The three treatises in On the Manipulation of Money and Credit were written in German between 1923 and 1931. Together they include some of Mises’s most important contributions to monetary and trade-cycle theories and constitute a precursor to Mises’s major work, Human Action.
In this anthology, Mises offers an articulate and accessible introduction to and critique of two topics he considers especially important: inflation and government interventionism. Mises believes inflation, that is monetary expansion, is destructive; it destroys savings and investment, which are the basis for production and prosperity. Government controls and economic planning never accomplish what their proponents intend. Mises consistently argues that the solution to government intervention is free markets and free enterprise, which call for reforming government. For that, ideas must be changed to “let the market system work.” There is no better “planning for freedom” than this.
More than thirty years ago F. A. Hayek said of Socialism: “It was a work on political economy in the tradition of the great moral philosophers, a Montesquieu or Adam Smith, containing both acute knowledge and profound wisdom. . . . To none of us young men who read the book when it appeared was the world ever the same again.” This is a newly annotated edition of the classic first published in German in 1922. It is the definitive refutation of nearly every type of socialism ever devised. Mises presents a wide-ranging analysis of society, comparing the results of socialist planning with those of free-market capitalism in all areas of life.
Theory and History is primarily a critique of Karl Marx, his materialism, and his prediction of the inevitability of socialism. Marx attributes the creation of tools and machines, as well as the economic structure of society, to undefined “material productive forces.” Mises rejects this materialistic view; he points out that tools and machines are actually created by individuals acting on the basis of non-materialistic ideas.
The Theory of Money and Credit integrated monetary theory into the main body of economic analysis for the first time, providing fresh, new insights into the nature of money and its role in the economy and bringing Mises into the front rank of European economists.
In this volume, Mises argued that economics is a science because human action is a natural order of life and that it is the actions of humans that determine markets and capital decisions. Since Mises believed these links could be proven scientifically, he concluded that economics, with its basis on that human action, is indeed a science in its own right and not an ideology or a metaphysical doctrine.