Apr 24, 2009

Ludwig von Mises on the economic crisis?

Dr. Robert Garmong, guest writer

What if the greatest economist in history, Ludwig von Mises, could directly comment on the current financial crisis and tell you how to deal with it? Well, unfortunately that's not possible -- Mises died in 1973. However, his "Monetary Reconstruction" essay, the work we will be studying in a September study group, comes close.

In it, Mises analyzes the reasons why government manipulates the money supply, and he demonstrates the manner in which those manipulations must lead to economic boom/bust cycles. He shows how inflation stems from the statist desire for government control over the economy and in turn leads to further intervention. He offers both a frightening picture of "the trend toward all-round planning" and a plan for the return to sound money (a full gold standard).

The three-week Mises Study Group should interest anyone who wants to understand economics, business-cycle theory or the current financial crisis. No special knowledge of economics will be required, beyond the layman's knowledge of basic economic concepts. We should all come away with greater insight into the seemingly incomprehensible melt-down of the American financial system and indeed the world economy. Both on the level of political solutions and personal financial planning, we should be better equipped to cope with the situation.

Dr. Robert Garmong
Recorded Lectures: The Ayn Rand Bookstore
Weblog: Professor-in-Dalian

Guest writer Dr. Robert Garmong will lead the 3-week "Monetary Reconstruction" course which begins Sept. 14 on SGO. Dr. Garmong holds a B.A. degree in economics and political science from the University of Chicago, and a Ph.D. in philosophy from the University of Texas. He has studied both Austrian-School economics and mainstream contemporary economics. He is now a Professor in the School of International Business and Communication at Dongbei University of Finance and Economics, in Dalian, China.