The state rules by divine edict; the state insures the common good or the general welfare; the state protects us from the bad guys over the mountain; the state guarantees full employment; the state activates the multiplier effect; the state insures social justice, and on and on. The apologias differ over the centuries; the effect is always the same. …

… Intellectuals are the sort of people who believe that, in the free market, they are getting paid far less than their wisdom requires. Now the state is willing to pay them salaries, both for apologizing for state power, and in the modern state, for staffing the myriad jobs in the welfare, regulatory state apparatus.

In past centuries, the churches have constituted the exclusive opinion molding classes in the society. Hence the importance to the state and its rulers of an established church, and the importance to libertarians of the concept of separating church and state, which really means not allowing the state to confer upon one group a monopoly of the opinion-molding function. …

… the ruling classes, have gathered unto themselves the intellectual and media elites, who are able to bamboozle the masses into consenting to their rule, to indoctrinate them …

Irrepressible Rothbard, p. 9

The ruling class in the State has always needed intellectuals to apologize for their rule and to sucker the masses into subservience, i.e., into paying the taxes and going along with State rule. In the old days, in most societies, a form of priestcraft or State Church constituted the opinion-molders who apologized for that rule. Now, in a more secular age, we have technocrats, “social scientists,” and media intellectuals, who apologize for the State system and staff in the ranks of its bureaucracy.

Irrepressible Rothbard, p. 39

The rhetoric of idealism provides the sophisticated cover for the plunder underneath; and it also spurs the intellectuals themselves to greater heights of despotism.

Left and Right, p. 94

… intellectuals are needed to service the State …

Left and Right, p. 143

… every intellectual, as he grows up, acquires a sense of the superiority of himself and his confreres to the ordinary folk around him. Sometimes this sense of superiority may be justified; often it is not. But for many intellectuals this leads to a life-long attempt to demonstrate, to flaunt their superiority to the average man. Instead of peacefully and cheerfully going about his own affairs and his own productive work without worrying about his social ranking in relation to others, the intellectual begins to express his cosmic contempt by mocking the insights and values of those around him.

Libertarian Forum v. 1, p. 208

The ruling class—be they warlords, nobles, feudal landlords, or monopoly merchants, or a coalition of several of these groups—must employ intellectuals to convince the majority of the public that their rule is beneficent, inevitable, necessary, and even divine. The dominant role of the intellectual through history is that of the Court Intellectual, who in return for a share, a junior partnership, in the power and pelf offered by the rest of the ruling class, spins the apologias for State rule with which to convince a deluded public. This is the age-old alliance of Church and State, of Throne and Altar, with the Church in modern times being largely replaced by “scientific” technocrats.

Libertarian Forum v. 1, p. 521

It is true that, in the long run, we will never be free until the intellectuals—the natural molders of public opinions—have been converted to the side of freedom. In the short run, however, the only route to liberty is by an appeal to the masses over the heads of the State and its intellectual bodyguard.

Strictly Confidential, p. 35

INTEREST RATE

Marginal productivity explains the height of a factor’s rental price, but another principle is needed to explain why and on what basis these rents are discounted to get the present capitalized value of the factor … That principle is “time preference”: the social rate at which people prefer present goods to future goods in the vast interconnected time market (present/future goods market) that pervades the entire economy.

Capital, Interest, and Rent, p. 4

… the interest rate on the market … is used to convert (or “discount”) all future values into present values whether the future good happens to be a bond (a claim to future money) or more specifically the expected future rentals from land or capital.

Capital, Interest, and Rent, p. 4

… time valuation is prerequisite to the determination of the market rate of interest. The market rate of interest on loans is … a reflection of a general rate of time preference in the economy, a capitalization process that discounts, in the present prices of durable goods and factors of production, the future uses of these goods.

Capital, Interest, and Rent, pp. 14–15

… as the economy advances and more present goods are produced, the preference for present goods is lowered, and the interest rate therefore may be expected to fall.

Capital, Interest, and Rent, p. 16

… interest on the loan market is determined by the demand for capital (to which it is directly proportional) and the supply of capital (inversely proportional).

Classical Economics, p. 25

The rate of interest is the price of “time” …

Economic Controversies, p. 593

… the best interest rate is the free market, or the “natural” interest rate, set by the workings of free man under natural law, i.e., the rate determined by the supply of and demand for money loans at any given time.

Economic Thought Before Adam Smith, p. 320

… the interest rate—the price of loans—will be determined by the supply and demand for credit.

Since interest is a market price, government control will have consequences as injurious as the control of any price.

Economic Thought Before Adam Smith, p. 325

The lender sells the use of his money now, and the borrower buys that use, and the “price” of those loans, i.e., the loan rate of interest, will be determined, as in the case of any commodity, by the variations in supply and demand on the market. Increased demand for loans (“many borrowers”) will raise interest rates; increased supply of loans (“many lenders”) will lower them.

Economic Thought Before Adam Smith, p. 398

… the essence of any loan is that a “present good” (money which can be used at present) is being exchanged for a “future good” (an IOU which can be used at some point in the future). Since people always prefer having money right now to the present prospect of getting the same amount of money at some point in the future, present goods always command a premium over future goods in the market. That premium, or “agio,” is the interest rate, and its height will vary according to the degree to which people prefer the present to the future, i.e., the degree of their time preferences.

For a New Liberty, p. 233

… interest rates are strongly affected by people’s expectations of future price inflation; the higher the expectation, the higher the interest rate.

Making Economic Sense, p. 320

Not only must the interest rate be uniform for each good; it must be uniform for every stage of every good. …

The interest rate must be equal for each stage of the production process. For suppose that the interest rate were higher in the higher stages than in the lower stages. Then capitalists would abandon producing in the lower stage, and shift to the higher stage, where the interest return is greater.

Man, Economy, and State with Power and Market, p. 370

… the interest rate is equal to the rate of price spread in the various stages.

Man, Economy, and State with Power and Market, p. 371

In the real world of uncertainty, the tendency of entrepreneurial actions is always in the direction of establishing a uniform rate of interest throughout all time markets in the economy.

Man, Economy, and State with Power and Market, p. 372

… the rate of interest plays a crucial role in the system of production in the complex, monetary economy.

Man, Economy, and State with Power and Market, p. 375

The level of the pure rate of interest is determined by the market for the exchange of present goods against future goods …

Man, Economy, and State with Power and Market, p. 375

This discount on future goods as compared with present goods (or, conversely, the premium commanded by present goods over future goods) is the rate of interest.

Man, Economy, and State with Power and Market, p. 376

This pure rate of interest, then, is determined solely by the time preferences of the individuals in the society, and by no other factor.

… time preference is the only determining factor.

Man, Economy, and State with Power and Market, p. 389

Perhaps more fallacies have been committed in discussions concerning the interest rate than in the treatment of any other aspect of economics.

Man, Economy, and State with Power and Market, p. 389

… the interest rate can never disappear.

Man, Economy, and State with Power and Market, p. 404

… the interest rate of the time market permeates all particular aspects of the present-future market …

Man, Economy, and State with Power and Market, p. 405

… the time-preference schedules of all individuals in the society determine the interest rate …

Man, Economy, and State with Power and Market, p. 410

The rate of interest finally set on the market is determined by the aggregate net supply and net demand schedules throughout the entire time market …

Man, Economy, and State with Power and Market, p. 417

The size of the price spread, i.e., the size of the interest rate, is determined … by the time-preference schedules of all the individuals in the economy.

Man, Economy, and State with Power and Market, p. 424

The interest rate, then, is determined by the various time-preference schedules, and the final rate is set by the saving schedules, on the one hand, and by the demand-for-present-goods schedules, on the other.

Man, Economy, and State with Power and Market, p. 437

The interest rate, then, always tends to be uniform throughout its time structure.

Man, Economy, and State with Power and Market, p. 448

… the rate of interest (the pure rate of interest in the ERE) could never be zero. It is determined by individual time preferences, which are all positive.

Man, Economy, and State with Power and Market, p. 450

The whole basis for pure interest, requiring interest payments, is time preference …

Man, Economy, and State with Power and Market, p. 451

The existence of time preference acts as a brake on the use of the more productive but longer processes. Any state of equilibrium will be based on the time-preference, or pure interest rate, and this rate will determine the amount of savings and capital invested. It determines capital by imposing a limit on the length of the production processes and therefore on the maximum amount produced. A lowering of time preference, therefore, and a consequent lowering of the pure rate of interest signify that people are now more willing to wait for any given amount of future output, i.e., to invest more proportionately and in longer processes than heretofore. A rise in time preference and in the pure interest rate means that people are less willing to wait and will spend proportionately more on consumers’ goods and less on the longer production processes, so that investments in the longest processes will have to be abandoned.

Man, Economy, and State with Power and Market, p. 539

A businessman’s new investment in a longer and more physically productive process will therefore be made from a sheaf of processes previously known but unusable because of the time preference limitation. A lowering of time preferences and of the pure interest rate will signify an expansion of saved capital at the disposal of investors and therefore an expansion of the longer processes, the time limitation on investment having been weakened.

Man, Economy, and State with Power and Market, p. 543

… a feature of the progressing economy must necessarily be a fall in the pure rate of interest.… in order for more capital to be invested, there must be a fall in the pure rate of interest, reflecting general declines in time preferences. If the pure rate remains the same, this is an indication that there will be no new investment or disinvestment, that time preferences are generally stable, and that the economy is stationary. A fall in the pure rate of interest is a corollary of a drop in time preferences and a rise in gross investment. A rise in the pure rate of interest is a corollary of a rise in time preferences and net disinvestment. Hence, for the economy to keep advancing, time preferences and the pure rate of interest must continue to fall.

Man, Economy, and State with Power and Market, p. 549

… the pure interest rate tends to be uniform.

Man, Economy, and State with Power and Market, p. 575

… the pure interest rate will tend to be uniform throughout the world …

Man, Economy, and State with Power and Market, p. 617

The pure interest rate will be determined by the time-preference schedules of all individuals in the economy. Its chief expression will be not in the loan market, but in the discounts between prices in the various stages of production. Interest on the loan market will be a reflection of this “natural” interest rate.

Man, Economy, and State with Power and Market, p. 625

Interest rates will fall as time-preference rates drop and the proportion of gross investment to consumption increases.

Man, Economy, and State with Power and Market, p. 627

… there is no reason why a change in the demand for money should affect the interest rate one iota. There is no necessity at all for an increase in the demand for money to raise the interest rate, or a decline to lower it—no more than the opposite. In fact, there is no causal connection between the two; one is determined by the valuations for money, and the other by valuations for time preference.

Man, Economy, and State with Power and Market, p. 774

… all the interest-rate components aside from the pure rate—entrepreneurial, purchasing power, and terms of trade—are “dynamic” and the result of uncertainty.

Man, Economy, and State with Power and Market, p. 798

… an increase in saving resulting from a fall in time preferences leads to a fall in the interest rate and another stable equilibrium situation with a longer and narrower production structure.

Man, Economy, and State with Power and Market, p. 995

The interest rate regulates the temporal order of choice of projects in accordance with their urgency. A lower rate of interest on the market is a signal that more projects can be undertaken profitably. Increased saving on the free market leads to a stable equilibrium of production at a lower rate of interest.

Man, Economy, and State with Power and Market, p. 996

… the interest rate … tells businessmen how much savings are available and what length of projects will be profitable. In the free market the interest rate is an indispensable guide, in the time dimension, to the urgency of consumer wants.

Man, Economy, and State with Power and Market, p. 997

INTERNATIONAL MONETARY COOPERATION

Governments, of course, are always anxious to remove all checks on their powers of inducing monetary expansion. One way of removing the external threat is to foster international cooperation, so that all governments and central banks expand their money supply at a uniform rate. The “ideal” condition for unlimited inflation is, of course, a world fiat paper money, issued by a world central bank or other governmental authority. …

Many economists and most other people assume that the State could accomplish this goal. Actually, it could not, for there is an ultimate limit on inflation, a very wide one, to be sure, but a terrible limit that will in the end conquer any inflation. Paradoxically, this is the phenomenon of runaway inflation, or hyperinflation.

Man, Economy, and State with Power and Market, pp. 1018–19

International central bank “cooperation” (or cartelization) then and now means the establishment of formal and informal mechanisms to prevent pressures for redemption and contraction on an inflating nation’s currency.

Progressive Era, p. 489

… just as the expansion of one bank loses gold to the clients of other, nonexpanding banks, so does monetary expansion in one country cause a loss of gold to the citizens of other countries. Countries that expand faster are in danger of gold losses and calls upon their banking system for gold redemption. This was the classic cyclical pattern of the nineteenth century; a country’s Central Bank would generate bank credit expansion; prices would rise; and as the new money spread from domestic to foreign clientele, foreigners would more and more try to redeem the currency in gold. Finally, the Central Bank would have to call a halt and enforce a credit contraction in order to save the monetary standard.

There is one way that foreign redemption can be avoided: inter-Central Bank cooperation. If all Central Banks agree to inflate at about the same rate, then no country would lose gold to any other, and all the world together could inflate almost without limit.

What Has Government Done to Our Money?, p. 76

Clearly, the inflationists’ dream is some sort of world paper money, manipulated by a world government and Central Bank, inflating everywhere at a common rate.

What Has Government Done to Our Money?, p. 85

INTERNATIONAL TRADE

… each country should produce not just what it has an absolute advantage in making, but what it is most best at, or even least worst at, i.e., what it has a comparative advantage in producing.

Classical Economics, p. 95

… no country or region of the earth is going to be left out of the international division of labor under free trade.… even if a country is in such poor shape that it has no absolute advantage in producing anything, it still pays for its trading partners, the people of other countries, to allow it to produce what it is least worst at.

In this way, the citizens of every country benefit from international trade. No country is too poor or inefficient to be left out of international trade, and everyone benefits from countries specializing in what they are most best or least bad at—in other words, in whatever they have a comparative advantage.

Classical Economics, p. 95

… the present international monetary system is an irrational and abortive monstrosity …

Economic Controversies, p. 908

International trade, as well as individual exchange, brings mutual benefits.

Economic Thought Before Adam Smith, p. 60

The price-specie-flow mechanism is the quantity theory extrapolated into the case of many countries. The rise in the supply of money in country A will cause its prices to rise; but then the goods of country A are no longer as competitive compared to other countries. Exports will therefore decline, and imports from other countries with cheaper goods will rise. The balance of trade in country A will therefore become unfavorable, and specie will flow out of A in order to pay for the deficit. But this outflow of specie will eventually cause a sharp contraction of the supply of money in country A, a proportional fall in prices, and an end to, indeed a reversal of, the unfavorable balance. As prices in A fall back to previous levels, specie will flow back in until the balance of trade is in balance, and until the price levels in terms of specie are equal in each country. Thus, on the free market, there is a rapidly self-correcting force at work that equilibrates balances of payments and price levels, and prevents an inflation from going very far in any given country.

Economic Thought Before Adam Smith, p. 426

As credit is expanded and pyramided on top of paper money and gold, the money supply (in the form of bank deposits or, in that historical period, bank notes) expands. The expansion of the money supply raises prices and sets the inflationary boom into motion. As the boom continues, fueled by the pyramiding of bank notes and deposits on top of gold, domestic prices also increase. But this means that domestic prices will be higher, and still higher, than the prices of imported goods, so that imports will increase and exports to foreign lands will decline. A deficit in the balance of payments will emerge and widen, and it will have to be paid for by gold flowing out of the inflating country and into the hard-money countries. But as gold flows out, the expanding money and banking pyramid will become increasingly top-heavy, and the banks will find themselves in increasing danger of going bankrupt. Finally, the government and banks will have to stop their expansion, and, to save themselves, the banks will have to contract their bank loans and checkbook money.

The sudden shift from bank credit expansion to contraction reverses the economic picture and bust quickly follows boom. The banks must pull in their horns, and businesses and economic activity suffer as the pressure mounts for debt repayment and contraction. The fall in the supply of money, in turn, leads to a general fall in prices (“deflation”). The recession or depression phase has arrived. However, as the money supply and prices fall, goods again become more competitive with foreign products and the balance of payments reverses itself, with a surplus replacing the deficit. Gold flows into the country, and, as bank notes and deposits contract on top of an expanding gold base, the condition of the banks becomes much sounder, and recovery gets under way.

For a New Liberty, pp. 230–31

… this international specie-flow mechanism also described a correct, if primitive, model of the business cycle.

History of Money and Banking in the United States, p. 355

… on a truly free market there would be no need for any separate “theory of international trade.” Nations become significant economically only with government intervention, either by way of monetary intervention or barriers to trade.

Man, Economy, and State with Power and Market, p. 907n27

Economists have devoted a great deal of attention to the “theory of international trade”—attention far beyond its analytic importance. For, on the free market, there would be no separate theory of “international trade” at all—and the free market is the locus of the fundamental analytic problems.

Man, Economy, and State with Power and Market, p. 1101

The Ricardian specie flow price mechanism, therefore, is simply a special case of a general phenomenon: When one or more banks expand their credit and demand liabilities, they will lose gold (or, in the case of banks within a country, government paper) to other banks, thereby cutting short the inflationary process and leading to deflation and credit contraction. The Ricardian analysis is simply the polar case where all banks within a country can expand together (if there is only one monopoly bank in the country), and so the redemption constraint on inflation only comes, relatively weakly, from the banks of other countries.

Mystery of Banking, pp. 122–23

… a country or region will often best develop, depending on conditions of resources or the market, by concentrating on one or two items and then exchanging them for other items produced elsewhere.

Strictly Confidential, p. 192

INTERVENTIONISM

Whenever government intervenes in the market, it aggravates rather than settles the problems it has set out to solve. This is a general economic law of government intervention.

America’s Great Depression, p. 229

… everything the government does is counterproductive; the conclusion, of course, is that the government should do nothing at all, that is, should retire quickly from the monetary and economic scene and allow freedom and free markets to work.

America’s Great Depression, p. xxi

… government intervention is not the proper road to achieving proper affluence.

Classical Economics, p. 21

Stimulating consumer demand has long been the particularly favored program of interventionists. Generally, this is done by the government and its central bank inflating the money supply and/or by the government incurring heavy deficits, its spending passing for a surrogate consumption. Indeed, government deficits would seem to be ideal for the overproduction/underconsumptionists. For if the problem is too much production and/or too little consumer spending, then the solution is to stimulate a lot of unproductive consumption, and who is better at that than government, which by its very nature is unproductive and even counter productive?

Classical Economics, p. 27

… all types of government policies will have consequences that most people, at least, will tend to abhor.

Economic Controversies, p. 95

… intervention has a cumulative effect … eventually the economy must move either toward the free market or toward full socialism …

Economic Controversies, p. 98

… an act of intervention generates unintended consequences and difficulties, which then present the government with an alternative: either more intervention to “solve” these problems, or repeal of the whole interventionist structure … the market economy is a finely constructed, interrelated web; and coercive intervention at various points of the structure will create unforeseen troubles elsewhere. The logic of intervention, then, is cumulative; and so a mixed economy is unstable—always tending either toward full-scale socialism or back to a free-market economy.

Economic Controversies, p. 235

… government interventionism and full-scale socialist planning simply do not work, that is, do not achieve the stated goals of the rulers themselves. Hence the necessity for statists to deny the existence of economic law.

Economic Controversies, p. 920

Every government intervention creates new problems in the course of vain attempts to solve the old. The government is then confronted with the choice: pile on new interventions to solve the inexplicable new problems, or repeal the original intervention. Government’s instinct, of course, is to maximize its wealth and power by adding new interventions.

Economic Thought Before Adam Smith, p. 70

… all statist intervention distorts and cripples the market and leads, if not reversed, to socialism …

For a New Liberty, p. 395

… statism, interventionism, and socialism cannot work in the industrial era … statist measures and policies lead inevitably, in accordance with the ineluctable laws of cause and effect, to bad and disastrous consequences that are increasingly seen as disastrous by the general public. The problem for all these dark decades of statism is that these laws take time, decades, to work themselves out fully; to put it one way, it takes time for the consequences of statist looting and repression to wreck the economy and the living standards that relatively free-market capitalism had brought to us in the nineteenth century.

Libertarian Forum v. 1, p. 386

One of Ludwig von Mises’s keenest insights was on the cumulative tendency of government intervention. The government, in its wisdom, perceives a problem (and Lord knows, there are always problems!). The government then intervenes to “solve” that problem. But lo and behold! Instead of solving the initial problem, the intervention creates two or three further problems, which the government feels it must intervene to heal, and so on toward socialism.

Making Economic Sense, p. 74

Government actions, even and perhaps especially Quick Fixes, are apt to get us into a worse mess than we are in already.

Making Economic Sense, p. 436

… government interventionism doesn’t work … it is despotic, counter-productive, and destructive of the interests of the mass of the people …

Making Economic Sense, p. 475

Intervention is the intrusion of aggressive physical force into society; it means the substitution of coercion for voluntary actions. It must be remembered that, praxeologically, it makes no difference what individual or group wields this force; the economic nature and consequences of the action remain the same.

Empirically, the vast bulk of interventions are performed by States, since the State is the only organization in society legally equipped to use violence …

Man, Economy, and State with Power and Market, p. 877

The man being coerced, therefore, always loses in utility as a result of the intervention. …

… Who gains in utility ex ante? Clearly, the intervener; otherwise, he would not have made the intervention.

Man, Economy, and State with Power and Market, p. 879

In contrast to the free market, therefore, all cases of intervention supply one set of men with gains at the expense of another set.

Man, Economy, and State with Power and Market, p. 880

… individuals maximize their utility ex ante on the free market … they cannot do so when there is intervention, for then the intervener gains in utility only at the expense of a demonstrated loss in utility by his subject.

Man, Economy, and State with Power and Market, p. 885

… in every instance, the consequences of intervention will make the intervention look worse in the eyes of many of its original supporters.… Ex post, many of the interveners themselves will feel that they have lost rather than gained in utility.

… With intervention, one group gains directly at the expense of another, and therefore social utility is not maximized or even increased; there is no mechanism for speedy translation of anticipation into fruition, but indeed the opposite … the indirect consequences of intervention will cause many interveners themselves to lose utility ex post.

Man, Economy, and State with Power and Market, p. 891

Entrepreneurs operate on the basis of certain criteria: prices, interest rate, etc., established by the free market. Interventionary tampering with these signals destroys the continual market tendency to adjustment and brings about losses and misallocation of resources in satisfying consumer wants.

Man, Economy, and State with Power and Market, p. 895

… the analysis of intervention applies to whatever agency wields the violence, whether private or governmental.

Man, Economy, and State with Power and Market, p. 898

The free market, unhampered, would not be in danger of suffering inflation, deflation, depression, or unemployment. But the intervention of government creates the tightrope for the economy and is constantly, if sometimes unwittingly, pushing the economy into these pitfalls.

Man, Economy, and State with Power and Market, p. 1024

The coerced individual loses in utility as a result of the intervention, for his action has been changed by its impact. Any intervention, whether it be autistic, binary, or triangular, causes the subjects to lose in utility. In autistic and binary intervention, each individual loses in utility; in triangular intervention, at least one, and sometimes both, of the pair of would-be exchangers lose in utility.

Man, Economy, and State with Power and Market, p. 1061

… the picture of the free market is necessarily one of harmony and mutual benefit; the picture of State intervention is one of caste conflict, coercion, and exploitation.

Man, Economy, and State with Power and Market, p. 1065

… individuals maximize their utility ex ante on the free market … the direct result of an invasion is that the invader’s utility gains at the expense of a loss in utility by his victim.

Man, Economy, and State with Power and Market, p. 1069

… in every instance of government intervention, the indirect consequences will be such as to make the intervention appear worse in the eyes of many of its original supporters.

Man, Economy, and State with Power and Market, p. 1073

… every intermixture of government ownership or interference in the market distorts the allocation of resources and introduces islands of calculational chaos into the economy.

Man, Economy, and State with Power and Market, p. 1364

… every coercive intervention in human affairs brings about further problems that call for the choice; repeal the initial intervention or add another one. It is this feature that makes any “mixed economy” inherently unstable, tending always toward one or the other polar opposite—pure freedom or total statism.

Man, Economy, and State with Power and Market, p. 1366

… the free-market economy forms a kind of natural order, so that any interventionary disruption creates not only disorder but the necessity for repeal or for cumulative disorder in attempting to combat it.

Man, Economy, and State with Power and Market, p. 1368

… one intervention leads inexorably to another intervention …

Rothbard vs. the Philosophers, p. 80

… economic science shows that governments cannot accomplish their objectives …

Rothbard vs. the Philosophers, p. 110

… government intervention can only disrupt an economy and defeat its own ends …

Science, Technology, and Government, p. 17

Any government subsidization of an enterprise, whether through insurance grants or any other method, weakens the private enterprise system and its basic principle that every firm must stand on its own voluntarily-raised resources, and distorts the efficient allocation of resources to serve consumer wants.

Science, Technology, and Government, p. 94

As always, government intervention to cure one problem raises a host of new, unexpected problems.

What Has Government Done to Our Money?, p. 82

INVESTMENT

Savings and investment are indissolubly linked. It is impossible to encourage one and discourage the other. Aside from bank credit, investments can come from no other source than savings …

America’s Great Depression, p. 38

… saving and investment are always equivalent. The two terms may be used almost interchangeably.

America’s Great Depression, p. 39

Investment always takes place by a lengthening of the processes of production, since the shorter productive processes are the first to be developed. The longer processes remaining untapped are more productive, but they are not exploited because of the limitations of time-preference.

America’s Great Depression, p. 71

… investing capital is advancing money payments to factors of production, an advance that is repaid later by the consumer.

Classical Economics, p. 23

… the transfer of labor and land to the formation of capital goods is called investment.

Man, Economy, and State with Power and Market, p. 48

… at any given point in time, all men will have invested in all the shorter periods of production to satisfy the most urgently felt wants that their knowledge of recipes allows; any further formation of capital will go into longer processes of production. Other things being equal (i.e., the relative urgency of wants to be satisfied, and the actor’s knowledge of recipes), any further investment will be in a longer process of production than is now under way.

Man, Economy, and State with Power and Market, p. 51

At any point in time, an actor has a range of investment decisions open to him of varying potential utilities for the products that will be provided. He also has a certain rate of time preference by which he will discount these expected future utilities to their present value. How much he will save and invest in any period will be determined by comparing these present values with the value of the consumers’ goods forgone in making the investment decision. As he makes one investment decision after another, he will choose to allocate his resources first to investments of highest present value, then to those of next highest, etc. As he continues investing (at any given time), the present value of the future utilities will decline. On the other hand, since he is giving up a larger and larger supply of consumers’ goods in the present, the utility of the consumers’ goods that he forgoes (leisure and others) will increase—on the basis of the law of marginal utility. He will cease saving and investing at the point at which the value of goods forgone exceeds the present value of the future utilities to be derived. This will determine an actor’s rate of saving and investing at any time.

Man, Economy, and State with Power and Market, pp. 63–64

In order to obtain the money for investment, then, an individual must save money by restricting his possible consumption expenditures. This saved money first goes into his cash balance and then is invested in the purchase of factors in the anticipation of a later sale of the produced good. It is obvious that investment can come only from funds that are saved by individuals from their possible consumption spending. The producers restrict their consumption expenditures, save their money, and “go into business” by investing their funds in factors that will yield them products in the future.

Man, Economy, and State with Power and Market, p. 209

Investment expenditures may be defined as the sum of the money expenditures made in investment in factors of production.

Man, Economy, and State with Power and Market, p. 210

Investment expenditures are always made in anticipation of future sale.

Man, Economy, and State with Power and Market, p. 210

Since the investment is always in anticipation of later sale, the investors are also engaged in entrepreneurship, in enterprise.

Man, Economy, and State with Power and Market, p. 210

… an investor will attempt to acquire the greatest possible net income from his investment …

Man, Economy, and State with Power and Market, p. 211

… decisions to invest are due to the demand for an expected money return in the future.

Man, Economy, and State with Power and Market, p. 257

… investment continues until the marginal cost of such investment, in terms of forgone consumption or cash balance, is greater than the present value of the expected return.

Man, Economy, and State with Power and Market, p. 267

Investment is the amount of money spent on future-good factors and necessarily equals savings.

Man, Economy, and State with Power and Market, p. 398

The important consideration, therefore, is time preferences and the resultant proportion between expenditure on consumers’ and producers’ goods (investment). The lower the proportion of the former, the heavier will be the investment in capital structure, and, after a while, the more abundant the supply of consumers’ goods and the more productive the economy.

Man, Economy, and State with Power and Market, p. 404

… the ultimate goal of the investment of capital is future consumption.

Man, Economy, and State with Power and Market, p. 478

Savings and investment are needed in order to permit any consumption at all …

Man, Economy, and State with Power and Market, p. 479

The market is no respector of past laurels, however large. Moreover, the size of a man’s investment is no guarantee whatever of a large profit or against grievous losses. Capital does not “beget” profit. Only wise entrepreneurial decisions do that.

Man, Economy, and State with Power and Market, p. 516

… the increase in investment goes into increasing the number of stages, pushing back the stages of production and employing longer production processes. It is this increasing “roundaboutness” that causes every increase in capital—even if unaccompanied by an advance in technological knowledge—to lead to higher physical productivity per original factor. The increase in gross investment, in particular, raises the prices of capital goods at the highest stages, encouraging new stages and inducing entrepreneurs to shift factors into this new and flowering field.

Man, Economy, and State with Power and Market, p. 527

The increased gross investment first increases the aggregate capital value of firms that earn net profits. As production and investment increase in the higher stages, and the effects of the new saving continue, the profits disappear and become imputed to increases in real wage rates and in real ground rents.

Man, Economy, and State with Power and Market, p. 530

The case of decreasing gross capital investment is defined as a retrogressing economy.

Man, Economy, and State with Power and Market, p. 532

… investment lengthens the structure of production.

Man, Economy, and State with Power and Market, p. 537

The longer the waiting period between first input and final output, the greater the disutility, ceteris paribus, since more time must elapse before the satisfaction is attained.

The first processes to be used will be those most productive (in value and physically) and the shortest … all short and ultraproductive processes will be the first ones to be invested in and established. Given any present structure of production, a new investment will not be in a shorter process because the shorter, more productive process would have been chosen first.

… there is only one way by which man can rise from the ultraprimitive level: through investment in capital. But this cannot be accomplished through short processes, since the short processes for producing the most valuable goods will be the ones first adopted. Any increase in capital goods can serve only to lengthen the structure, i.e., to enable the adoption of longer and longer productive processes. Men will invest in longer processes more productive than the ones previously adopted. They will be more productive in two ways: (1) by producing more of a previously produced good, and/or (2) by producing a new good that could not have been produced at all by the shorter processes.

Man, Economy, and State with Power and Market, pp. 537–38

… all new investment will be in longer processes …

Man, Economy, and State with Power and Market, p. 538n26

Any new investment will therefore be in a longer and more productive method of production.

Man, Economy, and State with Power and Market, p. 539

New capital investment always lengthens the overall structure of production.

Man, Economy, and State with Power and Market, p. 540

… an increase in saving and investment causes an increase in the real incomes of owners of labor and land factors.

Man, Economy, and State with Power and Market, p. 547

Capital investment is limited by saving.

Man, Economy, and State with Power and Market, p. 719

… no truly productive savings and investments can be made by government, its employees, or the recipients of its subsidies.

Man, Economy, and State with Power and Market, p. 917

… a characteristic of an investment expenditure is that the good in question is not being used to fulfill the needs of the investor, but of someone else—the consumer.

Man, Economy, and State with Power and Market, p. 941

… the standard of living of everyone rises continually and smoothly as investment increases.

Man, Economy, and State with Power and Market, p. 966

Investment tends to be centered in lengthier processes of production.

Man, Economy, and State with Power and Market, p. 995

On the free market, investment will always take place first in those projects that satisfy the most urgent wants of the consumers. Then the next most urgent wants are satisfied, etc. The interest rate regulates the temporal order of choice of projects in accordance with their urgency. A lower rate of interest on the market is a signal that more projects can be undertaken profitably.

Man, Economy, and State with Power and Market, p. 996

… while it is true that entrepreneurial spirit, correct laws, etc., are vital to economic development, they exercise their influence through capital investment and not instead of, or apart from, such investment. They are ultimate factors lying behind the degree of saving and productive capital investment that is made in a country.

Strictly Confidential, p. 304